Trusts

Trusts in Mesa, Arizona

Estate planning is a critical topic to consider when considering the best way to pass on property and assets following your death. With estate planning, you can prepare and arrange for the management of your estate before you pass away. This process is usually done as a way of establishing how assets and property will be dispersed upon a person’s death. However, it may also be done for other reasons, such as to minimize taxes, prevent probate, and easily transfer ownership and titles.

One of the most common tools used in estate planning are trusts.

What Is a Trust?

In its simplest form, a trust is an arrangement where one person, the “trustee,” is granted the title to another person’s property, called a beneficiary. There are many different ways in which trusts can be arranged with each way specifying when and how assets and property are to be transferred to the beneficiaries.

Trusts are useful in preventing probate which can be a long and complex process that involves going to court. Preventing your beneficiaries from having to go to court can also save them hundreds or even thousands of dollars in legal and court fees. With the use of trusts, beneficiaries can gain access to their inherited assets much faster.

What are the Types of Trusts in Arizona?

There are several different types of trusts that are used in Arizona, each with its own criteria. Some of the most commonly used trusts include:

  • Marital “A” Trust: This type of trust provides benefits to surviving spouses and is not tax-exempt.
  • Bypass “B” Trust: This is a credit shelter trust.
  • Testamentary: This trust is outlined in a will and created following a death.
  • Irrevocable Life Insurance: This type of trust excludes life insurance from the taxable estate.
  • Generation-Skipping: This trust allows assets to be passed onto grandchildren.

With so many different types of trusts, it can be difficult to know which one best fits your needs. By working with an experienced Mesa estate planning attorney, you can ensure that you choose the best type of trust to protect your estate.

Revocable vs. Irrevocable Trusts

There are multiple types of trusts with the biggest difference between them being whether they are revocable or irrevocable.

Revocable Trusts

A revocable trust, also referred to as a living trust, is used to transfer assets outside of probate. This type of trust can be controlled and amended throughout the granter’s lifetime, meaning the granter can add to, change, or dissolve the trust if they wish. While the flexibility of a revocable trust can be beneficial as it can be altered at any time, it does not protect assets from taxation while the granter is still alive.

Irrevocable Trusts

An irrevocable trust is used to transfer assets out of a granter’s estate while they are still alive and into a trust where they are protected from taxes and probate. However, unlike a revocable trust, an irrevocable trust is not flexible once the documents have been signed. This means that the granter cannot add to or remove items from the trust and it cannot be changed in any way.

Misconceptions About Trusts in Arizona

There are several misconceptions surrounding trusts in Arizona, such as that trusts are only used by the wealthy. This misconception stems from decades of false information and the use of terms like “trust fund baby.” The truth is that trusts are excellent estate planning tools for people of any economic status and the cost is dependent on the type and complexity of the trust.

Another common misconception about trusts is that they require individuals to give up control of their assets. Although assets may be placed in a trust, they are done so under the wishes of the grantor and not any third-party. If a revocable trust is used, the grantor also has the ability to amend it at any time.

Request Assistance with Estate Planning

Estate planning is often recommended before a person passes away to allow for the distribution of assets and property upon the person’s death. Working with an experienced Mesa estate planning attorney ensures that all components of a trust are professionally prepared to prevent an incomplete trust from being filed.

If you are looking for the best way to protect your hard-earned property and assets, estate planning is the optimal choice. Contact Mesa estate planning attorney David Weed at 480-573-6909 to discuss your needs.

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