Choosing Which Law Controls
Trusts are not always created and administered in the same state. Someone might sign a trust in California, then retire and manage it here. This statute addresses that reality. It lets the trust document itself pick which state's law applies, giving families peace of mind about how their assets during your lifetime and beyond will be handled.
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 future disputes are resolved under the law they chose. It does not matter what state the trustee or beneficiaries live in later. This applies to all types of trusts, including revocable trusts and irrevocable trusts.
What Happens When the Trust Is Silent
Not every trust document includes a governing law provision. When the trust does not specify, a practical two-part test applies.
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 follows the law of the state where the trust was signed. Administration follows the law where the trust is actually being run. For someone who created a trust in another state and later moved here, the trust's validity stays tied to the original state. However, the rules around how the trustee operates may shift under Arizona trust laws.
How This Affects Real Estate and Asset Management
Governing law is especially important when the trust holds real estate in more than one state. Each state has its own rules about property transfers and public record requirements. A trust that works well for property in one state may need adjustments for property in another.
Families who relocate should review their trust with attention to asset management. The governing law clause can affect how distributions are taxed, how investments are managed, and what rights beneficiaries have. A simple review after a move can save time and confusion later.
If your trust was created out of state and you now live here, it is worth checking whether the original terms still serve your goals. Different types of trusts carry different rules about trustee powers and beneficiary protections. A quick review can confirm everything is still aligned.