A trust is a legal duty that results when a person transfers legal ownership of property to another person or institution (the trustee) for a designated purpose. The trustee is responsible for managing and distributing the assets of the trust for the benefit of a third party (the beneficiary). Trusts are established for a variety of reasons, such as for tax savings or for charitable purposes. In many cases, a person sets up a trust for a beneficiary who requires special care due to age or other circumstances.

A trustee has a fiduciary duty to the designated beneficiary in administering the trust, which means that the trustee is held to a very high standard of care. Taking on the responsibilities of a trustee might be intimidating, especially for those who have no experience in trust administration. For that reason, trustees typically retain professionals to guide them through the process.

In Arizona, a trustee’s duties are detailed in Arizona state statutes. These duties include:

  • Posting a fiduciary bond, if required by a court
  • Managing investments of trust assets
  • Identifying and collecting property belonging to the trust
  • Establishing and protecting the value of trust property
  • Managing businesses owned by the trust
  • Enforcing the trust’s legal claims and defending it against claims
  • Preparing financial reports for inspection by beneficiaries
  • Making all required distributions and paying legitimate debts

The performance of these duties can also require the trustee to consult with accountants and financial planners, to review the performance of stocks, commodities and funds in which the trust has invested and to make discretionary decisions in the best interests of the trust and its beneficiaries.

The administration of a trust can be challenging, particularly if the trustee resides outside of Arizona. It is usually impractical for out-of-state trustees to repeatedly travel to Arizona to manage the trust’s affairs. However, the law permits trustees to delegate certain matters to professionals in the performance of the trustee’s duties, provided that the scope and terms of the delegation are spelled out.

Our firm’s estate planning and trust practice is experienced in assisting non-resident trustees in all aspects of Arizona trust administration, serving as legal counsel and/or as a delegee of specified trust management duties. We often hold virtual meetings and conferences through video chats and online document sharing and we have flexible hours to accommodate clients who live in different time zones.

Located in Mesa, the Law Firm of Joseph M. Udall, PLC provides skilled counsel for a wide variety of Arizona probate and estate administration matters. Please feel free to contact us online or call (480) 500-1866 for an initial phone consultation.