Reimbursement and Compensation for Custodians
Serving as a custodian under Arizona's Uniform Transfers to Minors Act is a responsibility that can involve real costs. This statute ensures custodians are not left paying out of pocket. Reasonable expenses incurred while managing custodial property are reimbursable directly from the property itself.
A custodian is entitled to reimbursement from custodial property for reasonable expenses incurred in the performance of the custodian's duties.
A.R.S. § 14-7665(A)Compensation works a little differently. A custodian may elect to charge a reasonable fee for services performed during any calendar year, but this election is noncumulative. That means a custodian who skips a year cannot go back and collect fees retroactively. There is also one clear restriction: a person who transferred property to themselves as custodian under section 14-7654 cannot charge compensation. This prevents someone from gifting assets to a minor, appointing themselves custodian, and then billing the account.
When a Bond May Be Required
Unlike many fiduciary roles, a custodian under this statute does not need to post a bond as a default requirement. The only exception arises if a court specifically orders a bond during a removal proceeding under section 14-7668. This keeps the process simple and accessible for family members who step into the custodian role without involving attorneys or courts.
Except for a person who is a transferor pursuant to section 14-7654, a custodian has a noncumulative election during each calendar year to charge reasonable compensation for services performed during that year.
A.R.S. § 14-7665(B)For families setting up custodial accounts, understanding these rules helps set expectations. The custodian is a caretaker, not a volunteer, but the law draws clear lines around what constitutes fair compensation.
