Contracts Signed in a Fiduciary Capacity
Trustees regularly sign contracts on behalf of the trust. They hire contractors, enter leases, open accounts, and manage vendors. Arizona law makes clear that when a trustee signs a contract in their fiduciary capacity and discloses that role, they are not personally responsible for the contract terms.
Except as otherwise provided in the contract, a trustee is not personally liable on a contract properly entered into in the trustee's fiduciary capacity in the course of administering the trust if the trustee in the contract disclosed the fiduciary capacity.
A.R.S. § 14-11010(A)The key detail is disclosure. If a trustee signs a lease simply as "Jane Smith" without indicating they are acting as trustee, they could be personally bound. Adding the trustee designation to contracts and agreements is a small but important step.
Torts and Environmental Liability
The rules shift when it comes to injuries and property-related obligations. A trustee is personally liable for torts committed during trust administration, or for obligations tied to owning or controlling trust property, only if the trustee is personally at fault.
This includes environmental liability. If trust property has contamination or environmental issues, the trustee is not automatically on the hook simply because they manage the asset. Personal fault is required.
Even when the trustee is not personally liable, claims can still be brought against them in their fiduciary capacity. This means the trust assets themselves may be used to satisfy the claim, even if the trustee's personal assets are protected.
For anyone serving as trustee, this statute underscores a practical point: always sign contracts as trustee, not personally. That single habit provides meaningful protection.
