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Arizona’s laws place trustees in a unique position. They have legal responsibilities and obligations that can be challenging to understand and fulfill. While they often have tremendous authority to act on behalf of a trust and the beneficiaries of the trust, complex fiduciary duties and obligations always provide checks and balances to that broad authority.

The potential for exposure to personal liability should make any trustee think twice about overstepping the bounds of her authority or not acting only on behalf of the trust or its beneficiaries. For all these reasons, people often elect to name an experienced professional to serve in the role of trustee when they are creating a trust. Additionally, trustees in all situations, including those experienced in the role, often work closely with a trust administration attorney to ensure that the trustee completes tasks in accordance with the requirements of Arizona law, federal requirements, and the terms of the trust document.

At PayneLess Law, we guide trustees in their duties with respect to all types of trusts. Whether you have been named a trustee and are seeking assistance or you are trying to determine who should serve as trustee, we tailor our assistance to your needs. We work to keep the process of trust administration as straightforward and efficient as possible.

How a Trustee Fits in with a Trust

Trusts split the attributes of property ownership up into three roles: trustor, trustee, and beneficiary. The person who creates the trust and transfers property into it is often referred to as the trustor or settlor. By putting property into a trust, the trustor hands over control of the property to the person serving as trustee. The trustee operates like a caretaker. Trustees have the duty to manage and protect the property. But they do not use the property for themselves. Instead, they administer the property for the trustor or one or more beneficiaries who ultimately get the benefits of the trust property.

So the trustee bears the responsibility to maintain the value of trust property and to follow the trustor’s instructions in the trust document and any legally imposed requirements. A trustee can accept a certain amount of compensation for fulfilling these duties in a reasonable amount or as determined by the trust, but they cannot use trust property for their own benefit. A trustee must make management decisions that are in trust’s best interest only.  

Fiduciary Duties of a Trustee in Arizona

A trustee is considered a fiduciary. A fiduciary is a special relationship with specific obligations:

  • Control and protect trust property
  • Keep trust property separate from the trustee’s own personal property
  • Maintain adequate records of the property and actions taken when administering the property
  • Administer the trust in good faith in accordance with the terms of the trust agreement
  • Act impartially with regard to investment, management, and distribution of property
  • Use reasonable care, skill, and caution in the administration of the trust
  • Comply with the Trustee requirements specified under Arizona law
  • Incur only costs that are reasonable in relation to the trust property and the purposes of the trust
  • Take reasonable steps to enforce claims held by the trust or defend claims made against the trust
  • Keep beneficiaries informed regarding trust administration

In addition, if a trustee has special expertise or skills, such as investment knowledge, the trustee is obligated to use their expertise in the process of trust administration.

Managing the Tasks of Trust Administration

Besides the general fiduciary obligations a trustee must comply with, trustees also often have other duties. They manage property for the use of the beneficiary, and often they will need to provide some assets from the trust to beneficiaries to fulfill the purposes of the trust. For instance, if a trust has been set up to pay for a beneficiary’s educational needs, the trustee might need to pay for tuition and fees.

Trustees often need to evaluate requests for disbursements to determine whether the requests comply with trust terms and regulatory requirements. With a special needs trust, for example, the trustee is frequently required to limit disbursements to particular types of expenses, keep receipts documenting the expenses, and submit reports regularly demonstrating compliance with regulatory requirements.

These tasks can be time consuming and confusing for those who are not used to managing trusts on a regular basis. PayneLess Law can provide guidance and assistance to ensure that all duties are fulfilled properly and efficiently.

Talk to PayneLess Law About Help with Trustee Obligations

Trusts are powerful and valuable tools, and managing trusts can be a challenge. Let PayneLess Law take the painful burden off your shoulders so you can feel confident knowing the trust administration tasks will be handled in accordance with all legal obligations while conserving trust resources. When you need assistance fulfilling your duties as a trustee, we are ready to assist. Schedule a consultation today to learn more about the ways we can help.  

PayneLess Law Helps You Plan for Tomorrow with Confidence

Taking the step to establish a living will and other advanced directives is a profound expression of care for yourself and your loved ones. At PayneLess Law, we’re here to provide the guidance and support you need to navigate these important decisions with confidence and ease. Once completed, we can assist you with submitting your documents to the appropriate registry so that your healthcare decisions will be readily available to any healthcare provider in an emergency.

Contact PayneLess Law at 480-420-7199 or schedule a free consultation to learn how to plan for your healthcare decisions today. Our team is dedicated to ensuring your wishes are clearly articulated and respected, offering you peace of mind for the future.

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