Can a fiduciary be a beneficiary of the trust they manage?

A fiduciary can indeed be a beneficiary of the trust they manage, but this situation often raises potential conflicts of interest. In fiduciary relationships, the fiduciary has a duty to act in the best interest of the beneficiaries. When a fiduciary is also a beneficiary, their personal interest may conflict with their fiduciary duties, potentially influencing their decision-making to favor their own interests over those of other beneficiaries.

It's crucial for fiduciaries to handle such situations with transparency and care, often involving full disclosure to all beneficiaries and possibly obtaining consent from the other beneficiaries to mitigate any conflicts. Furthermore, while a fiduciary can be a beneficiary, they must still adhere to their legal duties and obligations, ensuring that their actions serve the best interests of the trust as a whole.

The other options present limitations that do not reflect the nuance of fiduciary responsibilities or the rules surrounding these situations. The legality of a fiduciary being a beneficiary in Arizona allows for such arrangements as long as the fiduciary acts properly and in accordance with their obligations.