Before and After Accepting the Role
A person named as custodial trustee does not have to accept the position. Before taking on trust property, the designated trustee can decline. They simply notify the person who made the designation.
When that happens, a successor trustee named under A.R.S. 14-9103 steps in. If no substitute exists, the person who created the arrangement can name a new one.
Once a custodial trustee accepts the role, resignation requires more steps. The trustee must deliver written notice to any successor trustee and to the beneficiary. The trustee must then transfer all 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 law sets a priority order. First, any designated successor takes over. If no successor was designated, a competent beneficiary may name one.
If the beneficiary does not act within ninety days, the beneficiary's conservator becomes the successor. If the conservator also fails to act, the resigning trustee may name a successor.
When all of those options run out, family members or any interested person can petition the court. The court can appoint a successor and can also remove a trustee for cause. The court may also require a bond to ensure the trustee meets their duties.
Families should consider naming at least one successor trustee when creating a custodial trust. That simple step can prevent delays and court involvement if the original trustee can no longer serve.