{"id":515,"date":"2009-10-28T22:51:54","date_gmt":"2009-10-29T05:51:54","guid":{"rendered":"http:\/\/www.dbfwclegal.com\/?p=515"},"modified":"2017-12-01T16:26:41","modified_gmt":"2017-12-01T23:26:41","slug":"changes-trustee-reporting-requirements-arizona-trust-code","status":"publish","type":"post","link":"https:\/\/www.dbfwclegal.com\/changes-trustee-reporting-requirements-arizona-trust-code\/","title":{"rendered":"Changes To Trustee Reporting Requirements Under The Arizona Trust Code"},"content":{"rendered":"

If you are currently or soon may be serving as the trustee of an irrevocable trust you should be aware that the Arizona Trust Code (ATC)<\/a>, which became effective January 1, 2009, imposes certain new obligations on trustees of irrevocable trusts.<\/p>\n

Prior to January 1, 2009, ARS \u00a714-7303 required the trustee to provide beneficiaries reports of the trust activity only upon request of a beneficiary<\/em><\/strong>.\u00a0 Who qualified as a beneficiary entitled to request information was ambiguous, but current income beneficiaries were clearly within the class of beneficiaries entitled to information.<\/p>\n

Now<\/strong><\/em> the ATC defines both qualified and permissible beneficiaries to distinguish who must<\/em> receive information and who may<\/em> receive information.\u00a0 Generally qualified beneficiaries are current income beneficiaries and those who become entitled to principal or income upon the death of the current income beneficiary.<\/p>\n

Unless the trust agreement provides otherwise, the trustee of an irrevocable trust must provide a report to the qualified beneficiaries, permissible beneficiaries, and other beneficiaries who request it.<\/p>\n

The report must be provided at least annually.\u00a0 The first reporting period ends December 31, 2009.<\/p>\n

The report must contain the following information:<\/p>\n

    \n
  1. A list of the trust property and the market value of such property, if feasible.<\/li>\n
  2. Liabilities<\/li>\n
  3. Receipts and disbursements.<\/li>\n<\/ol>\n

    The report need not be prepared according to generally accepted accounting principles (GAAP).\u00a0 There are no guidelines on what form the report must take, but a modified form loosely based on the form used to file a judicial accounting will probably be sufficient.\u00a0 The outline for such a report is as follows:<\/p>\n

    \n

    Schedule A = Opening inventory.\u00a0 A listing of the assets and their respective values.
    \nSchedule B = List of outstanding debts.
    \nSchedule C = List of all receipts
    \nSchedule D = List of all expenditures
    \nSchedule E = Summary of all other schedules ending with an ending balance.<\/p>\n<\/blockquote>\n

    An alternate format could be as simple as providing copies of account statements for the year (raw data).<\/p>\n

    If assets are held other than insured brokerage or bank accounts, a short narrative report describing the assets and their characteristics is probably appropriate.<\/p>\n<\/div>

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