How Property Reaches a Custodial Trustee
Life does not always wait for formal court proceedings. Sometimes a person becomes incapacitated before a conservator has been appointed. Bills still need to be paid. Assets still need to be managed. This statute provides a practical path forward.
A person, including a fiduciary other than a custodial trustee, who holds property of or owes a debt to an incapacitated individual not having a conservator may make a transfer to an adult member of the beneficiary's family or to a trust company as custodial trustee for the use and benefit of the incapacitated individual.
A.R.S. § 14-9105(A)The transfer is straightforward for smaller amounts. Anyone holding property or owing a debt to the incapacitated person can place it in a custodial trust. The custodial trustee must be either an adult family member or a trust company. This keeps things manageable without requiring a full conservatorship proceeding.
The $20,000 Threshold
Arizona draws a clear line at $20,000. If the value of the property or debt exceeds that amount, a court must authorize the transfer. This safeguard prevents large sums from being moved without judicial oversight while still allowing smaller, routine transfers to happen quickly.
Once property is transferred, the custodial trustee provides a written acknowledgment of delivery. That signed receipt serves as a sufficient discharge for the person making the transfer. It protects both sides: the transferor has proof they delivered the funds responsibly, and the custodial trustee has formal custody of the assets.
