The Terms That Shape Trust Law
In trust law, a single defined term can decide who gets notice or who may challenge a trustee. This statute sets the vocabulary for the entire Trust Code.
These terms apply to revocable trusts, irrevocable trusts, and every trust document the code governs.
"Settlor" means a person, including a testator, who creates or contributes property to a trust. If more than one person creates or contributes property to a trust, each person is a settlor of the portion of the trust property attributable to that person's contribution except to the extent another person has the power to revoke or withdraw that portion.
A.R.S. § 14-10103(16)The "settlor" definition is key. It tells us who created the trust. When more than one person adds property, each person controls their own portion.
This matters for taxes and for deciding who can revoke or amend the trust. A personal representative managing an estate with a trust must know this term.
Qualified Beneficiary: A Critical Distinction
Not every person who may one day benefit from a trust counts as a "qualified beneficiary." The statute names three groups that qualify.
"Qualified beneficiary" means a beneficiary who, on the date the beneficiary's qualification is determined: (a) Is a distributee or permissible distributee of trust income or principal. (b) Would be a distributee or permissible distributee of trust income or principal if the interests of the distributees described in subdivision (a) of this paragraph terminated on that date. (c) Would be a distributee or permissible distributee of trust income or principal if the trust terminated on that date.
A.R.S. § 14-10103(14)Qualified beneficiaries hold specific rights under the Trust Code. For example, they can demand notices and accountings from the trustee.
A trustee who fails to share required information risks a breach of duty claim. Knowing who qualifies is the first step.
The trust document names the beneficiaries. This statute then decides which of them hold legal rights to information from the trustee.