Planning Ahead for Property That Has Not Yet Transferred
Not all property transfers happen immediately. Life insurance payouts, retirement accounts, and contractual rights often transfer only when a triggering event occurs. This statute allows you to designate a custodial trustee in advance so that when the event happens, the property flows directly into a custodial trust without additional court proceedings.
A person having the right to designate the recipient of property payable or transferable on a future event may create a custodial trust on the occurrence of the future event by designating in writing the recipient, followed in substance by: "as custodial trustee for (name of beneficiary) under the Uniform Custodial Trust Act pursuant to title 14, chapter 9, Arizona Revised Statutes".
A.R.S. § 14-9103(A)The designation can include substitute or successor custodial trustees. If the first named trustee is unable or unwilling to serve, the property passes to the next person in line, keeping the custodial trust intact.
Where This Designation Can Appear
The statute gives broad flexibility for where the custodial trustee designation can be placed. It can appear in a will, a trust document, a deed, a multiple-party account, an insurance policy, an instrument exercising a power of appointment, or any writing that designates a beneficiary of contractual rights.
A designation under this section may be made in a will, a trust, a deed, a multiple-party account, an insurance policy, an instrument exercising a power of appointment or a writing designating a beneficiary of contractual rights.
A.R.S. § 14-9103(C)For the designation to be effective outside of these instruments, it must be registered with or delivered to the fiduciary, payor, issuer, or obligor responsible for the future right. This ensures the person or institution handling the transfer knows where to direct the property when the triggering event occurs.
