The trustee or trustees so appointed shall submit reports annually, or at such other times as the Commandant may designate. The report shall show a statement of the conditions of the trust account at the time of the submission of the report, including all funds received on behalf of the incompetent; all expenditures made in behalf of the incompetent, accompanied by receipts or vouchers covering such expenditures; and a receipt indicating that the surety bond required by § 49.05-5 has been renewed. When the trustee is the spouse or adult dependent of the incompetent, receipts or vouchers need not be filed for expenditures made for living expenses. If the trustee or trustees fail to report promptly and properly at the end of any annual period or at such other times as the Commandant desires, the Commandant may, in his discretion, cause payment to such trustee or trustees to cease, and may, if deemed advisable, appoint another person or persons not under legal disability so to act, to receive future payments of moneys due the incompetent for the use and benefit of the incompetent.

Upon the appointment of a trustee or trustees to receive moneys due an incompetent, the authorized certifying officer having custody of that person's pay record shall be advised. After such notification, payments of moneys due the incompetent may be made by the appropriate officer in accordance with procedure prescribed by the Commandant. All such payments so made, however, shall be made to the designated trustee or trustees.

(a) Payments of amounts due incompetent personnel shall cease to be paid to the trustee or trustees upon receipt of notification by the authorized certifying officer of the occurrence of any of the following:

(1) Death of the incompetent;

(2) Death or disability of the trustee or trustees appointed;

(3) Receipt of notice that a committee, guardian, or other legal representative has been appointed for the incompetent by a court of competent jurisdiction;

(4) Failure of the trustee or trustees to render the reports required by § 49.10-1;

(5) That there is probable cause to believe that moneys received on behalf of the incompetent have been, or are being, improperly used;

(6) A finding by a board of medical officers that the heretofore incompetent is mentally capable of managing his own affairs;

(7) That the Commandant deems it to be in the best interest of the incompetent.

(b) In the event of termination of payments under paragraphs (a)(2), (4), (5), or (7) of this section, the Commandant may, if deemed appropriate, appoint a successor trustee or trustees. The successor trustee or trustees, so appointed, shall comply with the provisions of the regulations and instructions in this part issued thereunder, and do all acts in the manner required of the original trustee or trustees.

The trustee or trustees, when payments, hereunder are terminated, shall file a final account with the said Commandant. Thereupon, the trustee or trustees will be discharged and the surety released. In event of death or disability of the trustee, the final accounting will be filed by his legal representative.