Three Ways Knowledge Is Established
Trust law often hinges on whether someone knew a particular fact. Did the trustee know about a creditor's claim? Did the bank know the account holder had passed away? This statute spells out exactly what qualifies as knowledge under Arizona's trust code.
A person has knowledge of a fact if any of the following apply: 1. The person has actual knowledge of it. 2. The person has received a notice or notification of it. 3. From all the facts and circumstances known to the person at the time in question, the person has reason to know it.
A.R.S. § 14-10104(A)The third category is the broadest. You do not need to have been told directly. If the circumstances were clear enough that a reasonable person would have figured it out, Arizona law treats you as if you knew.
How This Applies to Banks and Other Organizations
When a trust is held at a bank, brokerage, or other organization, the rules work differently. The organization only "knows" something once the employee responsible for the trust account receives the information, or would have received it if the organization followed reasonable internal procedures.
An organization that conducts activities through employees has notice or knowledge of a fact involving a trust only from the time the information was received by an employee having responsibility to act for the trust or would have been brought to the employee's attention if the organization had exercised reasonable diligence.
A.R.S. § 14-10104(B)This matters in practice. If you notify a bank's general customer service line about a trust matter, the clock on their "knowledge" may not start until the information reaches the right department. Organizations are expected to maintain reasonable communication routines, but they are not required to have every employee monitoring every trust account.
