How a Governing Instrument Selects Its Own Rules
Estate planning documents often involve people and property in more than one state. A person might live in Arizona, own a vacation property in another state, and have a trust drafted under a third state's laws. This statute provides a clear framework: the law of the state selected in the governing instrument controls how that document is interpreted.
The meaning and legal effect of a governing instrument is determined by the local law of the state selected in the governing instrument unless the application of that law is contrary to the requirements of article 4 of this chapter relating to exempt property and allowances or is contrary to any other public policy of this state otherwise applicable to the disposition.
A.R.S. § 14-2703This means that if a trust document states it is governed by Nevada law, Arizona courts will generally interpret that trust according to Nevada rules, even if the trustor now lives in Arizona. The choice of law provision gives individuals flexibility to select the legal framework that best fits their planning goals.
Where Arizona Draws the Line
The freedom to choose another state's law is not unlimited. Arizona will not enforce a choice-of-law provision if it conflicts with Arizona's rules on exempt property and family allowances, which protect surviving spouses and minor children. If the chosen state's law would strip away those protections for an Arizona resident's family, Arizona law prevails.
The same override applies to any other Arizona public policy that directly governs the disposition. This safety valve ensures that choice-of-law provisions cannot be used to circumvent fundamental protections Arizona provides to its residents.
For anyone with estate planning documents drafted in another state, or considering which state's law should govern their trust, this statute confirms that Arizona respects those choices within reasonable limits. Reviewing choice-of-law clauses with a partner attorney is a practical step for anyone who has relocated to Arizona or holds property across multiple states.
