Living trusts allow people to set aside money for future needs without having to worry about probate court proceedings. There are 6 benefits to having a living trust in Arizona. Keep reading to discover what they are.
Why Do People Set Up Living Trusts?
A living trust allows people to manage their money and property when they are alive. If they get laid up in the hospital or get dementia (for example), someone else can step in to manage things. And if they die, there is no need for probate.
The Benefits of Setting Up a Living Trust
Here are 6 benefits to setting up a living trust in AZ:
It Avoids Probate.
A properly drafted, properly funded trust makes it easier to transfer assets to children without having to worry about probate court proceedings.
To make sure your trust is properly drafted, consult with an estate planning attorney. (We would love to be your attorney!) Funding the trust means that assets are transferred to the trustee of the trust.
It May Save Money.
On average, setting up a living trust in AZ costs approximately one-half of the cost of a probate. With a living trust, your loved ones can most likely avoid probate.
It Protects Your Privacy.
A living trust protects your privacy in case you become incapacitated later in life. When you die, they protect your loved ones’ privacy. The management of your assets won’t be made public in Arizona probate court.
It Assists in the Event of Incapacitation.
What does ‘incapacitation’ mean? It means not being able to manage your finances. Britney Spears was a recent example of someone who got caught up in the court system because she needed help managing her financial affairs.
Britney could have avoided all of that by simply having a living trust (and having a general power of attorney as a backup). Can you imagine? She spent millions and millions of dollars on legal fees. Her ordeal was public. And she had an extremely difficult time terminating the conservatorship. And it all could have been avoided with a living trust!
It Provides Certainty and Peace of Mind.
A living trust in Arizona gives you more certainty. You’ll know that you will be taken care of if you become incapacitated. And if you pass away, you will have the certainty of knowing who will get your assets when you pass away. A living trust helps ensure that your assets go to those who you choose rather than the persons spelled out in the Arizona statutes. If you don’t have close relatives, it avoids your assets going to the state.
You get peace of mind of knowing that your affairs are in order and your loved ones won’t be left a mess to figure out.
It gives you more control over how your money is spent after you die.
Without a trust, your heirs simply get their share of your assets when you die. It just gets dumped in their laps. There’s nothing stopping them from quickly spending their money. (Our law firm is called Sudden Wealth Protection Law because we want to help you avoid this. We don’t want your heirs to receive “sudden wealth” in the form of a lump sum inheritance … without protecting them from squandering the money.)
What Are the Types of Living Trusts?
There are two main types of living trusts: revocable and irrevocable. A revocable living trust allows you to make changes to its terms at any time. An irrevocable living trust cannot be changed once established. (There are exceptions to this, which we can discuss if you’re interested.)
Who Can Serve as a Trustee?
If you set up a revocable living trust (the most common type), you probably name yourself as the trustee. You also name successor trustees to step in if you become incapacitated or pass away. The successor trustee(s) can be a living person, a professional (such as a lawyer or CPA), or a trust company. Really anyone can serve as trustee. It’s up to you. The key question is whether you trust them.
If you decide to set up an irrevocable living trust, you will need to appoint a trustee who will manage the assets held in the trust. This trustee can be a living person or a trust company.
When Does a Living Trust End?
A living trust ends when the last surviving beneficiary dies. However, if there are no beneficiaries at the time of death, the trust continues until a court determines who the beneficiaries should be. Then after the trust is distributed out, the trust ends.
Want More Information About Setting Up a Living Trust in Arizona?
Let’s talk about your particular situation. If you would like to talk about setting up a trust for yourself or a loved one, please call our office at 602-443-4888 and we will be happy to schedule an appointment.