A Rule That Reaches Back
When Arizona adopted its prudent investor rule, the legislature did not limit it to new trusts only. This statute makes clear that the rule applies to trusts already in existence as of July 20, 1996, as well as any trust created afterward.
This article applies to trusts existing on and created after July 20, 1996.
A.R.S. § 14-10909(A)That means a trust created in the 1980s is still subject to modern prudent investor standards when the trustee makes investment decisions today. The trustee cannot rely on outdated investment rules simply because the trust was drafted before the current framework existed.
A Fair Line for Past Decisions
While the rule applies broadly, the statute draws a reasonable boundary. For trusts that existed before July 20, 1996, the prudent investor standard governs only decisions or actions that occurred after that date.
As applied to trusts existing on July 20, 1996, this article governs only decisions or actions occurring after that date.
A.R.S. § 14-10909(B)This prevents retroactive liability. A trustee who made investment choices under the old rules before 1996 is not judged by a standard that did not yet exist. Going forward, however, every trustee is expected to follow the prudent investor framework regardless of when the trust was originally created.
