How a Trust Works in Arizona
No matter your age, it’s never too early to plan for the future. Estate planning can involve many different factors for different people. For some, the process involves establishing a Trust. If you’re not sure what exactly that is or how it works, you have come to the right place.
Our estate planning attorneys have helped hundreds of people create different types of Trusts, and we’d love to do the same for you. Today’s blog post will provide you with a brief overview of how a Trust works in Arizona. Feel free to get in touch with our team if you still have questions after reading this. Without further ado, let’s dive in.
What is a Trust?
A Trust is a fiduciary arrangement that allows you to designate a third party (the trustee) to hold assets on behalf of beneficiaries. Not only does it give you (the trustor) control over the distribution of your assets, but also it can help you avoid the cumbersome probate process.
Different Types of Arizona Trusts
Trusts are an essential part of the estate planning process for many Arizona asset owners. However, they are not one-size-fits-all. Estate planning involves many different kinds of Trusts, all with various specialties and criteria. Below are the most common:
Marital “A” Trust – These Trusts benefit a surviving spouse and are not tax-exempt.
Bypass “B” Trust – Also known as a Credit Shelter Trust, this helps families minimize their tax liability.
Testamentary – These Trusts are outlined in a Will and established once the trustee has passed.
Irrevocable Life Insurance – This life insurance Trust allows you to avoid estate taxes on your policy benefit, as well as provide instructions on how and when your death benefit can be used.
Generation-skipping – As the name suggests, this allows assets to be passed directly to grandchildren, as opposed to the trustor’s children.
Because there are many different kinds of Trusts, it can be tough to determine the right option for you. That’s where a skilled estate planning attorney comes in. Contact our office to book a consultation to learn more about which Trust best suits your needs.
Irrevocable vs. Revocable Trusts
Wondering how a Trust works in Arizona? Among other things, that depends on its revocability. Revocable Trusts can be controlled and amended throughout one’s lifetime. This means the trustor can add, change, or even dissolve the Trust if they wish.
On the other hand, irrevocable Trusts are not flexible. They transfer assets from a trustor’s estate into a Trust where they are shielded from taxation and probate. However, once the Trust is created and funded, it cannot be changed.
Most estates are deemed “revocable” because the trustors are living and will likely need to access their assets. But when they eventually pass away, the Trust will then become irrevocable. This prevents any unwanted changes from being made.
Are you serving as the successor trustee for a loved one?
Download our Free Trustee Toolkit to guide you every step of the way! It includes a checklist, successor trustee acceptance form, trust inventory spreadsheet, trust distribution schedule spreadsheet, and video walkthroughs with our guidance and support delivered right to your inbox.
Call an Estate Planning Lawyer in Phoenix, AZ
We hope that today’s blog post sheds some light on how a Trust works in Arizona. But if you still have questions, our estate planning attorneys would be glad to walk you through the process.
Rilus Law is one of the top estate administration and probate law firms across Arizona and California. Whether you’re looking to create an estate plan from scratch or have questions about establishing a Trust, our team is here to help.
Contact our team to schedule your free personal family legal session today.