Securing Your Future: Your Essential Guide to Setting Up a Living Trust in Arizona

Setting up a living trust can be beneficial if you reside in Arizona and want to be proactive in estate planning. This guide provides information to establish Arizona living trust, safeguard your assets, and simplify matters for your family after your passing.

Whether you are formulating a trust or developing a financial plan, a financial advisor can assist you in creating an estate plan to protect your family's wealth.

Process of Creating a living trust in Arizona estate planning

1. Choose the type of trust: Opt for a single trust document if you are single. If you are married, you and your spouse can each create individual trusts or opt for a joint trust document. A mutual trust allows you and your partner to include common properties like cars and real estate.
2. Take inventory of your personal property: Determine which assets you wish to include in the living trust, ranging from stocks and mutual funds to family heirlooms and personal possessions. Collect all relevant documentation, such as homeownership records, stock certificates, and vehicle titles.
3. Select a trustee: If you choose to be the successor trustee, ensure you appoint a successor trustee. He will assume control of the trust after your passing. This is also the appropriate time to decide on the beneficiaries who will inherit your property. The trustee distributes the assets.
4. Create the trust document: You can create a living trust using online services or seek guidance from an estate planning attorney throughout the process.
5. Notarize the document: Sign the document in the presence of a notary public.
6. Fund the trust: Transfer the designated property into the trust, which entails completing the necessary paperwork. Hiring an attorney is recommended for this step to mitigate the risks associated with DIY estate planning.

What Is a Living Trust?

A living trust is a legal document granting asset ownership to beneficiaries. It becomes effective during your lifetime and remains in effect after your death. You can name yourself the trustee or give that power to someone else.

Types of living trusts exist.

An irrevocable living trust is permanent, meaning the grantor cannot remove any assets from the trust without obtaining permission from all parties mentioned in the trust. The grantor no longer retains ownership of assets placed within the faith; the faith, not the grantor, pays estate taxes.

In contrast, a revocable living trust provides greater flexibility than an irrevocable one. The grantor can modify the trust as desired, maintains ownership of the trust assets, and pays estate tax accordingly.

Cost of Creating a Living Trust in Arizona The cost of establishing a living trust in Arizona depends on your chosen method. If you opt for a DIY approach, the price will vary based on the online service you select, potentially ranging from under $100 to around $300.

Engaging an attorney to assist in creating the trust will involve attorney fees determining the total cost. Costs can exceed $1,000, so discussing fee rates with the attorney before proceeding is advisable. When selecting a lawyer, prioritize someone specializing in trust creation rather than merely working with estates. The State Bar of Arizona website can provide a list of qualified lawyers.

What are the Advantages of a Living Trust?

A living trust offers several benefits that make it an attractive option. Firstly, it provides the opportunity to avoid probate process fees. When a valid living trust is in place, probate courts are not required to intervene. This means that assets held within the trust are not subject to the settlement process overseen by the probate court, thereby avoiding associated fees that would otherwise be deducted from the estate's value.

Another significant advantage of a living trust in Arizona is its federal estate tax impact. By transferring ownership of assets into the trust, they are no longer considered part of your estate during estate tax season. It's important to note that even though you no longer technically own the assets, you can still utilize them to the fullest extent.

In the event of severe illness or incapacity, a living trust allows for a smooth transition of control to the designated trustee. This individual is granted the authority to manage the trust on your behalf, ensuring that assets are distributed according to your wishes. Not only does this streamline the settlement process, but it also maintains privacy by keeping your financial matters confidential and out of the public domain.

What is the cost of a living trust in Arizona?

The cost of a living trust in Arizona can vary from hundred to thousand dollars, depending on factors such as the complexity of the faith and the fees charged by the attorney involved. Setting up a living trust in Arizona costs around $1,500 on average. The price can vary depending on many things. Trusts established in major cities may be more expensive than those in rural areas, and more prominent beliefs tend to incur higher costs than smaller ones. Shopping around is recommended to find the most favorable price and compare attorney fees.

Is it possible to create a living will by yourself in Arizona?

Yes, making a living will on your own in Arizona is possible, but it is not advisable. A living will is a legally intricate document, and ensuring its accuracy and effectiveness is crucial. Additionally, establishing a trust can be more complex than creating a will, especially when designating legal authority to a trustee. It's essential to have everything properly drafted and legally binding. Therefore, professional assistance from an attorney is highly recommended to ensure that all aspects of the trust are comprehensive and legally sound.

Conclusion

Generally, individuals opt for a living trust to bypass the probate process for their heirs upon their death. Probate is a time-consuming legal procedure ensuring the distribution of assets aligns with the deceased's wishes. However, with a living trust, your estate planning attorney can avoid the probate process.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Please consult a qualified attorney for advice on your specific situation.