Partnership Contracts and Trustee Protection
Some trusts hold interests in business partnerships. When that interest is a general partnership stake, the trustee steps into a role that would normally carry personal liability for partnership debts. Arizona law provides a layer of protection for trustees in this position.
Except to the extent that personal liability is imposed in the contract, a trustee who holds an interest as a general partner in a general or limited partnership is not personally liable on a contract entered into by the partnership after the trust's acquisition of the interest if the fiduciary capacity was disclosed in the contract or in a statement previously filed pursuant to the uniform partnership act or the uniform limited partnership act.
A.R.S. § 14-11011(A)The protection applies to contracts the partnership enters after the trust acquires the interest. The trustee must disclose the fiduciary capacity either in the contract itself or through a filing under Arizona's partnership statutes.
Torts and Property Obligations
For injuries or property-related obligations tied to the partnership, the rule mirrors the general trustee liability standard. A trustee holding a general partnership interest is not personally liable for torts committed by the partnership, or for obligations arising from ownership or control of the interest, unless the trustee is personally at fault.
This distinction matters for estate plans that include family businesses or investment partnerships. A successor trustee inheriting a general partnership interest should understand that the role carries administrative responsibility but not automatic personal exposure, as long as proper disclosures are maintained.
For families with business interests held in trust, this statute provides clarity on where partnership liability ends and personal protection begins.
