Who This Statute Applies To
This section covers a specific situation. Someone holds property for a minor or owes the minor money, but no conservator is in place. For example, an insurance company may owe a payout to a child, or a relative may hold funds for them.
This statute gives that person a clear path to move the property into proper custodial care.
A person who is not subject to section 14-7655 or 14-7656 and who holds property of or owes a liquidated debt to a minor who does not have a conservator may make an irrevocable transfer to a custodian for the benefit of the minor pursuant to section 14-7659.
A.R.S. § 14-7657(A)If a custodian was already named under Section 14-7653, the transfer must go to that person. The person making the transfer cannot pick someone else.
Limits Without a Named Custodian
When no custodian has been named, or the named person cannot serve, the statute limits who can receive the transfer.
If no custodian has been nominated pursuant to section 14-7653 or all persons so nominated as custodian die before the transfer or are unable, decline or are ineligible to serve, a transfer pursuant to this section may be made to an adult member of the minor's family or to a trust company unless the property exceeds ten thousand dollars in value.
A.R.S. § 14-7657(C)The ten-thousand-dollar cap matches the rule in Section 14-7656. For amounts above that limit, a different process is needed. This keeps larger sums from going into custodial accounts without proper oversight.
Tax Points to Know
Families should know the tax impact of these transfers. Gifts within the annual gift tax limit usually do not require a tax filing. Gifts above that amount may require a gift tax return.
A trust may offer more control over larger transfers. It can also provide potential tax benefits. An estate planning attorney can help pick the best approach.