When Statements Are Required
Transparency is a core duty of any trustee. Custodial trustees are no exception. The trustee must give written statements about the trust property at several key points.
On the acceptance of custodial trust property, the custodial trustee shall provide a written statement describing the custodial trust property and shall thereafter provide a written statement of the administration of the custodial trust property: 1. Once each year. 2. On request at reasonable times by the beneficiary or the beneficiary's legal representative. 3. On resignation or removal of the custodial trustee. 4. On termination of the custodial trust.
A.R.S. § 14-9115(A)The first statement describes what property the trust holds. After that, the trustee must give annual updates. The trustee must also respond to reasonable requests from the beneficiary.
When the trust ends or the trustee steps down, a final accounting is required. If the beneficiary's interest ends, the statement goes to the next person in line to receive the trust property.
Court-Ordered Accountability
If a trustee does not provide enough information, the beneficiary, family members, or any interested person can ask the court for a formal accounting. A successor trustee can also request an accounting from a predecessor.
When a court removes a trustee, an accounting is required. The court orders the trust property and records transferred to the successor.
The court can also review whether the trustee's actions were proper. This means the court can check whether the pay the trustee claimed was reasonable.
This oversight protects beneficiaries who may not be able to monitor the trust on their own. If the trust document does not set specific reporting rules, this statute fills the gap with minimum standards.
These accounting rules apply no matter the size of the trust. Good record-keeping from the start makes annual reporting easier and helps avoid disputes.