Trusts are complex estate planning documents subject to various legal requirements and standards established in the Uniform Trust Code. The experienced trusts attorneys at the Dayes Law Firm use their knowledge of the Uniform Trust Code to help clients create and administer trusts with a keen focus on the rules that govern their existence. We discuss how the Uniform Trust Code applies to various types of trusts in Phoenix and how our estate planning attorneys can help you navigate the complexities of these legal requirements.
What Is the Uniform Trust Code?
The Uniform Trust Code is a standard model of laws for the governance of trusts that is also known as the Arizona Trust Code in Phoenix under A.R.S. 14-10101 to 14-11102. The Uniform Trust Code creates rules for the following types of issues related to trusts:
- Creating a valid and enforceable trust
- Modifying or amending a trust
- Terminating a trust
- Establishing distribution terms for beneficiaries
- Outlining the duties and power of trustees
- Investing and managing trust assets
- Resolving disputes over a trust in court
The rules for trusts under the Uniform Trust Code can be complex and difficult to understand. However, you must follow these rules to properly maintain a trust and to enjoy its benefits. Most people prefer the use of trusts in their estate planning to help individuals, families, or other beneficiaries with a variety of goals. For example, a trust can provide asset protection from creditors and prioritize the privacy of family wealth by avoiding burdensome court processes like probate.
Creating and Administering a Phoenix Trust That Complies with the Uniform Trust Code
The requirements for creating a valid trust can be found in A.R.S. 14-10402. These conditions begin with the person who is creating the trust, also known as the settlor, having the capacity and intent to create a trust. Other basic requirements for a trust include having a definite beneficiary and a trustee. A trust cannot have a sole trustee who is the same person as the sole beneficiary. We can establish these requirements in writing through a trust agreement that appoints a trustee and identifies the intended beneficiary.
The most common method for creating a trust after meeting these requirements is to transfer property to the person serving as trustee in their official capacity under A.R.S. 14-10401. This step requires correctly retitling assets into the trust with specific steps based on the types of property transferred. For example, you may have to revise the beneficiary designation forms on various bank and investment accounts. Other assets, such as real property or business interests, will require additional paperwork to evidence the transfer into the trust.
Responsibilities of the Trustee
After creating a trust, the Uniform Trust Code further outlines the responsibilities of the trustee in administering the terms of the trust. These responsibilities are typically divided into two parts.
The first is proper investment and management of assets to preserve and grow value for the beneficiaries. A trustee’s role can be broad and include items such as paying taxes, defending or enforcing legal claims, diversifying trust assets, and reporting the status of trust assets to the beneficiaries. The second part of a trustee’s duties is to distribute assets to beneficiaries under the terms of the trust. The distribution standards for a trustee can be discretionary or mandatory, depending on the circumstances.
Contact a Phoenix Attorney to Ensure You Comply with the Uniform Trust Code
The Uniform Trust Code is an important set of rules to understand for anyone in Phoenix, or elsewhere in the state, who creates a trust, serves as a trustee, or is a named beneficiary. Our experienced estate planning lawyers provide clients with skilled and goal-oriented counsel as it relates to creating or administering a trust. Schedule a free initial consultation with our office today.
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