An Arizona Living Trust is a legal document that a person creates during his or her lifetime. The owner retains control over how the money is spent.
Why Do You Need An Arizona Living Trust?
If you own real property, such as a house, you might need to set up a trust. This is because state law requires that certain assets must go through probate court before being distributed to heirs.
If you own real property in other states, it is even more important to set up a trust. Otherwise, your loved ones may need to open probates in each state where the real estate is located.
If you own a business, you should have a trust. Otherwise, if you die, your business could be in limbo for a period of time. And if you become incapacitated, it’s hard for someone to manage a business using a power of attorney. It would be much better for your trust to own your business. Then if you die or become incapacitated, someone can just step in and continue running things.
Types Of Trusts
There are two main types of trusts: irrevocable and revocable. An irrevocable trust cannot be changed once established, with some exceptions. Revocable trusts allow you to make changes at any time.
A ‘living trust’ refers to a trust that you set up during your lifetime. The most common type of trust is a revocable living trust. In other words, you set it up while you are alive, and you can change it at any time.
How To Create An Arizona Living Trust
If you decide to set up an Arizona living trust, you will need to complete several forms. The main form is the trust agreement. If you are creating a revocable living trust, only you need to sign. You should also consult with a lawyer before setting up a trust.
How To Transfer Assets Into The Trust
Once you have completed the paperwork, you can start transferring your assets into the trust. This process usually takes between two to four weeks. To transfer real property, you sign and record a deed. Transferring accounts requires following the procedures of the financial institution.
How To Manage The Trust And Beneficiaries
You will need to appoint trustees to manage the trust. These trustees must be trustworthy individuals who will act fairly and honestly with respect to the trust and its beneficiaries. They should also be able to handle legal matters related to the trust.
If you are creating a revocable living trust, then you are most likely the initial trustee. You can name successor trustees for when you pass away. The successor trustee can take over in case you can no longer manage things at some point in the future.
As for beneficiaries, a trust has the advantage of providing how your beneficiaries receive their inheritance. For example, if you have young children, you probably don’t want them getting a fat check when they turn 18. Instead, you can provide a time for their needs if you were to die. Then the trust can distribute to them later when they are more prepared to manage money.