Revocable Living Trusts
When it comes to estate planning, you have many different tools at your disposal to protect your assets and preserve your legacy. Depending on the size of your estate, tax considerations, and other factors, you could benefit from setting up a revocable living trust. To learn whether a revocable living trust might be a good solution for you, talk to the Arizona estate planning lawyers at Brown & Hobkirk, PLLC today. For more than 20 years, we’ve been helping Arizona residents navigate the estate planning process and develop the right strategies to fit their needs.
Our law firm offers free initial consultations so you can speak directly with an attorney and get answers to your questions. Call one of our four offices throughout Arizona or fill out our online contact form today to get started.
What Is a Living Trust?
A trust is a legal instrument that allows a third party to manage someone’s assets on behalf of the beneficiaries of an estate. Trusts are created by the grantor or trustor. The person who administers the trust is known as the trustee, and the person or people to whom the trustee distributes the assets are known as beneficiaries.
A living trust, also known as a revocable trust, is one of the more flexible kinds of trusts because assets can be transferred to or removed from the trust for as long as the grantor of the trust is alive. As a grantor of the trust, you can also name yourself as the trustee, allowing you to continue to control your assets. You would also name a successor trustee to manage the trust after your death.
The opposite of a living or revocable trust is an irrevocable trust. Assets cannot be removed from an irrevocable trust once the title to the assets has been transferred. Many living trusts become irrevocable trusts once the grantor has died.
The Benefits of an Arizona Revocable Living Trust
There are two primary advantages to establishing a revocable living trust under Arizona law:
The first is that a trust can make things easier on your family when you die. Assets in a trust do not have to go through the probate process. This can save your family a lot of stress and money when it comes time to settle your estate.
The other big advantage of setting up a revocable living trust is that it gives you more options for what to do with your estate once you’ve passed on. You can use a trust to control how your assets will be distributed to your family (ensuring beneficial expenses such as health, education, maintenance and support are covered), give to charitable causes of your choice, or allocate your assets in some other way. Your options are much more limited if you solely rely on a will or don’t take the time to do proper estate planning.
How Does a Revocable Living Trust Work?
Once an individual decides to create a revocable living trust, they will need to transfer ownership of any assets they want to include in the trust. This includes things like real estate, vehicles, stocks and bonds, life insurance policies, bank accounts, and business interests (such as limited liability companies). These assets can also be removed from the trust for as long as the grantor of the trust is alive.
The grantor also needs to name a trustee to manage the trust. In a revocable living trust, the grantor is typically also the trustee until death. After death, a designated successor trustee is responsible for distributing any assets in the trust to the grantor’s beneficiaries according to the terms outlined in the trust.
Is a Revocable Living Trust Right for Me?
Revocable trusts have many advantages compared to other types of trusts, but they’re not necessarily the best fit for everyone. Revocable trusts offer flexibility and allow your property and assets to remain available to you for your benefit during your lifetime. However, you should speak with a knowledgeable Arizona estate planning attorney to determine whether a revocable living trust will meet your needs.
Common Misconceptions About Revocable Living Trusts
There are a few common myths to be aware of if you’re considering establishing a living trust for the assets in your estate. First, there are some companies that sell living trust “kits” that you can use to establish a trust on your own. We strongly recommend you speak to an experienced estate planning attorney if you want to set up a trust, as the rules surrounding trusts can be quite complicated, and a mistake could have serious ramifications for you and your family.
Second, many people think that once you place assets in a trust, you lose control over that asset. This is true for some types of trusts, but not revocable living trusts. With a revocable living trust, the creator of the trust maintains full control over the assets in the trust until he or she dies.
Finally, some married couples may wonder if they need multiple trusts to protect their shared assets. While there are some special circumstances, a shared trust generally works for most couples, as both spouses can share ownership and control of the trust until one spouse dies. If you have questions about what type of trust is best for your situation, consult with a knowledgeable Arizona estate planning lawyer.
Talk with a Lawyer About a Revocable Living Trust
The Arizona estate planning attorneys at Brown & Hobkirk, PLLC have the knowledge and experience to help you navigate the process of creating a trust with ease. Get a free initial consultation today by giving us a call or reaching out online.