An AZ Living Trust is an important part of estate planning. It lets you avoid probate court proceedings if you die or become incapacitated. It’s a way of managing your money and property during your lifetime. It then transfers your assets to your beneficiaries when you die.
What Are AZ Living Trusts?
A living trust is a legal document that you create during your lifetime. It manages your assets in case you can’t manage your finances anymore. For example, you could get in a car accident and have a brain injury. Or you could get dementia or Alzheimer’s Disease. Without an AZ living trust, you may end up having your assets managed through the probate court in a conservatorship. That’s expensive, time-consuming, and public.
It then transfers assets to your beneficiaries after your death. This avoids probate court proceedings. It also ensures that the assets pass directly to the people who will benefit from them.
The great thing about an AZ living trust is they are typically also revocable. That means it’s completely flexible during your lifetime. You can change who gets what percentage when you die. You can change trustees. And you can change anything about it.
For example, maybe you have three kids, and at first you think they should all get an equal amount. But then you reconsider. Your one child is a professional and making great money. Your other child works for a charitable organization saving the world. You decide to give more to your child who is working for charity and less to the child who doesn’t need the money. It’s an easy change with an AZ living trust.
Or maybe you choose one of your parents to be trustee if something happens to you. But then as your parent gets older, you decide to name your brother. Again … it’s an easy change. Just a two or three page Trust Amendment.
Why Should You Create an AZ Living Trust?
If you own property in Arizona, you should consider creating an AZ Living Trust. There are several reasons why you might choose to do so. First, it can allow your loved ones to avoid probate court proceedings if you die. Second, it can provide flexibility with regard to how your assets get distributed upon your death. Third, it can reduce taxes. And finally, it can help protect your loved one’s inheritance from their creditors.
If you own real property, it really makes sense to have an Arizona living trust. This type of trust lets you maintain control over your home. And when you can no longer manage your affairs, someone else can step in and take over for you.
If you own a business, it’s important to have a trust. Otherwise, if you die or become incapacitated your business could be in limbo for months with no one having the authority to manage it.
How Do I Set up an AZ Living Trust?
To set up an AZ Living Trust, you will need to get a trust agreement. That requires that you make the following decisions:
1. Pick a Successor Trustee.
Your trustee is the person who will protect and manage your assets after you can no longer be in charge. You need to be able to “trust” the person. (Sorry about the pun.) The person should be responsible and be good with money.
2. Choose Your Beneficiaries.
If you’re married, your spouse is probably one of the beneficiaries. Then maybe your children are next in line. If you don’t have children, then should it be relatives or a charitable organization or friends. These are just examples. You can pick whoever you want to be your trust beneficiaries.
This part of the planning process can be fun. You are figuring out what kind of legacy you are going to leave behind.
3. Choose How Your Beneficiaries Should Receive Their Inheritance.
Do you want your kids to get everything in a lump sum? (Keep in mind that most people who get a financial windfall end up spending it quickly.) Or should you dole out the money in increments. That way, they can gradually get more prepared to handle their money. Your estate plan attorney can help you with these decisions.
Once you sign the trust document, you can begin transferring assets into the trust. That’s a crucial step. And again, your estate plan attorney help you with this. (We would love to help you with this whole process.)
Learn more about this trust option.
Every family situation is different, and yours may have unique needs. You should find the right trust structure that meets your needs. For more information about trusts and other estate planning topics, reach out to us using our convenient contact form. Or just give us a call at 602-443-4888. We have knowledgeable probate and estate planning lawyers available to answer all of your questions and help you start your planning today.