REVOCABLE LIVING TRUST AGREEMENT
(Arizona Trust Code, A.R.S. § 14-10101 et seq.)
TABLE OF CONTENTS
- Document Header & Recitals
- Defined Terms
- Creation, Funding & Nature of Trust
- Revocation & Amendment
- Dispositive Provisions During Settlor’s Lifetime
- Dispositive Provisions Upon Settlor’s Incapacity
- Dispositive Provisions Upon Settlor’s Death
- Trustees, Successor Trustees & Fiduciary Powers
- Administrative, Investment & Asset-Transfer Procedures
- Liability, Indemnification & Limitation of Liability
- Default & Remedies
- Dispute Resolution
- General Provisions
- Execution Block
- Schedule A – Assignment & Identification of Trust Property
[// GUIDANCE: Bracketed items must be completed or modified by counsel for each client matter.]
1. DOCUMENT HEADER & RECITALS
This REVOCABLE LIVING TRUST AGREEMENT (this “Agreement”) is made and entered into effective as of [EFFECTIVE DATE] (the “Effective Date”) by and between:
• [SETTLOR LEGAL NAME], residing at [SETTLOR ADDRESS] (“Settlor”); and
• [INITIAL TRUSTEE LEGAL NAME], residing at [TRUSTEE ADDRESS] (“Trustee”).
(Collectively, the “Parties.”)
A. Settlor desires to create a revocable trust pursuant to the Arizona Trust Code, A.R.S. § 14-10101 et seq., to hold and manage certain assets for Settlor’s benefit during Settlor’s lifetime and, upon the occurrence of certain events, for the benefit of the Beneficiaries identified herein.
B. Trustee is willing to accept the trust created hereby and to hold, administer, and distribute the Trust Estate pursuant to the terms of this Agreement.
C. The Parties intend that this Agreement be interpreted and enforced in accordance with the laws of the State of Arizona without regard to conflict-of-law principles.
NOW, THEREFORE, in consideration of the mutual covenants herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Settlor hereby declares and agrees as follows:
2. DEFINED TERMS
For purposes of this Agreement, the following capitalized terms shall have the meanings set forth below. Defined terms appear alphabetically; cross-references in parentheses indicate principal Article or Section of usage.
“Arizona Trust Code” means Title 14, Chapter 10 of the Arizona Revised Statutes (primary statutory framework governing this Trust).
“Beneficiary” or “Beneficiaries” – The persons or entities identified in Section 5.1 and any successors thereto.
“Disability” – Settlor’s incapacity determined under Section 6.1.
“Distribution Date” – The date on which all or a portion of the Trust Estate becomes distributable under Articles 5, 6, or 7.
“Governing Law” – The internal laws of the State of Arizona.
“Probate Court” – The [NAME OF COUNTY] Superior Court, Probate Division, or any successor court having jurisdiction.
“Schedule A” – The written schedule, as amended, identifying property transferred to the Trust.
“Successor Trustee” – Any person or institution appointed in accordance with Article 8.
“Trust” – The revocable trust created by this Agreement.
“Trust Assets” or “Trust Estate” – All property, real or personal, tangible or intangible, transferred to or otherwise held under this Agreement, together with any increases, substitutions, or proceeds thereof.
“Trustee” – The Initial Trustee or any Successor Trustee acting hereunder.
[// GUIDANCE: Add additional defined terms (e.g., “Issue,” “Net Income,” “Principal”) as required for the dispositive scheme.]
3. CREATION, FUNDING & NATURE OF TRUST
3.1 Declaration of Trust. Settlor hereby transfers, conveys, and assigns to Trustee, in trust, the property described on Schedule A, receipt of which is hereby acknowledged. Additional property may be transferred to the Trust at any time by Settlor or any other person with Trustee’s consent.
3.2 Revocable Trust; Grantor Trust Status. During Settlor’s lifetime, the Trust shall be fully revocable, and all income, deductions, and credits shall be reportable on Settlor’s federal and state income-tax returns pursuant to 26 U.S.C. § 671 et seq.
3.3 Sole Beneficial Interest. While living and not under Disability, Settlor shall be the sole Beneficiary entitled to distributions.
3.4 Spendthrift Protection. To the maximum extent permitted by A.R.S. § 14-10502, the interest of any Beneficiary other than Settlor shall not be transferable or subject to creditor claims prior to actual receipt.
4. REVOCATION & AMENDMENT
4.1 Revocation. Settlor may revoke this Agreement in whole or in part at any time by a writing signed by Settlor and delivered to Trustee during Settlor’s lifetime.
4.2 Amendment. Settlor may amend any provision of this Agreement by a writing signed and dated by Settlor and delivered to Trustee; provided, however, no amendment shall enlarge a Trustee’s duties without the Trustee’s written consent.
4.3 Automatic Revocation on Dissolution of Marriage. If Settlor and [SPOUSE NAME] are divorced after the Effective Date, all provisions benefiting the former spouse are automatically revoked in accordance with A.R.S. § 14-2804.
5. DISPOSITIVE PROVISIONS DURING SETTLOR’S LIFETIME
5.1 Distributions for Settlor’s Benefit. So long as Settlor is living and not under Disability, Trustee shall distribute to Settlor so much of the net income and principal as Settlor may request in writing.
5.2 Distributions for Settlor’s Dependents. Trustee may, in Trustee’s discretion, distribute income or principal for the health, education, maintenance, or support (“HEMS Standard”) of Settlor’s [LIST DEPENDENTS] if Settlor is unable to provide direction.
6. DISPOSITIVE PROVISIONS UPON SETTLOR’S INCAPACITY
6.1 Determination of Disability. “Disability” shall be deemed to exist upon:
(a) written certification by two licensed physicians that Settlor is unable to manage Settlor’s property and financial affairs; or
(b) appointment of a conservator for Settlor’s estate by a court of competent jurisdiction.
6.2 Distributions During Disability. During any period of Disability, Trustee shall apply or distribute Trust income and principal for Settlor’s HEMS needs and may also provide for any person for whom Settlor was customarily supporting prior to Disability.
6.3 Restoration of Capacity. Upon written certification by Settlor’s attending physician that Settlor has regained capacity, Settlor’s full powers under Article 4 shall be reinstated.
7. DISPOSITIVE PROVISIONS UPON SETTLOR’S DEATH
7.1 Payment of Expenses & Taxes. At Settlor’s death, Trustee shall pay from the Trust Estate (to the extent other assets are not available) Settlor’s legally enforceable debts, funeral and burial expenses, estate administration expenses, and any applicable death taxes.
7.2 Specific Gifts. Upon Settlor’s death, Trustee shall distribute the following assets free of trust:
• [DESCRIPTION OF ASSET] to [BENEFICIARY NAME]
• [REPEAT AS NECESSARY]
7.3 Residual Trust Estate. The remaining Trust Estate shall be distributed as follows:
(a) [PERCENTAGE]% in equal shares, per stirpes, to Settlor’s Issue;
(b) [PERCENTAGE]% to [CHARITABLE ORGANIZATION], provided it is a tax-exempt organization under I.R.C. § 501(c)(3) at Settlor’s death;
(c) Any share that lapses shall be added proportionately to the remaining shares.
[// GUIDANCE: Practitioners should tailor dispositive terms to client objectives, including age-vesting provisions, continuing trusts, GST planning, etc.]
8. TRUSTEES, SUCCESSOR TRUSTEES & FIDUCIARY POWERS
8.1 Acceptance. A Trustee’s acceptance shall be evidenced by signing the execution block or a separate written acceptance.
8.2 Resignation. A Trustee may resign by giving thirty (30) days’ written notice to Settlor (if then living) and all Qualified Beneficiaries as defined in A.R.S. § 14-10103(16).
8.3 Removal. Settlor (or, after Settlor’s death, a majority of the adult Beneficiaries) may remove any Trustee with or without cause by written notice; the removal shall be effective upon acceptance by the Successor Trustee.
8.4 Successor Trustees. The order of succession shall be:
(a) [FIRST SUCCESSOR TRUSTEE];
(b) [SECOND SUCCESSOR TRUSTEE];
(c) Any person or institution unanimously selected by the adult Beneficiaries.
8.5 Fiduciary Powers. In addition to powers under A.R.S. §§ 14-10801 to 14-10818 and any other applicable statute, Trustee shall have all powers that an individual has with respect to individually owned property, including the power to:
• buy, sell, exchange, lease, or pledge Trust Assets;
• exercise stock-subscription rights;
• engage agents and professionals and delegate powers consistent with A.R.S. § 14-10707;
• continue any business;
• adjust between income and principal under A.R.S. § 14-10401 et seq. (Principal & Income Act).
8.6 Bond. No Trustee shall be required to furnish bond or security for the faithful performance of duties unless required by a court of competent jurisdiction.
9. ADMINISTRATIVE, INVESTMENT & ASSET-TRANSFER PROCEDURES
9.1 Asset Registration & Title. Trustee shall ensure Trust ownership is reflected on all titles, accounts, and deeds (“[TRUST NAME], as Trustee of the [TRUST NAME] dated [DATE]”).
9.2 Real Property Transfers. Deeds conveying Arizona real property to the Trust shall be recorded with the [COUNTY RECORDER] in accordance with A.R.S. § 33-401.
9.3 Personal Property Assignment. Concurrently with execution, Settlor shall execute a General Assignment transferring tangible personal property set forth on Schedule A to the Trust.
9.4 Post-Death Funding of Pour-Over Will. Trustee shall coordinate with the personal representative under Settlor’s pour-over will to receive any property passing to the Trust under that will.
9.5 Investment Standards. Trustee shall invest and manage Trust Assets as a prudent investor in accordance with A.R.S. § 14-10901 et seq., considering purposes, terms, and distribution requirements.
10. LIABILITY, INDEMNIFICATION & LIMITATION OF LIABILITY
10.1 Trustee Indemnification. Except for acts involving bad faith, intentional misconduct, or gross negligence, Trustee shall be indemnified from, and against, any liability, loss, or expense incurred in the administration of the Trust, including reasonable attorneys’ fees, and such indemnification shall be satisfied solely from the Trust Assets.
10.2 Limitation of Liability. Any claim arising under or related to this Agreement shall be exclusively satisfied from the Trust Estate; no Trustee or Beneficiary shall have personal liability beyond the extent of the Trust Assets.
10.3 Reliance on Documents. Trustee may rely conclusively upon any document believed to be genuine and properly executed and shall have no duty to investigate its authenticity.
11. DEFAULT & REMEDIES
11.1 Events of Default. For purposes of fiduciary oversight, a default exists if a Trustee:
(a) breaches fiduciary duties under Governing Law;
(b) fails to account within sixty (60) days of a written demand from a Qualified Beneficiary;
(c) becomes incapacitated or files for bankruptcy; or
(d) materially violates this Agreement.
11.2 Notice & Cure. Any Qualified Beneficiary may provide written notice specifying default. Trustee shall have thirty (30) days to cure unless the default is incapable of cure.
11.3 Remedies. If uncured, the Probate Court may:
• compel performance;
• award damages payable solely from Trustee’s compensation or, if bad faith is found, personally;
• remove Trustee and appoint a Successor Trustee;
• award attorneys’ fees and costs to the prevailing party.
12. DISPUTE RESOLUTION
12.1 Governing Law. This Agreement and all disputes hereunder shall be governed by and construed in accordance with the laws of the State of Arizona.
12.2 Forum Selection. The Parties consent to the exclusive jurisdiction of the [COUNTY] Superior Court, Probate Division, for all judicial proceedings concerning the Trust.
12.3 Optional Arbitration. Notwithstanding Section 12.2, any Qualified Beneficiary and Trustee may, by unanimous written agreement, submit any matter to binding arbitration administered by [ARBITRATION SERVICE] pursuant to its then-current rules. If arbitration is elected:
(a) Venue shall be [CITY, AZ];
(b) The arbitrator shall be a retired Arizona judge with trust-law experience;
(c) Injunctive relief necessary to protect Trust Assets may be sought in Probate Court pending arbitration.
12.4 Jury Waiver. As probate matters are generally tried to the court, the Parties acknowledge that no right to jury trial exists for disputes within Probate Court jurisdiction.
12.5 Injunctive Relief. Notwithstanding any contrary provision, Trustee or any Beneficiary may seek temporary, preliminary, or permanent injunctive relief to enforce fiduciary duties or prevent waste or dissipation of Trust Assets.
13. GENERAL PROVISIONS
13.1 Amendment. Only Settlor may amend this Agreement as provided in Article 4.
13.2 No Assignment. Except as expressly provided, no party may assign rights or delegate obligations under this Agreement.
13.3 Severability. If any provision is held invalid, the remaining provisions shall remain in full force, and the invalid provision shall be reformed to the minimum extent necessary to achieve the Parties’ intent.
13.4 Entire Agreement. This Agreement, together with Schedule A and any written amendments, constitutes the entire agreement of the Parties concerning the subject matter hereof.
13.5 Counterparts & Electronic Signatures. This Agreement may be executed in counterparts, each constituting an original and all together one instrument. Signatures transmitted electronically (e.g., PDF, DocuSign) shall be deemed originals under the Arizona Uniform Electronic Transactions Act, A.R.S. § 44-7001 et seq.
13.6 Headings. Headings are for convenience only and shall not affect interpretation.
14. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have executed this REVOCABLE LIVING TRUST AGREEMENT as of the Effective Date.
| Settlor | |
|---|---|
| _______ | Date: ______ |
| [SETTLOR NAME] |
| Trustee | |
|---|---|
| _______ | Date: ______ |
| [TRUSTEE NAME] |
NOTARIZATION
State of Arizona )
County of [__] ) ss.
On this ___ day of ____, 20__, before me, the undersigned Notary Public, personally appeared [SETTLOR NAME] and [TRUSTEE NAME], known to me or satisfactorily proven to be the individuals who executed the foregoing instrument, and acknowledged that they executed the same for the purposes therein contained.
Notary Public
My Commission Expires: ____
[// GUIDANCE: Arizona law does not require witnesses for a trust; however, the notarial acknowledgment is strongly recommended, especially for real-property conveyancing.]
15. SCHEDULE A – ASSIGNMENT & IDENTIFICATION OF TRUST PROPERTY
Pursuant to Article 3, Settlor hereby assigns, transfers, and delivers to Trustee, in trust, all right, title, and interest in and to the following property:
-
Real Property:
• [LEGAL DESCRIPTION / APN] – Address: [__] -
Financial Accounts:
• [INSTITUTION], Account No. [_] -
Securities & Investment Accounts:
• [BROKERAGE], Account No. [_] -
Tangible Personal Property:
• All household furnishings, artwork, jewelry, collectibles, and other tangible personal property owned by Settlor located at [RESIDENCE ADDRESS]. -
Life Insurance & Retirement Plans:
• [POLICY/PLAN NAME & NUMBER], beneficiary designation to “Trustee of the [TRUST NAME] under agreement dated [DATE].”
[// GUIDANCE: Attach additional schedules or deeds as needed; record real-property deeds promptly to complete funding.]