A Living Trust is a document that provides for the management of your assets during your lifetime and the orderly distribution of those assets upon death. When properly funded, a Living Trust will permit an estate to avoid or bypass the court process probate. Probate can typically take a year or more and the costs, expenses and fees can be thousands of dollars. The probate limit in Arizona is $100,000 for real estate assets and $75,000 for personal property.
During the lifetime of the owner, usually called a “Trustor”, maintains full control of all of the assets of the trust just as they did before the trust was created. The manager of the trust is a “Trustee” and the Trustor typically names himself or herself as the initial Trustee of the trust. Assets can be removed from or added to the trust at any time without amending or changing the trust. Trusts can be easily amended to address life changes such as adding or deleting beneficiaries, changing the age or ages that minors inherit assets and removing or adding successor trustees. The trust can even be revoked if the Trustor no longer desires to have the trust.
There are no annual fees or other expenses to maintain a trust unless the Trustor desires to make changes. There is no need to file a separate tax return for the trust since it is fully owned and controlled by the Trustor.
For married couples creating a trust together, there is no need to make changes in the trust upon the death of the first spouse. Typically, the surviving spouse maintains the trust as the trustee.
Trusts are the ideal document for avoiding probate, maintaining assets to be distributed to minors, holding funds in trust for beneficiaries to be distributed at a later date, protecting assets for beneficiaries and minimizing or eliminating estate taxes for married couples with assets in excess of the federal estate limit. A Living Trust is a confidential document that keeps all your personal affairs from becoming a matter of public record.