Technical Mistakes Do Not Undo the Transfer
Arizona protects the minor's interest by making UTMA transfers resilient against common errors. If the transferor did not immediately hand over control of the property, the transfer still counts. If the person named as custodian turns out to be ineligible, the transfer is still valid. If the custodian dies, becomes incapacitated, or declines to serve, the property still belongs to the minor.
The validity of a transfer made in a manner prescribed in this article is not affected by failure of the transferor to comply with section 14-7659, subsection C concerning possession and control, designation of an ineligible custodian, or death or incapacity of a person nominated or designated as custodian or the disclaimer of the office by that person.
A.R.S. § 14-7661(A)There is one exception. If the transferor names themselves as custodian for a type of property where self-designation is not allowed, that particular defect can affect the transfer. For all other situations, the law favors keeping the transfer intact.
Irrevocable and Vested in the Minor
This is the part that sometimes catches people off guard. Once you make a UTMA transfer, you cannot take it back. The property is "indefeasibly vested" in the minor, meaning the child has a legal right to it that cannot be undone.
A transfer made pursuant to section 14-7659 is irrevocable, and the custodial property is indefeasibly vested in the minor.
A.R.S. § 14-7661(B)The custodian manages the property and has broad authority under the UTMA, but neither the minor nor the minor's legal representative can override the custodian's powers except as specifically provided in the act. This structure gives the custodian flexibility to invest and use the property for the minor's benefit without interference, while ensuring the minor's ownership is secure.
