Benefits of Creating a Revocable Living Trust in AZ

Many people incorporate revocable living trusts into their estate plans. The benefits of a revocable living trust make it a popular estate planning tool. These benefits include maintaining privacy in individual or family wealth, facilitating easier asset management, and passing property to loved ones and beneficiaries after death without the need for probate.

Contact Pennington Law, PLLC today to learn more about the advantages of establishing a revocable living trust and get help creating one from an experienced estate planning attorney.

What Is a Revocable Living Trust?

A revocable living trust is a type of trust that a person creates during their life. The revocable nature of the trust means that the person who made the trust, called the grantor, can amend or revoke it or remove assets from the trust during their life, subject to any limitations in the trust document or state law.

In a revocable living trust, a party called a trustee manages assets placed into the trust by its creator on behalf of one or more beneficiaries. The trustee must manage the trust assets and distribute income and principal from these assets to beneficiaries as directed by the trust document or as permitted by the discretion afforded to the trustee under the trust document.

A person who creates a revocable living trust in Arizona may name themselves as a trustee and keep complete control over the assets they place in the trust. The person can name a successor trustee to take over after their death and can direct that the trust either continue as an irrevocable trust or terminate upon their death, instructing the trustee to distribute its assets to the beneficiaries.

Benefits of a Revocable Living Trust in Arizona

There are numerous benefits to using revocable trusts, including:

• Avoiding Probate – Probate avoidance is one of the most considerable benefits of using revocable trusts. Probate is a court-supervised process. Probate proceedings often increase the cost to administer the estate. People frequently use revocable living trusts to bypass probate and provide inheritances to loved ones. Distributing property from your estate after your death will require your family to file for probate. However, a revocable living trust can direct inheritances to your loved ones after your passing, allowing your family member to receive their inheritances more quickly and eliminating much of the financial expense of probate.
• Keeping Your Finances Private – Preserving privacy is another significant advantage of using living trusts. By avoiding the court-supervised public process of probate, revocable living trusts also help keep your financial circumstances out of the public record. You can use a revocable living trust to prevent others from discovering the extent of your wealth because trusts are managed privately. You can also keep your estate planning goals through a revocable living trust private, as creditors or other parties will not know who stands to inherit from you through the trust or how much money they will receive.
• Separating Assets – Individuals can use revocable living trusts to keep specific assets separate from other assets. For example, a married couple may place their separate property into a revocable living trust to avoid commingling it with the marital estate.
• Retaining Greater Control Over Your Wealth– Unlike with an irrevocable living trust, you can freely make changes to your revocable trust. This allows you to manage assets and maintain control over the assets held in the trust as long as you are alive and competent.
• Avoiding Legal Challenges to Your Estate Plan – A revocable living trust can reduce the risks of family members or beneficiaries launching legal challenges to the validity or enforceability of your estate plan if the trust document includes provisions that disinherit any beneficiary who initiates legal proceedings to challenge the trust.

A knowledgeable attorney can discuss the several advantages that revocable living trusts offer and how they can benefit your particular situation. For example, you may wish to use a trust to hold property for minor children. Contact us today for a free consultation with an experienced attorney.

Creating a Revocable Living Trust in Arizona

Under Arizona law, a person may create a revocable living trust if they have the legal and mental capacity to do so and clearly indicate their intention to make the trust. A revocable living trust usually needs at least one identified beneficiary. Furthermore, the trust must assign duties to the trustee to perform. Finally, a revocable living trust cannot have the same person serve as both the sole trustee and the sole beneficiary.

A person can create a revocable living trust by drafting and executing a trust document. The trust document must state the person’s intent to create the revocable living trust, appoint a party to serve as the trustee, outline the trustee’s duties and powers, and designate one or more beneficiaries of the trust. A revocable living trust may also set a specific date or event for termination, such as the death of the person who created the trust, and direct the distribution of the trust’s assets to beneficiaries.

Arizona Revocable Trust Laws

Arizona’s revocable trust laws permit a settlor (the person who created the trust) to amend or revoke the trust, subject to any limitations established in the trust document, unless the trust document expressly designates the trust as irrevocable. A settlor may amend or revoke a trust by substantially complying with a method for amendment or revocation outlined in the trust document, or if the trust document contains no such method, then by any writing signed by the settlor that manifests their clear intent to amend or revoke the trust. Following the revocation of a revocable trust, the trustee must deliver the trust’s assets as directed by the settlor.

Furthermore, Arizona law states that while a trust remains revocable by the settlor, the beneficiaries’ rights remain subject to the settlor’s control, and the trustee owes their duties exclusively to the settlor.

A person may file a legal action to contest the validity of a trust that remained revocable at the settlor’s death within one year after the settlor’s death or four months after the trustee sends the person a copy of the trust document and notice informing them of the trust’s existence and the trustee’s name and address, whichever occurs first. Upon the settlor’s death, the trustee may distribute the trust’s assets per the terms of the trust unless the trustee has actual knowledge of a legal proceeding contesting the trust’s validity or has received notice of a potential legal action, and the person files that action within 60 days of notifying the trustee. Any beneficiary of an invalidated revocable trust becomes liable to return any distribution, except to the extent that the beneficiary qualifies as a bona fide purchaser for value.

How Much Does a Living Trust Cost in Arizona?

Creating a living trust can be a time-consuming process. Many estate planning attorneys charge by the hour, so the more complex the trust document, the more it may cost. The cost can vary depending on various factors, including the lawyer’s fee arrangement (hourly, fixed, etc.), the complexity of the trust document, and the particular attorney.

Most people hire legal counsel to assist them in creating a trust document. A lawyer can also ensure a smooth transfer by preparing deeds and other documents to transfer assets to the trust.

A revocable living trust may have additional ongoing expenses if you appoint a professional trustee to manage the trust.

Talk to Our Arizona Living Trust Attorneys Today

During the estate planning process, talk to an experienced estate planning lawyer to discuss the benefits of incorporating a revocable living trust in Arizona into your estate plan. Contact Pennington Law, PLLC, today for an initial consultation with our living trust attorneys to learn more about how revocable living trusts can add to the advantages of estate planning.