David L. Case, Esq.
Phoenix, Arizona
May 11, 2008
© David L. Case, Esq.

Last week the Arizona Senate passed the new Arizona Trust Code ("ATC"), 28-0 (two Senators did not vote). The House passed the Bill (HB 2806) previously, 60-0. There are some minor amendments in process which should not cause any delay. We should know shortly whether it will become law on January 1, 2009, but most of us that have been involved with this project believe it is now very likely that will occur. As with most very extensive legislation like this a few issues will no doubt arise that will need to be worked through over time, but we believe the Bill is in good shape and deserves to become law.

For many practical reasons the Model Uniform Trust Code ("UTC"), sponsored by the National Conference of Commissioners on Uniform State Laws ("NCCUSL"), has been utilized as the basic framework of the ATC. However, it is very important to note that the version of the UTC which was enacted in Arizona and then repealed before its effective date of January 1, 2004 (at times referred to herein as the "Arizona UTC") has been modified in many respects to address the numerous objections that led to repeal. It should also be noted that many of the problems of the original UTC have also been modified upon passage in other states, and some of the analysis and changes in individual states have resulted in changes to the UTC itself.

The following is a brief summary of some of the most often discussed portions of the ATC. These topics (as well as many of the other ATC provisions) will have a substantial impact on estate planning practitioners, financial institutions and others directly involved in the estate planning and estate and trust administration process. The various State Bar of Arizona members and committees that have been involved with this latest redraft of this Bill believe that the ATC cures most of the problems perceived to have been inherent in the repealed Arizona UTC and that this legislation will provide a foundation of trust law for Arizona that does not now exist and that will be of great benefit to the State of Arizona.