[§554B-10]  Determination of incapacity,
proceeding and effect.  (a)  A beneficiary is incapacitated for the
purposes of this chapter and the custodial trustee shall administer and
distribute the custodial trust as one for an incapacitated beneficiary:



(1)  If the custodial trust is created under section
554B-5;



(2)  If the transferor has so directed in the writing
creating the custodial trust; or



(3)  If the custodial trustee has determined that the
beneficiary has become incapacitated.



(b)  A custodial trustee may determine that the
beneficiary has become incapacitated in reliance upon:



(1)  Prior direction or authority given by the
beneficiary while not incapacitated, including direction or authority pursuant
to a durable power of attorney;



(2)  The certificate of the beneficiary's physician;
or



(3)  Other reasonable evidence.



(c)  If a custodial trustee for an
incapacitated beneficiary reasonably concludes that the beneficiary's
incapacity has ceased, or that circumstances concerning the beneficiary's
ability to manage assets have changed since the creation of a custodial trust
directing administration as for an incapacitated beneficiary, the custodial
trustee may administer and distribute the custodial trust as one for a
beneficiary who is not incapacitated.



(d)  On petition of the beneficiary, the
custodial trustee, or other person interested in the welfare of the beneficiary
or custodial trust property, the court shall determine and declare whether or
not the beneficiary is incapacitated.



(e)  Absent determination of incapacity of the
beneficiary under subsection (b) or (d), a custodial trustee who has reason to
believe that the beneficiary has become incapacitated shall hold and administer
the custodial property in accordance with the provisions of this chapter
applicable to incapacitated beneficiaries.



(f)  Incapacity of a beneficiary does not
terminate the custodial trust, any designation of a successor custodial
trustee, any powers or authority of the custodial trustee, or any immunities of
third persons acting on direction of the custodial trustee. [L 1989, c 76, pt
of §1]