ARIZONA TRUSTS ATTORNEY
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Arizona Trust Attorneys
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You may already have created your last will and testament, but a comprehensive estate plan in Arizona includes far more legal instruments. And contrary to popular belief, you don’t need to be rich to use trusts to transfer your money and assets to your loved ones. Trusts offer several benefits that can be useful to people of all financial means.
In order to take advantage of these benefits, your trusts must be executed clearly and in compliance with Arizona law. Mistakes could backfire against your original goals, leading to delays and extra costs for your loved ones after your death. Our Arizona legal team is seasoned in matters concerning wills, trusts, probate, and other aspects of estate planning. To learn more about utilizing trusts in your Arizona estate plan, call 480-833-8000 for your free consultation.
What a Trust Can Do for Your Estate Plan
Setting up a trust isn’t simple, so you may be wondering why exactly you should be motivated to do so. The main purpose of a trust is to transfer assets to beneficiaries, but there are many reasons that doing so through a trust can be more advantageous than using a will and other methods.
Assets transferred through a trust don’t need to go through probate.
Probate is a matter of public record, so trusts can protect the privacy of both the grantor and the beneficiaries.
This can result in a faster transfer to your loved ones, as probate often takes upwards of 6 months to complete.
This can reduce the amount your family members will spend on probate attorney’s fees and other miscellaneous probate-related costs.
Assets in irrevocable trusts are protected from your creditors.
You can specify exactly what you want the assets in your trusts to be used for, or what conditions must be met before the trust can be transferred to the beneficiaries.
Avoid certain taxes that would be applicable with other methods of transfer.
Provide for the care of a child or pet after your death, or contribute to a charitable organization.
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Trusts VS. Wills
While both a will and trust can be used to pass down assets to your loved ones after you pass away, they operate entirely differently, and offer different additional functions. If you create a will, you can still create a trust to supplement it, and vice versa. An Arizona estate planning lawyer fully understands how trusts and wills interact, and can make sure that these two parts of your estate plan don’t conflict.
Your will, also known as your last will and testament, goes into effect when you pass away. A will can always be revoked, or amended through codicils, while you have the requisite legal capacity. Estates transferred through a will must go through probate, unless it meets its state requirements for a small estate affidavit. A will isn’t just used to transfer an estate upon someone’s death. A will is also used to name your executor, or the person who files your will with the court and helps guide your estate through probate until it can be distributed to your beneficiaries. Another important function a will serves is naming a legal guardian for your children if you pass away while they are still under the age of 18.
A trust can either be used to transfer assets when you pass away or while you are still living. Some wills can be revoked, or canceled, while others are irrevocable. Assets in trusts don’t go through probate. Rather than an executor, you will assign a trustee for your trust. The trustee, who can sometimes be yourself, will maintain the trust until the conditions for its transfer are met. Unlike a will, a trust allows you to set strict guidelines about the use of your contributions to the trust.
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At My Arizona Lawyers, PLLC, our Arizona Will Attorneys and AZ Estate Planning Lawyers understand that you have worked hard for your property and assets. Regardless of how big or small your estate, it is important to you and your family and should be protected. You deserve effective Estate Planning solutions. Therefore, contact our Arizona Will Attorneys for personalized support and guidance on all aspects of estate planning. From creating a will to probate needs, our experienced AZ Estate Planning Attorneys provide affordable and effective solutions.
TYPES of TRUSTS in ARIZONA ESTATE PLANNING
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REVOCABLE LIVING TRUSTS
As the name suggests, this type of living trust can be changed or canceled as you see fit. Revocable living trusts are also often called inter vivos trusts. This type of trust offers flexibility for the testator, along with other benefits. Assets passed through trusts don’t need to go through probate, which helps avoid delays and disputes, as well as protect everyone’s privacy.
Trusts can also reduce how much of your estate is reduced due to taxes. You can be the trustee of your own revocable trust, but not of an irrevocable trust. But revocable trusts don’t offer protection from your creditors like irrevocable trusts. To learn more about which type of trust is right for you, call to schedule your free consultation at 480-833-8000.
IRREVOCABLE LIVING TRUSTS
Irrevocable trusts are permanent, and can’t be amended or canceled once you’ve created one. You also can’t be the trustee of your own irrevocable living trust. Once an asset is contributed to an irrevocable trust, the testator won’t have control or access to that asset for the rest of their lifetime. Irrevocable trusts can help avoid several types of tax liability for the estate. They also protect any asset contributions from your creditors.
Because you can’t change your irrevocable trust once it’s executed, it needs to be done correctly. More than likely, you will need an estate planning attorney to help you create an irrevocable trust. Get the expert guidance you need with our Arizona estate planning team at 480-833-8000.
Revocable vs. Irrevocable Trusts
Which is Right for Me?
When it comes to trusts, one of the key decisions you will need to make is whether your trust should be revocable. A revocable trust can be changed or canceled, while an irrevocable trust cannot. But in exchange for sacrificing flexibility, irrevocable trusts offer protections for which your family could be thankful.
A revocable trust allows the grantor to decide who should get their assets, as well as amend the terms of the trust as time goes by and life changes. A revocable trust is also commonly referred to as a living trust or an inter vivos trust. The grantor maintains control over the contributions to the living trust, and can even name themselves the trustee. And when the grantor passes away, assets in a revocable trust will bypass probate and all of its associated drawbacks.
Once you create an irrevocable trust, you can’t take it back. Unlike a revocable trust, you can’t serve as the trustee of your own irrevocable trust. Just like you can’t touch assets in an irrevocable trust once created, your contributions will similarly be protected from your creditors. When utilized correctly, irrevocable trusts can also offer tax benefits that aren’t available with revocable trusts. Just like revocable trusts, irrevocable trusts don’t need to go through probate, protecting privacy, avoiding disputes, and more.
SPECIAL NEEDS TRUSTS
One of the benefits that trusts offer is that they allow you to specify how your contributions should be used, if desired. They can also offer benefits that wouldn’t be available through gifting and other forms of transfer. A perfect example of this is a special needs trust.
A special needs trust allows you to financially support a loved one with a physical or mental illness or disability. Support provided through a special needs trust won’t exclude the recipient from receiving public assistance benefits like Social Security, Supplemental Security Income, Medicaid, and Medicare. These forms of assistance can require that a person be under a certain income level to qualify, and other forms of transfer can disqualify the recipient from receiving aid.
You can set up a special needs trust to begin before you pass away. They are irrevocable trusts, so you will need to assign someone other than yourself as the trustee. This also means that funds contributed to a special needs trust can’t be seized by creditors, and are safe from lawsuits. You can also use a similar instrument called a supplemental needs trust to pay for any expenses not covered by social assistance. If you want to create a special needs trust for someone you love, contact our firm to speak with one of our estate planning professionals.
Another common expense many of our clients want to set aside money for is a family member’s education. Higher education is becoming increasingly necessary for careers in certain industries, and it is also becoming increasingly expensive. If you want at least some of your estate to be used for your children’s or grandchildren’s college, trade school, or other education, consider using an educational trust. This type of trust can either go into effect while you are still living, after you pass away, or after you pass away and your beneficiary begins accruing educational expenses.
One of the obvious benefits of an educational trust is that your beneficiary has to use it on education, instead of squandering it on something wasteful. An educational trust can be revocable, so you can name yourself the trustee of the educational trust until you pass away. You can also name more than one person as the beneficiary of an educational trust, and decide how you would like the funds to be split between them. Our experienced Arizona estate planning attorneys offer expert guidance in creating educational trusts at affordable rates.
Durable Power of Attorney
An estate plan is about more than dealing with your possessions after you pass away. Your estate plan can also come into play if you lose the mental capacity legally required to make certain types of important decisions. If you fall into a coma or suffer a traumatic brain injury, who is going to run your business? Pay your bills? Pay your taxes? Complete financial transactions you began while of sound mind? You can pick someone you trust to fulfill these responsibilities with a durable power of attorney.
A durable power of attorney is created while you are of sound mind, and can be revoked at any time that you are of sound mind. You can also choose exactly which types of decisions you would like your power of attorney, also known as an agent or representative, to make for you. You can grant your agent authority to complete a one-time transaction with a specific power of attorney, while a general durable power of attorney encompasses a broader range of transactions.
While you may trust someone with your business and financial affairs, there may be someone else whose judgment you trust more when it comes to medical treatments. For example, you may have one child who is an entrepreneur, and another who is a doctor. Here, you should consider using a health care power of attorney to assign decision making for your medical treatments if you ever lose the capacity to give your own informed consent. If you want to make these decisions for yourself in advance, or want to provide your health care power of attorney with detailed guidance on the decisions they make, you can also use an advanced medical directive, described below.
HIPAA, or the Health Insurance Portability and Accountability Act of 1996 was passed to create standards regarding disclosing a patient’s medical information without their knowledge or consent. If you assign someone as your health care power of attorney, you clearly will want them to have access to your medical records in order to make the most informed decisions for you as possible. You can achieve this with a HIPAA waiver.
Your medical information might also be useful for medical researchers. For a HIPAA waiver to be valid for this purpose, it must meet three requirements:
The disclosed health information must pose a minimum privacy risk to the disclosing party;
The researchers must make sure that the research could not occur without the disclosing party’s information, and;
The research can’t be conducted without the HIPAA waiver.
ADVANCED MEDICAL DIRECTIVES
While you can use a Health Care Power of Attorney to assign someone the responsibility of making your medical decisions if you can’t give informed consent, you can also let everyone know in advance just how you’d like those decisions to be made with an advanced medical directive. Let’s say that if you were ever in a coma, you wouldn’t want to be kept on life support. Or that you would like your organs to be donated. Or that you would prefer not to be resuscitated if your standard of living isn’t at a certain point. You can make your wishes on these types of issues clear with a living will.
Some of the wishes you can articulate in your living will include where you stand on:
Life support, artificial ventilation, tube feeding, etc.
Cardiopulmonary resuscitation, or CPR
Certain drugs and prescription medications
Organ and body donation
Being taken to the hospital
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Contact an experienced Arizona Estate Planning Attorney to handle your future estate legal matters. Our legal team will help you to schedule a free consultation with a lawyer who can answer questions and provide assistance and guidance in your specific estate planning case.
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The role of our Estate Planning law firm is to provide clients in Arizona seeking assistance withWills, Trusts, Probate, and Estate Planning. Our attorneys work with clients to assure that every aspect of an estate plan is not only legally sound, but that every aspect of your future is protected according to your wishes.
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Having a well-defined estate plan means working with an attorney who will provide the necessary legal documents involved in estate planning. These documents, for example, include a Last Will and Testament, a document granting Power of Attorney, and Advance Medical Directive, and a Revocable Living Trust.