What Counts as a Breach of Trust
The definition is straightforward. Any violation of a duty that a trustee owes to a beneficiary qualifies as a breach of trust. This includes mismanaging investments, failing to distribute funds properly, self-dealing, not providing required accountings, or acting outside the authority granted by the trust document.
A violation by a trustee of a duty the trustee owes to a beneficiary is a breach of trust.
A.R.S. § 14-11001(A)Once a breach has occurred, or when one appears likely, beneficiaries can ask the court to step in. The court is not limited to a single remedy. It can choose from a broad list of options based on the severity and nature of the breach.
The Court's Toolbox
Arizona courts can respond to a breach of trust in multiple ways. The statute lists ten specific remedies, ranging from relatively mild measures like ordering an accounting to severe actions like removing the trustee entirely.
To remedy a breach of trust that has occurred or may occur, the court may: 1. Compel the trustee to perform the trustee's duties. 2. Enjoin the trustee from committing a breach of trust. 3. Compel the trustee to redress a breach of trust by paying money, restoring property or other means.
A.R.S. § 14-11001(B)(1)-(3)Additional remedies include appointing a special fiduciary, suspending or removing the trustee, reducing or denying the trustee's compensation, voiding unauthorized acts, imposing liens or constructive trusts on property, and tracing wrongfully disposed trust property to recover it or its proceeds. The court can also order any other relief it considers appropriate.
For beneficiaries concerned about how a trust is being managed, this statute provides meaningful recourse. It ensures that trustees are accountable and that the court has the flexibility to match the remedy to the situation.
