A Living Trust, also known as an “inter-vivos” trust, is effectively a contractual arrangement made by a Trustor (the person executing and funding the Trust) during his lifetime, under which one person, called the Trustee, holds legal title to property for the benefit of another person, called the beneficiary.
Living Trusts in Arizona are regulated by Title 14, Chapter 11 of Arizona’s Revised Statutes, A.R.S. § 10-101 et seq. A Living Trust is a complicated legal document for which you’d be wise to seek the help of an experienced Estate Planning attorney. The attorneys at Giordano Spanier & Heckele, PLLC can help you draft a legal, enforceable Living Trust at a competitive rate.
Why Should I Make a Living Trust?
In the eyes of the Trustor the main advantage to making a Living Trust is that property left through the trust doesn’t have to go through probate court. Probate is the court-supervised process of paying your debts and distributing your property to the people who inherit it. Probate can drag on for months before the inheritors get anything. By the time the probate process is finished, many estates realize that about 5% (on average) of the decedent’s estate/property has been eaten up by lawyer and court fees.
Additionally, there may be certain tax benefits to creating a Trust, and a Trustor may include a Spendthrift provision to protect the beneficiaries (and Trust assets) from creditors.
Other Benefits of a Living Trust
Living Trusts are typically revocable during the Trustor’s lifetime. In other words, if, during the Trsutor’s life, he wished to make changes to the terms of his Living Trust agreement, he may do so. The moment a Trustor dies, however, the terms of the Trust are irrevocable and may not be changed except in extreme or unique circumstances.
Upon the death of the Trustor, his property (real and personal) passed to the Trust beneficiaries in accordance with the terms of the Trust agreement. Such disposition can be immediate or over time through the creation of a sub trust. Many people have minor children or children that are not good with money or who have creditors – in such instances the creation of a sub trust in which the decedent Trustor’s assets pass to the child over time may be a good idea. A Trustor can even leave a beneficiary property conditioned upon the occurrence of a certain event. For example, a Trustor may leave his daughter a sum of money to be distributed only upon receiving her Bachelor’s degree.
What Assets Can I put in a Living Trust?
A Living Trust is like a vehicle. An estate planning attorney can build the car for you, but, ultimately, it is up to the Trustor to put “passengers” into the car. “Passengers” are the Trustor’s property, both real and personal. Real property is pretty straightforward – real estate. Personal property can be many things, including life insurance policies, cars, bank accounts, retirement plans, jewelry, etc. Some personal property should go into the Trust (i.e., title held in the name of the Trust), while other property should not.
Different kinds of Living Trusts can help you avoid probate, reduce estate taxes, or set up long-term property management. For details on creating a Living Trust contact the attorneys at Giordano Spanier & Heckele, PLLC at (520) 433-9031 or firstname.lastname@example.org. Mention this article for a FREE CONSULTATION on your estate planning needs.