Arizona Trust Creation

Section 14-10401 of Arizona's Trust Code sets forth the methods by which an Arizona trust is created:

A trust may be created by:

1. Transfer of property to another person as trustee during the settlor's lifetime or by will or other disposition taking effect on the settlor's death.

2. Declaration by the owner of property that the owner holds identifiable property as trustee.

3. Exercise of a power of appointment in favor of a trustee.

Note that these methods of creation are very broad.

Arizona's Trust Code, specifically A.R.S. § 14-10402, sets forth the following requirements as to the creation of trusts pursuant to the code:

A. Except as provided in section 14-5409, a trust is created only if all of the following are true:

1. The settlor has capacity to create a trust.

2. The settlor indicates an intention to create the trust.

3. The trust has a definite beneficiary or is:

(a) A charitable trust.

(b) A trust for the care of an animal, as provided in section 14-10408.

(c) A trust for a noncharitable purpose, as provided in section 14-10409.

4. The trustee has duties to perform.

5. The same person is not the sole trustee and sole beneficiary.

B. A beneficiary is definite if the beneficiary can be ascertained now or in the future, subject to any applicable rule against perpetuities.

C. A power in a trustee or other person to select a beneficiary from an indefinite class is valid. If the power is not exercised within a reasonable time, the power fails and the property subject to the power passes to the persons who would have taken the property had the power not been conferred.

Note that trusts, however, are void pursuant to A.R.S. § 10406 if the creation was, at least to some extent, "induced by fraud, duress or undue influence."

This brief overview of some important considerations associated with Arizona trust creation is by no means comprehensive. Always seek the advice of a competent professional when making important legal decisions.

Arizona LLC AttorneyDouglas K Cook is an Arizona trust lawyer with over 40 years of experience as a practicing attorney. Although Douglas K Cook's office is located in Mesa, Arizona, he represents clients throughout the Phoenix, Arizona Metropolitan area including the following east valley cities: Scottsdale, Paradise Valley, Tempe, Chandler, & Gilbert.

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