Four Peaks Planning, Inc.

Estate Planning in Arizona

Affordable estate planning for Arizona families using powers of attorney, wills and trusts. Call 480-229-6220 to schedule a complimentary consultation at your home or in our Ahwatukee office.

Revocable Living Trust Overview

What to know:

Revocable Living Trusts

Revocable living trusts are becoming a common estate planning tool for families in all stages of life. Younger families can use trusts to control how a simple life insurance policy is distributed to young beneficiaries or allow guardians to use the primary residence until children reach adulthood.

Families without dependent children are often concerned with avoiding probate when one passes. $75,000 of equity in real estate will trigger a formal probate in Arizona unless property is in a living trust or a beneficiary deed is used. $75,000 of non-real estate assets that do not already have a beneficiary listed will be subject to probate unless the assets are placed in a living trust.

Creating a Living Trust

When setting up a living trust, people typically name themselves both the Trustor(s) and Trustee(s), which allows people to maintain control of their assets.

While the Trustors are living, assets may be added or removed from the living trust. The Trustors are the initial beneficiaries of the living trust. Assets are only distributed to other beneficiaries once all Trustors are no longer living.

In Arizona a living trust may remain intact up to 500 yrs after the Trustors pass. In most cases, the trust terminates once all the trust's assets have been distributed.

Trustors Create and Amend Living Trusts

Trustors are also known as Grantors or Settlors. Once the living trust is created, there is little for the Trustors to do except amend language when needed. If both Co-Trustors are living, both Co-Trustees are needed to create an amendment. Depending on how the living trust is written, a surviving spouse can amend the trust alone. When all Trustors have passed, the language in the living trust may no longer be amended.

Trustees Manage Trust Assets

Trustees manage all trust assets in the best interest of the Trustors. Couples typically name themselves Co-Trustees so either can manage accounts and other assets. A few duties include:

If the initial Trustee(s) is/are incapacitated, Successor Trustees take over management of the living trust, similar to financial powers of attorneys. Once the Trustors have passed, the Successor Trustees follow the directions of the trust for distribution of the estate.

Transferring Assets To Living Trusts

This step is crucial when creating a living trust to manage an incapacitation easier and avoid probate. Signing legal documents alone does not transfer all your assets to your living trust. Some legwork is required on your part.

Clients are encouraged to contact us when assistance is needed.

Some Assets Remain Outside Living Trusts

Both retirement accounts and life insurance avoid probate when accounts and policies have living beneficiaries listed.