Termination of a custodial trust
Sec. 37. (a) Upon termination of a custodial trust, the custodial
trustee shall transfer the unexpended custodial trust property:
(1) to the beneficiary, if not incapacitated or deceased;
(2) to the guardian or other recipient designated by the court for
an incapacitated beneficiary; or
(3) upon the beneficiary's death, in the following order:
(A) as last directed in a writing:
(i) signed by the deceased beneficiary while not
incapacitated; and
(ii) received by the custodial trustee during the life of the
deceased beneficiary;
(B) to the survivor of multiple beneficiaries if survivorship
is provided for under section 26 of this chapter;
(C) as designated in the instrument creating the custodial
trust; or
(D) to the estate of the deceased beneficiary.
(b) If, when the custodial trust would otherwise terminate, the
distributee is incapacitated, the custodial trust continues for the use
and benefit of the distributee as beneficiary until the incapacity is
removed or the custodial trust is otherwise terminated.
(c) Death of a beneficiary does not terminate the power of the
custodial trustee to discharge obligations of the custodial trustee or
beneficiary incurred before the termination of the custodial trust.
As added by P.L.3-2003, SEC.1.
Last modified: May 27, 2006