How Does a Trust Work in Arizona?
For individuals looking to care for their loved ones and prepare for the future, setting up a trust is a common request. As experienced estate planning attorneys, one of the most common trust-related questions we hear is, “How does a trust work in Arizona?”
If you’re wondering how a trust works, our legal experts are answering that very question today. Keep reading to learn what a trust is, how to set one up, and what your next steps should be. Be sure to consult with a licensed estate planning attorney if you’re ready to begin the process of setting up a trust in Arizona.
What is a Trust?
A trust is a contractual agreement that allows a third party (the trustee) to hold assets for the beneficiaries of the owner of the trust (the settlor). In Arizona, many people choose to set up trusts to control how and when their assets are used, avoid probate, and protect their legacy. It’s important to be aware of the different types of trusts available to you so you can decide which one, if any, is right for your unique situation.
Revocable vs. Irrevocable Trust
While there are many types of trusts you can choose from in Arizona, the two main categories to be aware of are revocable and irrevocable trusts. A revocable trust, or living trust, is a trust that allows you to maintain control of your assets during your lifetime. This type of trust can be dissolved or changed at any time.
An irrevocable trust, on the other hand, cannot be changed after it has been executed. Once you establish the trust, you lose access to the assets named in it and cannot go back and alter the terms. This is typically the preferred choice for those looking to minimize their estate taxes and tax liability on the income generated by the assets.
How to Set Up a Trust in Arizona
Before you make a decision on which type of trust to set up, you should consult with an experienced estate planning attorney who can help you weigh your options. Working with an estate planning attorney and not a general practice attorney means that your attorney will have gone through the process many times over with other clients. They will be able to provide insight on which trust option might make the most sense for you.
In Arizona, your trust must abide by the following basic requirements:
You must have a Grantor who manifests the intent to create a trust
There must be a Trustee with duties to perform
There must be designated Beneficiaries
The Sole Trustee cannot be the Sole Beneficiary
The process of creating a trust is complex and can easily become overwhelming for someone who has never been through it before. Working with an experienced Arizona estate planning attorney ensures that your needs will be cared for and everything will be done by the book. The last thing you want to worry about is surprises down the road.
Top-Rated Phoenix Estate Planning Attorneys
Are you looking to set up a trust in Arizona? Allow our team of experts to guide you through the process. As a trusted estate planning law firm serving Arizona and Southern California, Rilus Law will help you review your options to determine the best fit for your needs.
With our Arizona estate planning attorneys by your side, you can rest assured that your trust will be set up exactly according to your wishes. Browse our practice areas page to learn more about what we can do for you, or contact our team for a free consultation.