How the Trustee Controls the Claims Timeline
After a settlor's death, the trustee of a nontestamentary trust has a powerful option: notify creditors and start a clock. The trustee can either send direct written notice to known creditors or publish notice in a local newspaper, following the same procedures that apply to personal representatives in probate proceedings.
After the death of the settlor the trustee of a nontestamentary trust may notify known creditors pursuant to section 14-3801, subsection B and may publish notice to creditors pursuant to section 14-3801, subsection A.
A.R.S. § 14-6103(A)This matters because it gives the trustee a way to resolve outstanding debts efficiently. Without proactive notification, creditors could surface months or even years later, creating uncertainty for beneficiaries waiting to receive their distributions.
The Consequences of Missing the Deadline
Any claim against the trust estate that arose before the settlor's death is barred if not presented within the time period specified in the notice. This applies to all types of claims, including those from the state and its political subdivisions, whether the debt is currently due or contingent, fixed or disputed.
A claim against the trust estate that arose before the settlor's death, including claims of the state or any of its political subdivisions, whether due or to become due, absolute or contingent, liquidated or unliquidated, founded on contract, tort or other legal basis, if not barred against the trust estate by any other statute of limitations or nonclaim statute, are barred against the trust estate, the trustee and the beneficiaries of the trust, unless presented within the time prescribed.
A.R.S. § 14-6103(B)The trustee is also protected from personal liability for choosing to give or not give notice. If a claim is properly presented, the trustee must forward it to beneficiaries who may be liable because they received trust assets. From there, the rules governing nonprobate transferee liability under A.R.S. 14-6102 apply.
