reglab/statecodes huggingface dataset:
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7410 - Character of receipts; definition

14-7410.
Character of receipts;  definition
A. Except as otherwise provided in this section,  a trustee shall allocate to income money received from an entity.
B. A trustee shall allocate the following receipts from an entity to principal:
1. Property other than money.
2. Money received in one distribution or a series of related distributions in exchange for part or all of a trust's interest in the entity.
3. Money received in total or partial liquidation of the entity.
4. Money received from an entity that is a regulated investment company or a real estate investment trust if the money distributed is a capital gain dividend for federal income tax purposes.
C. Money is received in partial liquidation either:
1. To the extent that the entity,  at or near the time of a distribution,  indicates that it is a distribution in partial liquidation.
2. If the total amount of money and property received in a distribution or series of related distributions is greater than twenty per cent of the entity's gross assets,  as shown by the entity's year-end financial statements immediately preceding the initial receipt.
D. Money is not received in partial liquidation,  nor may it be taken into account under subsection C,  paragraph 2 of this section to the extent that it does not exceed the amount of income tax that a trustee or beneficiary must pay on taxable income of the entity that distributes the money.
E. A trustee may rely on a statement made by an entity about the source or character of a distribution if the statement is made at or near the time of distribution by the entity's board of directors or another person or group of persons authorized to exercise powers to pay money or transfer property comparable to those of a corporation's board of directors.
F. For the purposes of this section,  "  entity"   means any corporation,  partnership,  limited liability company,  regulated investment company,  real estate investment trust,  common trust fund or other organization in which a trustee has an interest,  other than a trust or estate to which section 14-7411 applies,  a business or activity to which section 14-7412 applies or an asset-backed security to which section 14-7424 applies.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7411 - Distribution from trust or estate

14-7411.
Distribution from trust or estate
A trustee shall allocate to income an amount received as a distribution of income from a trust or an estate in which the trust has an interest other than a purchased interest and shall allocate to principal an amount received as a distribution of principal from such a trust or estate. If a trustee purchases an interest in a trust that is an investment entity or a decedent or donor transfers an interest in such a trust to a trustee,  section 14-7410 or 14-7424 applies to a receipt from the trust.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7412 - Business and other activities conducted by trustee

14-7412.
Business and other activities conducted by trustee
A. If a trustee who conducts a business or other activity determines that it is in the best interest of all of the beneficiaries to account separately for the business or activity instead of accounting for it as part of the trust's general accounting records,  the trustee may maintain separate accounting records for its transactions,  whether or not its assets are segregated from other trust assets.
B. A trustee who accounts separately for any business or other activity may determine the extent to which its net cash receipts must be retained for working capital,  the acquisition or replacement of fixed assets and other reasonably foreseeable needs of the business or activity and the extent to which the remaining net cash receipts are accounted for as principal or income in the trust's general accounting records. If a trustee sells assets of the business or other activity,  other than in the ordinary course of the business or activity,  the trustee shall account for the net amount received as principal in the trust's general accounting records to the extent the trustee determines that the amount received is no longer required in the conduct of the business.
C. Activities for which a trustee may maintain separate accounting records include:
1. Retail,  manufacturing,  service and other traditional business activities.
2. Farming.
3. Raising and selling livestock and other animals.
4. Management of rental properties.
5. Extraction of minerals and other natural resources.
6. Timber operations.
7. Activities to which section 14-7423 applies.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7413 - Principal receipts

14-7413.
Principal receipts
A trustee shall allocate to principal:
1. To the extent not allocated to income under this article,  assets received from a transferor during the transferor's lifetime,  a decedent's estate,  a trust with a terminating income interest or a payer under a contract naming the trust or its trustee as beneficiary.
2. Money or other property received from the sale,  exchange,  liquidation or change in form of a principal asset,  including realized profit,  subject to this article.
3. Amounts recovered from third parties to reimburse the trust because of disbursements described in section 14-7426,  subsection A,  paragraph 7 or for other reasons to the extent not based on the loss of income.
4. Proceeds of property taken by eminent domain,  but a separate award made for the loss of income with respect to an accounting period during which a current income beneficiary had a mandatory income interest is income.
5. Net income received in an accounting period during which there is no beneficiary to whom a trustee may or must distribute income.
6. Other receipts as provided in sections 14-7417 through 14-7424.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7414 - Rental property

14-7414.
Rental property
To the extent that a trustee accounts for receipts from rental property pursuant to this section,  the trustee shall allocate to income an amount received as rent of real or personal property,  including an amount received for cancellation or renewal of a lease. An amount received as a refundable deposit,  including a security deposit or a deposit that is to be applied as rent for future periods,  must be added to principal and held subject to the terms of the lease and is not available for distribution to a beneficiary until the trustee's contractual obligations have been satisfied with respect to that amount.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7415 - Obligation to pay money

14-7415.
Obligation to pay money
A. An amount received as interest,  whether determined at a fixed,  variable or floating rate,  on an obligation to pay money to the trustee,  including an amount received as consideration for prepaying principal,  must be allocated to income without any provision for amortization of premium.
B. A trustee shall allocate to principal an amount received from the sale,  redemption or other disposition of an obligation to pay money to the trustee more than one year after it is purchased or acquired by the trustee,  including an obligation whose purchase price or value when it is acquired is less than its value at maturity. If the obligation matures within one year after it is purchased or acquired by the trustee,  an amount received in excess of its purchase price or its value when acquired by the trust must be allocated to income.
C. This section does not apply to an obligation to which section 14-7418,  14-7419,  14-7420,  14-7421,  14-7423 or 14-7424 applies.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7416 - Insurance policies and similar contracts

14-7416.
Insurance policies and similar contracts
A. Except as otherwise provided in subsection B of this section,  a trustee shall allocate to principal the proceeds of a life insurance policy or other contract in which the trust or its trustee is named as beneficiary,  including a contract that insures the trust or its trustee against loss for damage to,  destruction of or loss of title to a trust asset. The trustee shall allocate dividends on an insurance policy to income if the premiums on the policy are paid from income,  and to principal if the premiums are paid from principal.
B. A trustee shall allocate to income proceeds of a contract that insures the trustee against loss of occupancy or other use by an income beneficiary,  loss of income or,  subject to section 14-7412,  loss of profits from a business.
C. This section does not apply to a contract to which section 14-7418 applies.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7417 - Insubstantial allocations not required

14-7417.
Insubstantial allocations not required
If a trustee determines that an allocation between principal and income required by section 14-7418,  14-7419,  14-7420,  14-7421 or 14-7424 is insubstantial,  the trustee may allocate the entire amount to principal unless one of the circumstances described in section 14-7403,  subsection C applies to the allocation. This power may be exercised by a cotrustee in the circumstances described in section 14-7403,  subsection D and may be released for the reasons and in the manner described in section 14-7403,  subsection E. An allocation is presumed to be insubstantial if either:
1. The amount of the allocation would increase or decrease net income in an accounting period,  as determined before the allocation,  by less than ten per cent.
2. The value of the asset producing the receipt for which the allocation would be made is less than ten per cent of the total value of the trust's assets at the beginning of the accounting period.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7419 - Liquidating assets; definition

14-7419.
Liquidating assets;  definition
A. A trustee shall allocate to income ten per cent of the receipts from a liquidating asset and the balance to principal.
B. For the purposes of this section,  " liquidating asset" :
1. Means an asset whose value will diminish or terminate because the asset is expected to produce receipts for a period of limited duration.
2. Includes a leasehold,  patent,  copyright,  royalty right and right to receive payments during a period of more than one year under an arrangement that does not provide for the payment of interest on the unpaid balance.
3. Does not include:
(a) A payment subject to section 14-7418.
(b) Resources subject to section 14-7420.
(c) Timber subject to section 14-7421.
(d) An activity subject to section 14-7423.
(e) An asset subject to section 14-7424.
(f) Any asset for which the trustee establishes a reserve for depreciation under section 14-7427.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7420 - Minerals, water and other natural resources

14-7420.
Minerals,  water and other natural resources
A. To the extent that a trustee accounts for receipts from an interest in minerals or other natural resources pursuant to this section,  the trustee shall allocate them as follows:
1. If received as nominal delay rental or nominal annual rent on a lease,  a receipt must be allocated to income.
2. If received from a production payment,  a receipt must be allocated to income if and to the extent that the agreement creating the production payment provides a factor for interest or its equivalent. The balance must be allocated to principal.
3. If an amount received as a royalty,  shut-in-well payment,  take-or-pay payment,  bonus or delay rental is more than nominal,  ninety per cent must be allocated to principal and the balance to income.
4. If an amount is received from a working interest or any other interest not provided for in paragraph 1,  2 or 3,  ninety per cent of the net amount received must be allocated to principal and the balance to income.
B. An amount received on account of an interest in water that is renewable must be allocated to income. If the water is not renewable,  ninety per cent of the amount must be allocated to principal and the balance to income.
C. This article applies whether or not a decedent or donor was extracting minerals,  water or other natural resources before the interest became subject to the trust.
D. If a trust owns an interest in minerals,  water or other natural resources on the effective date of this article,  the trustee may allocate receipts from the interest as provided in this article or in the manner used by the trustee before the effective date of this article. If the trust acquires an interest in minerals,  water or other natural resources after the effective date of this article,  the trustee shall allocate receipts from the interest as provided in this article.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7421 - Timber

14-7421.
Timber
A. To the extent that a trustee accounts for receipts from the sale of timber and related products pursuant to this section,  the trustee shall allocate the net receipts:
1. To income to the extent that the amount of timber removed from the land does not exceed the rate of growth of the timber during the accounting periods in which a beneficiary has a mandatory income interest.
2. To principal to the extent that the amount of timber removed from the land exceeds the rate of growth of the timber or the net receipts are from the sale of standing timber.
3. To or between income and principal if the net receipts are from the lease of timberland or from a contract to cut timber from land owned by a trust,  by determining the amount of timber removed from the land under the lease or contract and applying paragraphs 1 and 2.
4. To principal to the extent that advance payments,  bonuses and other payments are not allocated pursuant to paragraph 1,  2 or 3.
B. In determining net receipts to be allocated pursuant to subsection A,  a trustee shall deduct and transfer to principal a reasonable amount for depletion.
C. This article applies whether or not a decedent or transferor was harvesting timber from the property before it became subject to the trust.
D. If a trust owns an interest in timberland on the effective date of this article,  the trustee may allocate net receipts from the sale of timber and related products as provided in this article or in the manner used by the trustee before the effective date of this article. If the trust acquires an interest in timberland after the effective date of this article,  the trustee shall allocate net receipts from the sale of timber and related products as provided in this article.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7422 - Property not productive of income

14-7422.
Property not productive of income
A. If a marital deduction is allowed for all or part of a trust whose assets consist substantially of property that does not provide the spouse with sufficient income from or use of the trust assets,  and if the amounts that the trustee transfers from principal to income under section 14-7403 and distributes to the spouse from principal pursuant to the terms of the trust are insufficient to provide the spouse with the beneficial enjoyment required to obtain the marital deduction,  the spouse may require the trustee to make property productive of income,  convert property within a reasonable time or exercise the power conferred by section 14-7403,  subsection A. The trustee may decide which action or combination of actions to take.
B. In cases not governed by subsection A of this section,  proceeds from the sale or other disposition of an asset are principal without regard to the amount of income the asset produces during any accounting period.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7423 - Derivatives and options; definition

14-7423.
Derivatives and options;  definition
A. To the extent that a trustee does not account under section 14-7412 for transactions in derivatives,  the trustee shall allocate to principal receipts from and disbursements made in connection with those transactions.
B. If a trustee grants an option to buy property from the trust,  whether or not the trust owns the property when the option is granted,  grants an option that permits another person to sell property to the trust or acquires an option to buy property for the trust or an option to sell an asset owned by the trust,  and the trustee or other owner of the asset is required to deliver the asset if the option is exercised,  an amount received for granting the option must be allocated to principal. An amount paid to acquire the option must be paid from principal. A gain or loss realized on the exercise of an option,  including an option granted to a settlor of the trust for services rendered,  must be allocated to principal.
C. For the purposes of this section,  "  derivative"   means a contract or financial instrument or a combination of contracts and financial instruments that gives a trust the right or obligation to participate in some or all changes in the price of a tangible or intangible asset or group of assets or changes in a rate,  an index of prices or rates or other market indicator for an asset or a group of assets.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7424 - Asset-backed securities; definition

14-7424.
Asset-backed securities;  definition
A. If a trust receives a payment from interest or other current return and from other proceeds of the collateral financial assets,  the trustee shall allocate to income the portion of the payment that the payer identifies as being from interest or other current return and shall allocate the balance of the payment to principal.
B. If a trust receives one or more payments in exchange for the trust's entire interest in an asset-backed security in one accounting period,  the trustee shall allocate the payments to principal. If a payment is one of a series of payments that will result in the liquidation of the trust's interest in the security over more than one accounting period,  the trustee shall allocate ten per cent of the payment to income and the balance to principal.
C. For the purposes of this section,  " asset-backed security" :
1. Means an asset whose value is based on the right it gives the owner to receive distributions from the proceeds of financial assets that provide collateral for the security.
2. Includes an asset that gives the owner the right to receive from the collateral financial assets only the interest or other current return or only the proceeds other than interest or current return.
3. Does not include an asset to which section 14-7410 or 14-7418 applies.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7425 - Disbursements from income

14-7425.
Disbursements from income
A trustee shall make the following disbursements from income to the extent that they are not disbursements to which section 14-7405,  paragraph 2,  subdivision (b) or (c) applies:
1. One-half of the regular compensation of the trustee and of any person providing investment advisory or custodial services to the trustee,  whether based on a percentage of income or principal,  a fixed amount or an hourly charge.
2. One-half of all expenses for accountings,  regularly recurring income tax preparation services,  judicial proceedings or other matters that involve both the income and remainder interests.
3. All of the other ordinary expenses incurred in connection with the administration,  management or preservation of trust property and the distribution of income,  including interest,  ordinary repairs,  regularly recurring taxes assessed against principal and expenses of a proceeding or other matter that concerns primarily the income interest.
4. Recurring premiums on insurance covering the loss of a principal asset or the loss of income from or use of the asset.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7426 - Disbursements from principal

14-7426.
Disbursements from principal
A. A trustee shall make the following disbursements from principal:
1. The remaining one-half of the disbursements described in section 14-7425,  paragraphs 1 and 2.
2. All of the trustee's compensation calculated on principal as a fee for acceptance,  distribution or termination and disbursements made to prepare property for sale.
3. Payments on the principal of a trust debt.
4. Expenses of a proceeding that concerns primarily principal,  including a proceeding to construe the trust or to protect the trust or its property.
5. Premiums paid on a policy of insurance not described in section 14-7425,  paragraph 4 of which the trust is the owner and beneficiary.
6. Estate,  inheritance and other transfer taxes,  including penalties,  apportioned to the trust.
7. Disbursements related to environmental matters,  including reclamation,  assessing environmental conditions,  remedying and removing environmental contamination,  monitoring remedial activities and the release of substances,  preventing future releases of substances,  collecting amounts from persons liable or potentially liable for the costs of those activities,  penalties imposed under environmental laws or regulations and other payments made to comply with those laws or regulations,  statutory or common law claims by third parties and defending claims based on environmental matters.
B. If a principal asset is encumbered with an obligation that requires income from that asset to be paid directly to the creditor,  the trustee shall transfer from principal to income an amount equal to the income paid to the creditor in reduction of the principal balance of the obligation.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7427 - Transfers from income to principal for depreciation; definition

14-7427.
Transfers from income to principal for depreciation;  definition
A. A trustee may transfer to principal a reasonable amount of the net cash receipts from a principal asset that is subject to depreciation but may not transfer any amount for depreciation:
1. Of that portion of real property used or available for use by a beneficiary as a residence or of tangible personal property held or made available for the personal use or enjoyment of a beneficiary.
2. During the administration of a decedent's estate.
3. Under this section if the trustee is accounting under section 14-7412 for the business or activity in which the asset is used.
B. An amount transferred to principal need not be held as a separate fund.
C. For the purposes of this section,   " depreciation"   means a reduction in value due to wear,  tear,  decay,  corrosion or gradual obsolescence of a fixed asset having a useful life of more than one year.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7428 - Transfers from income to reimburse principal

14-7428.
Transfers from income to reimburse principal
A. If a trustee makes or expects to make a principal disbursement described in this section,  the trustee may transfer an appropriate amount from income to principal in one or more accounting periods to reimburse principal or to provide a reserve for future principal disbursements.
B. Principal disbursements to which subsection A of this section applies include the following,  but only to the extent that the trustee has not been and does not expect to be reimbursed by a third party:
1. An amount chargeable to income but paid from principal because it is unusually large,  including extraordinary repairs.
2. A capital improvement to a principal asset,  whether in the form of changes to an existing asset or the construction of a new asset,  including special assessments.
3. Disbursements made to prepare property for rental,  including tenant allowances,  leasehold improvements and brokers' commissions.
4. Periodic payments on an obligation secured by a principal asset to the extent that the amount transferred from income to principal for depreciation is less than the periodic payments.
5. Disbursements described in section 14-7426,  subsection A,  paragraph 7.
C. If the asset whose ownership gives rise to the disbursements becomes subject to a successive income interest after an income interest ends,  a trustee may continue to transfer amounts from income to principal as provided in subsection A of this section.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7429 - Income taxes

14-7429.
Income taxes
A. A tax required to be paid by a trustee based on receipts allocated to income must be paid from income.
B. A tax required to be paid by a trustee based on receipts allocated to principal must be paid from principal,  even if the tax is called an income tax by the taxing authority.
C. A tax required to be paid by a trustee on the trust's share of an entity's taxable income must be paid:
1. From income to the extent that receipts from the entity are allocated to income.
2. From principal to the extent that receipts from the entity are allocated only to principal.
3. Proportionately from principal and income to the extent that receipts from the entity are allocated to both income and principal.
4. From principal to the extent that the tax exceeds the total receipts from the entity.
D. After applying subsections A,  B and C,  the trustee shall adjust income or principal receipts to the extent that the trust's taxes are reduced because the trust receives a deduction for payments made to a beneficiary.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7430 - Adjustments between principal and income because of taxes

14-7430.
Adjustments between principal and income because of taxes
A. A fiduciary may make adjustments between principal and income to offset the shifting of economic interests or tax benefits between income beneficiaries and remainder beneficiaries that arise from:
1. Elections and decisions,  other than those described in subsection B,  that the fiduciary makes from time to time regarding tax matters.
2. An income tax or any other tax that is imposed on the fiduciary or a beneficiary as a result of a transaction involving or a distribution from the estate or trust.
3. The ownership by an estate or trust of an interest in an entity whose taxable income,  whether or not distributed,  is includible in the taxable income of the estate,  the trust or a beneficiary.
B. If the amount of an estate tax marital deduction or charitable contribution deduction is reduced because a fiduciary deducts an amount paid from principal for income tax purposes instead of deducting it for estate tax purposes,  and as a result estate taxes paid from principal are increased and income taxes paid by an estate,  trust or beneficiary are decreased,  each estate,  trust or beneficiary that benefits from the decrease in income tax shall reimburse the principal from which the increase in estate tax is paid. The total reimbursement must equal the increase in the estate tax to the extent that the principal used to pay the increase would have qualified for a marital deduction or charitable contribution deduction but for the payment. The proportionate share of the reimbursement for each estate,  trust or beneficiary whose income taxes are reduced must be the same as its proportionate share of the total decrease in income tax. An estate or trust shall reimburse principal from income.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7501 - Definitions

14-7501.
Definitions
A. In this article,  unless the context otherwise requires:
1. " Bank"  includes commercial banks,  savings banks,  trust companies,  and any person or association of persons,  whether incorporated or not,  carrying on the business of banking.
2. " 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.
3. " Person"  includes a corporation,  partnership,  or other association,  or two or more persons having a joint or common interest.
4. " Principal"  includes any person to whom a fiduciary as such owes an obligation.
B. 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.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7502 - Application of payments made to fiduciaries

14-7502.
Application of payments made to fiduciaries
A person who in good faith pays or transfers to a fiduciary any money or other property which the fiduciary as such is authorized to receive,  is not responsible for the proper application thereof by the fiduciary;  and any right or title acquired from the fiduciary in consideration of such payment or transfer is not invalid in consequence of a misapplication by the fiduciary.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7503 - Transfer of negotiable instrument by fiduciary

14-7503.
Transfer of negotiable instrument by fiduciary
If any negotiable instrument payable or endorsed to a fiduciary as such is endorsed by the fiduciary,  or if any negotiable instrument payable or endorsed to his principal is endorsed by a fiduciary empowered to endorse such instrument on behalf of his principal,  the endorsee is not bound to inquire whether the fiduciary is committing a breach of his obligation as fiduciary in endorsing or delivering the instrument,  and is not chargeable with notice that the fiduciary is committing a breach of his obligation as fiduciary unless he takes the instrument with actual knowledge of such breach or with knowledge of such facts that his action in taking the instrument amounts to bad faith. If,  however,  such instrument is transferred by the fiduciary in payment of or as security for a personal debt of the fiduciary to the actual knowledge of the creditor or is transferred in any transaction known by the transferee to be for the personal benefit of the fiduciary,  the creditor or other transferee is liable to the principal if the fiduciary in fact commits a breach of his obligation as fiduciary in transferring the instrument.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7504 - Check drawn by fiduciary payable to third person

14-7504.
Check drawn by fiduciary payable to third person
If a check or other bill of exchange is drawn by a fiduciary as such,  or in the name of his principal by a fiduciary empowered to draw such instrument in the name of his principal,  the payee is not bound to inquire whether the fiduciary is committing a breach of his obligation as a fiduciary in drawing or delivering the instrument,  and is not chargeable with notice that the fiduciary is committing a breach of his obligation as fiduciary unless he takes the instrument with actual knowledge of such breach or with knowledge of such facts that his action in taking the instrument amounts to bad faith. If,  however,  such instrument is payable to a personal creditor of the fiduciary and delivered to the creditor in payment of or as security for a personal debt of the fiduciary to the actual knowledge of the creditor or is drawn and delivered in any transaction known by the payee to be for the personal benefit of the fiduciary,  the creditor or other payee is liable to the principal if the fiduciary in fact commits a breach of his obligation as fiduciary in drawing or delivering the instrument.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7505 - Check drawn by and payable to fiduciary

14-7505.
Check drawn by and payable to fiduciary
If a check or other bill of exchange is drawn by a fiduciary as such or in the name of his principal by a fiduciary empowered to draw such instrument in the name of his principal,  payable to the fiduciary personally,  or payable to a third person and by him transferred to the fiduciary,  and is thereafter transferred by the fiduciary,  whether in payment of a personal debt of the fiduciary or otherwise,  the transferee is not bound to inquire whether the fiduciary is committing a breach of his obligation as fiduciary in transferring the instrument,  and is not chargeable with notice that the fiduciary is committing a breach of his obligation as fiduciary unless he takes the instrument with actual knowledge of such breach or with knowledge of such facts that his action in taking the instrument amounts to bad faith.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7506 - Deposit in name of fiduciary as such

14-7506.
Deposit in name of fiduciary as such
If a deposit is made in a bank to the credit of a fiduciary as such,  the bank is authorized to pay the amount of the deposit or any part thereof upon the check of the fiduciary,  signed with the name in which such deposit is entered,  without being liable to the principal,  unless the bank pays the check with actual knowledge that the fiduciary is committing a breach of his obligation as fiduciary in drawing the check or with knowledge of such facts that its action in paying the check amounts to bad faith. If,  however,  such a check is payable to the drawee bank and is delivered to it in payment of or as security for a personal debt of the fiduciary to it,  the bank is liable to the principal if the fiduciary in fact commits a breach of his obligation as fiduciary in drawing or delivering the check.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7507 - Deposit in name of principal

14-7507.
Deposit in name of principal
If a check is drawn upon the account of his principal in a bank by a fiduciary who is empowered to draw checks upon his principal's account,  the bank is authorized to pay such check without being liable to the principal,  unless the bank pays the check with actual knowledge that the fiduciary is committing a breach of his obligation as fiduciary in drawing such check,  or with knowledge of such facts that its action in paying the check amounts to bad faith. If,  however,  such a check is payable to the drawee bank and is delivered to it in payment of or as security for a personal debt of the fiduciary to it,  the bank is liable to the principal if the fiduciary in fact commits a breach of his obligation as fiduciary in drawing or delivering the check.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7508 - Deposit in fiduciary's personal account

14-7508.
Deposit in fiduciary's personal account
If a fiduciary makes a deposit in a bank to his personal credit of checks drawn by him upon an account in his own name as fiduciary,  or of checks payable to him as fiduciary,  or of checks drawn by him upon an account in the name of his principal if he is empowered to draw checks thereon,  or of checks payable to his principal and endorsed by him,  if he is empowered to endorse such checks,  or if he otherwise makes a deposit of funds held by him as fiduciary,  the bank receiving such deposit is not bound to inquire whether the fiduciary is committing thereby a breach of his obligation as fiduciary;  and the bank is authorized to pay the amount of the deposit or any part thereof upon the personal check of the fiduciary without being liable to the principal,  unless the bank receives the deposit or pays the check with actual knowledge that the fiduciary is committing a breach of his obligation as fiduciary in making such deposit or in drawing such check,  or with knowledge of such facts that its action in receiving the deposit or paying the check amounts to bad faith.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7509 - Deposit in names of two or more trustees

14-7509.
Deposit in names of two or more trustees
When a deposit is made in a bank in the name of two or more persons as trustees and a check is drawn upon the trust account by any trustee or trustees authorized by the other trustee or trustees to draw checks upon the trust account,  neither the payee nor other holder nor the bank is bound to inquire whether it is a breach of trust to authorize such trustee or trustees to draw checks upon the trust account,  and is not liable unless the circumstances be such that the action of the payee or other holder or the bank amounts to bad faith.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7510 - Cases not provided for by article

14-7510.
Cases not provided for by article
In any case not provided for in this article the rules of law and equity,  including the law merchant and those rules of law and equity relating to trusts,  agency,  negotiable instruments and banking,  shall continue to apply.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7651 - Definitions

14-7651.
Definitions
In this article,  unless the context otherwise requires:
1. " Adult"  means a person who is at least twenty-one years of age.
2. " Benefit plan"  means an employer's plan for the benefit of an employee or partner.
3. " Broker"  means a person lawfully engaged in the business of effecting transactions in securities or commodities for the person's own account or for the account of others.
4. " Conservator"  means a person appointed or qualified by a court to act as a general,  limited or temporary guardian of a minor's property or a person legally authorized to perform substantially the same functions.
5. " Court"  means the superior court.
6. " Custodial property"  means an interest in property that is transferred to a custodian pursuant to this article and income from and proceeds of that interest in property.
7. " Custodian"  means a person designated pursuant to section 14-7659 or a successor or substitute custodian designated pursuant to section 14-7668.
8. " Financial institution"  means a bank,  trust company,  savings institution or credit union,  which is chartered and supervised under state or federal law.
9. " Legal representative"  means an individual's personal representative or conservator.
10. " Member of the minor's family"  means the minor's parent,  stepparent,  spouse,  grandparent,  brother,  sister,  uncle or aunt,  whether of the whole or half blood or by adoption.
11. " Minor"  means a person under the age of twenty-one years.
12. " Person"  means an individual,  corporation,  organization or other legal entity.
13. " Personal representative"  means an executor,  administrator,  successor personal representative or special administrator of a decedent's estate or a person legally authorized to perform substantially the same functions.
14. " State"  includes a state of the United States,  the District of Columbia,  the Commonwealth of Puerto Rico and a territory or possession subject to the legislative authority of the United States.
15. " Street name or nominee name"  means registration used by a broker or financial institution for holding securities if they are not registered in the name of the beneficial owner.
16. " Transfer"  means a transaction that creates custodial property pursuant to section 14-7659.
17. " Transferor"  means a person who makes a transfer pursuant to this article.
18. " Trust company"  means a financial institution,  corporation or other legal entity,  which is authorized to exercise general trust powers.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7652 - Scope and jurisdiction

14-7652.
Scope and jurisdiction
A. This article applies to a transfer that refers to this article in the designation made pursuant to section 14-7659 by which the transfer is made,  if at the time of the transfer the transferor,  the minor or the custodian is a resident of this state or the custodial property is located in this state. The custodianship so created remains subject to this article despite a subsequent change in the residence of a transferor,  the minor or the custodian or the removal of custodial property from this state.
B. A person designated as custodian pursuant to this article is subject to personal jurisdiction in this state with respect to any matter relating to the custodianship.
C. A transfer which purports to be made and is valid under the uniform transfers to minors act,  the uniform gifts to minors act or a substantially similar act of another state is governed by the law of the designated state and may be executed and is enforceable in this state if at the time of the transfer the transferor,  the minor or the custodian is a resident of the designated state or the custodial property is located in the designated state.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7653 - Nomination of custodian

14-7653.
Nomination of custodian
A. A person having the right to designate the recipient of property transferable on the occurrence of a future event may revocably nominate a custodian to receive the property for a minor beneficiary on the occurrence of the event by naming the custodian followed in substance by the words,  " as custodian for _______________ (name of minor) under the Arizona uniform transfers to minors act" . The nomination may name one or more persons as substitute custodians to whom the property must be transferred,  in the order named,  if the first nominated custodian dies before the transfer or is unable,  declines or is ineligible to serve. The nomination may be made in a will,  a trust,  a deed,  an instrument exercising a power of appointment or a writing designating a beneficiary of contractual rights which is registered with or delivered to the payor,  issuer or other obligor of the contractual rights.
B. A custodian nominated pursuant to this section must be a person to whom a transfer of property of that kind may be made pursuant to section 14-7659,  subsection A.
C. The nomination of a custodian pursuant to this section does not create custodial property until the nominating instrument becomes irrevocable or a transfer to the nominated custodian is completed pursuant to section 14-7659. Unless the nomination of a custodian has been revoked,  on the occurrence of the future event the custodianship becomes effective and the custodian shall enforce a transfer of the custodial property pursuant to section 14-7659.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7654 - Transfer by gift or exercise of power of appointment

14-7654.
Transfer by gift or exercise of power of appointment
A person may make a transfer by irrevocable gift to,  or the irrevocable exercise of a power of appointment in favor of,  a custodian for the benefit of a minor pursuant to section 14-7659.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7655 - Transfer authorized by will or trust

14-7655.
Transfer authorized by will or trust
A. A personal representative or trustee may make an irrevocable transfer pursuant to section 14-7659 to a custodian for the benefit of a minor as authorized in the governing will or trust.
B. If the testator or settlor has nominated a custodian pursuant to section 14-7653 to receive the custodial property,  the transfer must be made to that person.
C. If the testator or settlor has not nominated a custodian pursuant to section 14-7653,  or all persons so nominated as custodian die before the transfer or are unable,  decline or are ineligible to serve,  the personal representative or the trustee,  as the case may be,  shall designate the custodian from among those eligible to serve as custodian for property of that kind pursuant to section 14-7659,  subsection A.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7656 - Other transfer by fiduciary

14-7656.
Other transfer by fiduciary
A. Pursuant to subsection C of this section,  a personal representative or trustee may make an irrevocable transfer to another adult or trust company as custodian for the benefit of a minor pursuant to section 14-7659 in the absence of a will or under a will or trust that does not contain an authorization to do so.
B. Pursuant to subsection C of this section,  a conservator may make an irrevocable transfer to another adult or trust company as custodian for the benefit of the minor pursuant to section 14-7659.
C. A transfer pursuant to subsection A or B of this section may be made only if all of the following apply:
1. The personal representative,  trustee or conservator considers the transfer to be in the best interest of the minor.
2. The transfer is not prohibited by or inconsistent with provisions of the applicable will,  trust agreement or other governing instrument.
3. The transfer is authorized by the court if it exceeds ten thousand dollars in value.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7657 - Transfer by obligor

14-7657.
Transfer by obligor
A. Pursuant to subsections B and C of this section,  a person who is not subject to section 14-7655 or 14-7656 and who holds property of or owes a liquidated debt to a minor who does not have a conservator may make an irrevocable transfer to a custodian for the benefit of the minor pursuant to section 14-7659.
B. If a person having the right to do so pursuant to section 14-7653 has nominated a custodian under that section to receive the custodial property,  the transfer must be made to that person.
C. If no custodian has been nominated pursuant to section 14-7653 or all persons so nominated as custodian die before the transfer or are unable,  decline or are ineligible to serve,  a transfer pursuant to this section may be made to an adult member of the minor's family or to a trust company unless the property exceeds ten thousand dollars in value.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7660 - Single custodianship

14-7660.
Single custodianship
A transfer may be made only for one minor and only one person may be the custodian. All custodial property held under this article by the same custodian for the benefit of the same minor constitutes a single custodianship.
2023 Arizona Revised Statutes › Title 14 - Trusts, Estates and Protective Proceedings › § 14-7661 - Validity and effect of transfer

14-7661.
Validity and effect of transfer
A. The validity of a transfer made in a manner prescribed in this article is not affected by any of the following:
1. Failure of the transferor to comply with section 14-7659,  subsection C concerning possession and control.
2. Designation of an ineligible custodian,  except designation of the transferor in the case of property for which the transferor is ineligible to serve as custodian pursuant to section 14-7659,  subsection A.
3. Death or incapacity of a person nominated pursuant to section 14-7653 or designated under section 14-7659 as custodian or the disclaimer of the office by that person.
B. A transfer made pursuant to section 14-7659 is irrevocable,  and the custodial property is indefeasibly vested in the minor. The custodian has all the rights,  powers,  duties and authority provided in this article,  and neither the minor nor the minor's legal representative has any right,  power,  duty or authority with respect to the custodial property except as provided in this article.
C. By making a transfer,  the transferor incorporates in the disposition all the provisions of this article and grants to the custodian and to any third person dealing with a person designated as custodian the respective powers,  rights and immunities provided in this article.