Three Distinct Duties in One Statute
This statute bundles three related obligations that every trustee must follow. Each one serves a different purpose, but together they protect the trust and its beneficiaries from confusion, commingling, and loss. These rules apply across all types of trusts.
A trustee shall keep adequate records of the administration of the trust. A trustee shall keep trust property separate from the trustee's own property. A trustee shall cause the trust property to be designated so that the interest of the trust, to the extent feasible, appears in records maintained by a party other than a trustee or beneficiary.
A.R.S. § 14-10810(A)(B)(C)First, the trustee must keep records. Trust documents, financial statements, receipts, tax filings, and correspondence should all be organized and accessible. If a beneficiary asks what happened with the money, the trustee needs to be able to show them.
Separation and Identification of Assets
Second, trust property must stay separate from the trustee's personal property. Mixing personal and trust funds, even temporarily, can expose the trustee to liability and undermine the trust's legal protections. This is one of the most common mistakes when a family member manages assets for the trust.
Third, trust assets should be titled or registered in a way that shows they belong to the trust. Recording is required wherever feasible. Bank accounts, brokerage accounts, and real estate should all reflect trust ownership as part of the public record or the institution's own records.
There is one exception: a trustee may pool the assets of two or more separate trusts for investment purposes, as long as the records clearly show each trust's share. This is common with institutional trustees managing multiple trusts.