Choosing Which Law Controls
Trusts are not always created and administered in the same state. Someone might sign a trust in California, then retire to Arizona and manage it here. This statute addresses that reality by letting the trust document itself designate which state's law applies.
The meaning and effect of the terms of a trust are determined by the law of the jurisdiction designated in the terms of the trust instrument.
A.R.S. § 14-10107(A)This is why well-drafted trust documents typically include a governing law clause. By naming a specific state, the person creating the trust ensures that any future disputes or questions about the trust's terms will be resolved under the law they chose, not whatever state the trustee or beneficiaries happen to live in later.
What Happens When the Trust Is Silent
Not every trust document includes a governing law provision. When the trust does not specify, Arizona applies a practical two-part test.
In the absence of a controlling designation in the terms of the trust, the laws of the jurisdiction where the trust was executed determine the validity of the trust, and the laws of descent and the law of the principal place of administration determine the administration of the trust.
A.R.S. § 14-10107(B)Validity, meaning whether the trust was properly created, follows the law of the state where it was signed. Administration, meaning the day-to-day management and distribution decisions, follows the law where the trust is actually being run. For someone who created a trust in another state and later moved to Arizona, the trust's validity stays tied to the original state, but administration questions may be governed by Arizona law. This is one reason it can be worth reviewing your trust after relocating. A trust that was valid where you signed it will generally remain valid, but the rules around how the trustee operates may shift.
