Trust Lawyer In Chandler AZ Ready To Take On Your Request
What Is a Living Trust?
The term living trust is the popular name for a trust set up when you’re alive. This is called an inter-vivos. With a living revocable trust, you can be the trustee of the assets and maintain control over the assets inside the trust. You can also dissolve the trust, if so desired. Assets in this type of trust are then part of the individual’s estate, though the use of such a trust can ensure that your assets pass on to your heirs upon your death outside of probate.
An irrevocable trust is one where you put assets in the trust and then give up control of them. The trustee is essentially the legal owner. The trustee could be a family member or a trust attorney. Or you could have a bank’s trust department manage it. Setting up an irrevocable trust will reduce the size of your estate. Furthermore, it allows you to transfer assets to your heirs without going through probate. Note that this doesn’t mean you can’t benefit from the assets in some way. Charitable remainder trusts may let you receive the income from your assets until death but the assets go to the charity upon your death. You can also set up a trust that will provide for a disabled loved one such as a special needs adult or spouse with dementia. The trust must be set up while you’re legally competent to do so, so don’t wait until you have a diagnosis of dementia or Alzheimer’s before you set up such a trust for yourself or your dependents.
What Types of Assets Can Go into a Trust?
You can put almost any asset inside of a trust, though it isn’t always worth it. For example, you might put your home inside of a trust so that it is shielded from creditors, but it isn’t worth it to title your car in the name of the trust. A living revocable trust may simplify transfer of an operational business to your heirs, though you need to work with a good Arizona attorney to set things up correctly.
When Might Assets Be Distributed Outside of the Trust?
If you don’t title the assets in the trust, they may not become part of the trust. For example, you have to name the trust as the beneficiary of your life insurance policies and IRA. Fail to do this, and the financial services firm will distribute the assets based on the named beneficiaries. Payable on death or POD bank accounts will pass on to the POD beneficiary, though they may be within the trust while you’re alive.
A living trust does not include accounts that are established upon death as part of a will and testament. You could in theory have a living revocable trust to ensure that your assets are managed in case of your disability that flows into a conventional trust upon your death. It is fairly common for a life insurance policy’s proceeds to be placed in a trust for the sake of minor heirs, though you may have had a living trust to manage your business.
What Are My Options When Creating a Trust?
We’ve already explained the difference between living revocable and living non-revocable trusts. If you’re single, you’ll create a single trust. If you are married, Arizona law allows you to create either a joint trust or two single trusts. A joint trust is necessary if you’re going to hold jointly held property like a family home.
Consult with an attorney familiar with living trusts, because Arizona’s Uniform Probate Code means probate isn’t the nightmare here it is in other states. For example, Arizona has a simplified probate process for estates with less than a hundred thousand dollars. However, that’s only an option if there are no liens or encumbrances. This means that reverse mortgage, primary mortgage or mechanic’s lien secured by your home will prevent your estate from qualifying for simplified probate. If you’re deeply in debt, talk to an Arizona estate planning expert to determine how you can pay off debt and transfer assets as you would like to happen. After all, you can’t give your heirs the house if you can’t pay off the mortgage against it.
Can’t I Just Give My Heirs My House?
Arizona allows you to transfer real property like cars and houses with a transfer-on-death deed. This means that you may not need a trust if your home is the only major asset in your estate. Talk to an attorney so that you understand the tax implications of this decision. You may want to set up a life insurance policy or set aside cash to help cover the inheritance taxes, if the property is sizable.
You do not want to try to sell your home to a family member for a fraction of its value while you’re alive. This will cause massive problems if you take advantage of Medicaid nursing home benefits. Furthermore, you lose legal control of the house if you sell it to them. If they go through a divorce, bankruptcy or lawsuit, “your” home is now on the chopping block. And if they die, the property is part of their estate.
What Do I Need to Do to Create a Trust in Arizona?
Create a list of all of your assets. It is much cheaper and easier to start with a list of all of your valuables, mutual funds, real estate and bank accounts and choose what you put in the trust than try to amend it later. You don’t want to have to create a second irrevocable trust because you forgot to include a vacation home. That’s a waste of time and money. Gather together all of the related paperwork. This includes the title to your home, stock certificates and car titles.
You’ll need to select a trustee. If you are setting up a living revocable trust, you can be the trustee, but you should designate at least one successor trustee. That is essential if there is income producing assets like rental real estate or a business. You want a successor trustee to oversee the distribution of assets upon your death, too. This could be your spouse, but it doesn’t have to be. Consider having two or three successor trustees, including an institution. If you name an Arizona law firm or bank trust division as the trustee, then you guarantee that someone competent will oversee the trust. Furthermore, naming a neutral third party like this can reduce family infighting over the distribution of assets.
Always work with an attorney when setting up a trust. Online templates may not be legal in the state of Arizona, because trust law is state specific.
Do I Need a Will, If I Have a Trust?
Yes. Every adult needs a will, whether or not you have a trust. Furthermore, the will provides a way to determine how property outside the trust will be distributed. Consult with an Arizona attorney to ensure that your trust and will work in tandem instead of conflicting with each other.
Keystone Law Firm
2701 W. Queen Creek Rd. #3
Chandler, AZ 85248
(480) 418-8448