Who Counts as a Fiduciary
The word "fiduciary" covers far more ground than most people expect. Arizona's definition reaches beyond trustees and executors. It includes guardians, conservators, receivers, bankruptcy trustees, assignees for the benefit of creditors, partners, corporate officers, agents, and anyone else acting in a fiduciary capacity for another person, trust, or estate. If someone holds property or authority on behalf of another, this statute likely applies to them.
"Fiduciary" includes a trustee under any trust, expressed, implied, resulting or constructive, executor, administrator, guardian, conservator, curator, receiver, trustee in bankruptcy, assignee for the benefit of creditors, partner, agent, officer of a corporation, public or private, public officer, or any other person acting in a fiduciary capacity for any person, trust or estate.
A.R.S. § 14-7501(A)(2)The breadth of this definition matters. It means the rules about how third parties can safely deal with fiduciaries apply across a wide range of relationships, not just traditional trust or estate situations.
Good Faith and Its Practical Meaning
This statute also defines what "good faith" means for the purposes of the Uniform Fiduciaries Act. A thing is done in good faith when it is done honestly, even if it is done negligently. That is a meaningful distinction. A bank that processes a check from a fiduciary account is acting in good faith as long as the bank is honest, even if the bank failed to notice a red flag that a more careful review might have caught.
A thing is done "in good faith" within the meaning of this article, when it is in fact done honestly, whether it be done negligently or not.
A.R.S. § 14-7501(B)This definition protects institutions and individuals who interact with fiduciaries in routine transactions. It sets the bar at honesty rather than perfection, which keeps ordinary commerce from grinding to a halt every time a fiduciary account is involved.
