Before and After Accepting the Role
A person named as custodial trustee does not have to accept the position. Before taking on any trust property, a designated trustee can decline simply by notifying the person who made the designation. When that happens, the substitute trustee named under A.R.S. 14-9103 steps in. If no substitute was named, the person who created the arrangement can designate a new one.
Once a custodial trustee has accepted the role, resignation requires more formality. The trustee must deliver written notice to any successor trustee and to the beneficiary, then transfer the trust property and records to the successor.
A custodial trustee who has accepted the custodial trust property may resign by delivering written notice to a successor custodial trustee, if any, the beneficiary and, if the beneficiary is incapacitated, to the beneficiary's conservator, if any.
A.R.S. § 14-9113(B)(1)The Succession Order When No One Steps Forward
If a custodial trustee becomes ineligible, resigns, dies, or becomes incapacitated, the statute establishes a priority order for finding a replacement. First, any designated successor takes over. If no successor was designated, a competent beneficiary may name one. If the beneficiary is incapacitated or does not act within ninety days, the beneficiary's conservator becomes the successor. If even the conservator fails to act, the resigning trustee may designate a successor.
When all of those options are exhausted, the statute allows the transferor, family members, a guardian, or any person interested in the trust property or the beneficiary's welfare to petition the court for a successor appointment. The court can also be asked to remove a custodial trustee for cause and to require a bond or other security for faithful performance of fiduciary duties.
