When Statements Are Required
Transparency is a core obligation of any trustee, and custodial trustees are no exception. This statute requires the custodial trustee to provide written statements describing the trust property and its administration 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 initial statement describes what property the trust holds. After that, the trustee must provide annual updates, respond to reasonable requests from the beneficiary, and deliver a final accounting when the trust ends or the trustee steps down. When the beneficiary's interest terminates, the current statement goes to whoever is next in line to receive the trust property.
Court-Ordered Accountability
If a custodial trustee is not providing adequate information, the beneficiary, their legal representative, family members, or anyone with an interest in the trust property can petition the court for a formal accounting. A successor trustee can also request an accounting from a predecessor. When a trustee is removed by the court, an accounting is mandatory, and the court will order the trust property and records transferred to the successor.
The court also has authority to review whether a custodial trustee's actions were proper and whether the compensation the trustee claimed was reasonable. This judicial oversight provides an important safeguard for beneficiaries who may not be in a position to monitor the trust themselves.
