AZ SB1207

Establishes "qualified spendthrift trusts" under Arizona law that provide creditor protection for a settlor who transfers assets to the trust, preventing creditors from satisfying claims against the settlor's transfer or beneficial interest in the trust.

Requires qualified spendthrift trusts to meet specific conditions including: governance by Arizona law, at least one qualified trustee, non-transferable beneficial interests, restrictions on settlor's ability to revoke/amend without consent, no mandatory distributions, and 30-day notice to creditors before distributions.

Imposes strict requirements on asset transfers to qualified spendthrift trusts, including sworn affidavits confirming the settlor has full authority to transfer, will not become insolvent, does not intend to defraud creditors, and is not in default on domestic obligations like child support or divorce property divisions.

Sets shortened statutes of limitations for creditors to bring fraudulent transfer claims: four years after transfer (or one year after discovery) for pre-transfer creditors, and two years after transfer (or six months after discovery) for post-transfer creditors, with six-month deadline for known creditors receiving notice.

Limits creditor recourse to the trust and trustee only, prohibiting claims against advisors involved in drafting, preparing, or funding the trust, unless the creditor can prove clear and convincing evidence of fraudulent conveyance or insolvency.