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REFERENCE TITLE: trusts; beneficiary suits against settlor |
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State of Arizona House of Representatives Fifty-first Legislature First Regular Session 2013
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HB 2512 |
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Introduced by Representative Allen
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AN ACT
amending title 14, chapter 11, article 2, Arizona Revised Statutes, by adding section 14-10206; relating to the trust code.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 14, chapter 11, article 2, Arizona Revised Statutes, is amended by adding section 14-10206, to read:
14-10206. Beneficiary suits against settlor or trustee; damages by beneficiary; alternative dispute resolution; definition
A. If a beneficiary files a civil action against a settlor regarding a trust or other governing instrument, all of the following apply:
1. The beneficiary is deemed to have predeceased the settlor without issue for the purposes of all trusts and governing instruments between the settlor and beneficiary, unless the civil action is found by clear and convincing evidence to be filed with the settlor's express written consent.
2. The court shall dismiss the civil action unless the beneficiary files a bond with the court in an amount equal to the estimated attorney fees and costs necessary for the settlor to defend the action.
3. The beneficiary shall pay all of the settlor's attorney fees and costs in defending the civil action on a claim by claim basis, unless the beneficiary is the prevailing party on a claim.
4. The damages claimed by a beneficiary shall not exceed the monetary equivalent actually contributed by the beneficiary to property of the trust.
B. Subsection A of this section applies to a civil action brought by a beneficiary against a trustee that is acting in good faith to carry out the instructions of the settlor.
C. Any damages that the beneficiary causes to the settlor are not extinguished by the death of the settlor and may be claimed by the estate of the settlor.
D. A trustee may impose mandatory dispute resolution procedures to a trust or governing instrument to resolve disputes between family members in a manner consistent with the intent of the settlor.
E. For the purposes of this section, "governing instrument" means a deed, a will, a trust, a custodianship, an insurance or annuity policy, an account with pay on death designation, a security registered in beneficiary form, a pension, a profit sharing, retirement or similar benefit plan, a family limited partnership, an instrument creating or exercising a power of appointment, a power of attorney, an estate planning document or a dispositive, appointive or nominative instrument of any similar type.
Sec. 2. Applicability
Section 14-10206, Arizona Revised Statutes, added by this act, applies to any trust regardless of whether it was executed before the effective date of this act.