Three Paths to an Incapacity Finding
A custodial trustee does not need a court order to find that a beneficiary has become incapacitated. Arizona law provides three methods the trustee can rely on.
This is an important part of estate planning. It helps families prepare for a loved one's potential loss of ability to manage their own affairs.
A custodial trustee may determine that the beneficiary is incapacitated by relying on: 1. Previous direction or authority given by the beneficiary while not incapacitated, including direction or authority pursuant to a durable power of attorney. 2. The certificate of the beneficiary's physician. 3. Other persuasive evidence.
A.R.S. § 14-9110(B)The most common path is a doctor's certificate. A doctor who has examined the beneficiary provides a written statement about their condition.
The trustee can also look to instructions the beneficiary gave while able. This includes directions in a durable power of attorney about how incapacity should be handled.
Incapacity Does Not End the Trust
One of the most important protections in this statute is what happens next. The custodial trust continues. The trustee's powers remain intact. Any named successor trustee remains in place.
Third parties who acted on the trustee's instructions are also protected.
If the beneficiary later recovers, the trustee can return to managing the trust as if the beneficiary were able. A family member or other interested person can also petition the court to review the finding.
This acts as a safeguard against mistakes or disagreements about the beneficiary's condition.
When a trustee has reason to believe a beneficiary is incapacitated but has not yet made a formal finding, the statute says to manage the trust under the incapacity rules. This prevents delays in care while the finding is being finalized.