{"id":913,"date":"2017-11-30T14:23:12","date_gmt":"2017-11-30T14:23:12","guid":{"rendered":"https:\/\/www.jacksonwhitelaw.com\/arizona-estate-planning\/?page_id=913"},"modified":"2024-10-03T22:12:32","modified_gmt":"2024-10-03T22:12:32","slug":"what-is-a-living-trust","status":"publish","type":"post","link":"https:\/\/www.jacksonwhitelaw.com\/arizona-estate-planning\/blog\/what-is-a-living-trust\/","title":{"rendered":"What is a Living Trust?"},"content":{"rendered":"<h2>Introduction<\/h2>\n<p>A living trust is a legal document that establishes an instrument to hold, manage, and distribute your assets. Unlike a will that simply directs the transfer of assets after you die, a living trust provides asset management during your lifetime and after your death. As long as the trust is organized as a <a href=\"https:\/\/www.azleg.gov\/ars\/14\/10103.htm\">revocable trust<\/a> (in contrast to an irrevocable trust, which we\u2019ll discuss later) you will be the <a href=\"https:\/\/www.azleg.gov\/ars\/14\/07401.htm\">trustee<\/a> who manages everything, allowing you to <a href=\"https:\/\/www.azleg.gov\/ars\/14\/10602.htm\">amend<\/a> or revoke the trust at any time. You will transfer assets to the trust, where you will continue to benefit from the assets during your lifetime. When you die, the trust will pass into the hands of a successor trustee, who will then distribute the trust\u2019s assets to your <a href=\"https:\/\/www.azleg.gov\/ars\/14\/10103.htm\">beneficiaries<\/a> according to the directions in the <a href=\"https:\/\/www.jacksonwhitelaw.com\/arizona-estate-planning\/services\/trusts\/\">trust document<\/a>.<\/p>\n<h2>How to Set up a Living Trust<\/h2>\n<p>Start by consulting with a qualified estate planning attorney who understands the unique laws and regulations in your state. You may be able to get away with using a do-it-yourself will if your estate is simple enough, but a trust is a complex document that requires legal expertise.<\/p>\n<p>Next, map out the interested parties to the trust. If you would like to retain full ownership and control of the assets during your lifetime, then you will be the trustee, and you can designate a successor trustee to take over when you die. If you wish to relinquish control of the assets (usually to minimize estate taxes with an irrevocable trust) you\u2019ll need to select a third-party trustee. You\u2019ll also need to designate the trust\u2019s beneficiaries. For a living trust, list yourself and your spouse as the primary beneficiary, and then select family, associates, and charities to be contingent beneficiaries after your death.<\/p>\n<p>If you have any minor children, the trust document should specify who will serve as their <a href=\"https:\/\/www.azleg.gov\/ars\/14\/10103.htm\">guardian<\/a>. It would be wise to list a backup guardian in case the primary guardian dies before you, and it\u2019s always a good idea to talk to these individuals ahead of time so they are aware of your wishes.<\/p>\n<p>Once the trust is fully organized, you can transfer your assets to the trust. Some estate planning attorneys will have an assistant or a small division in the firm to assist you through this complicated process, but if not, at the very least they should provide you with clear, written instructions on how to transfer your assets to the trust. You\u2019ll need to list the trust as the new owner of the assets, and adjust the beneficiaries listed on the accounts as necessary.<\/p>\n<h2>The Benefits of a Living Trust<\/h2>\n<p>The primary benefit of a living trust is its ability to bypass probate. <a href=\"https:\/\/www.azleg.gov\/ars\/14\/03301.htm\">Probate<\/a> is the process of transferring property to your heirs through court proceedings, which can be lengthy and expensive. Probating simple estates can usually wrap up the process in 4 \u2013 6 months, but formal or supervised probate could take years if there are interested parties who contest the distribution of your estate. Any assets you transfer into the trust will pass to your beneficiaries outside of probate, saving you time and money. Any property owned by the trust will also transfer to your beneficiaries outside of probate, regardless of which state the property is in.<\/p>\n<p>On the subject of probate, all court proceedings are public record, meaning any of your assets that pass through probate will become public knowledge. If you wish to retain a measure of privacy, a living trust will transfer your assets without having to disclose anything to the public.<\/p>\n<p>A living trust removes the need for a durable power of attorney. Should you become incapacitated, the successor trustee can step in and manage your affairs. Note, however, that the trustee can only manage assets inside the trust. If you own any assets outside of the trust, you would need a power of attorney to grant someone the authority to manage those assets. Also, the successor trustee cannot make healthcare decisions on your behalf if you\u2019re incapacitated, so you will want to empower a healthcare proxy with a healthcare power of attorney. Your healthcare proxy will be able to make important medical decisions on your behalf if you\u2019re unable to communicate your decisions.<\/p>\n<p>A trust provides a measure of control over how and when your beneficiaries will receive their inheritance. If you have minor children you wish to provide for, you can instruct the successor trustee to provide income for the children until they reach adulthood, at which point they have access to the assets in full. Similarly, you can withhold access to the trust until the beneficiary achieves a specific target, such as graduating from college, or for the purchase of their first home. These specifications are not possible with a will.<\/p>\n<p>If you have children from a previous relationship and you\u2019re concerned your surviving spouse could disinherit them, or if you are concerned that your surviving spouse could remarry and you don\u2019t want your assets to transfer to their new spouse, you can use a trust to ensure that your inheritance passes to the right people. List your spouse as the trust\u2019s primary beneficiary, but limit their access to income-only. The successor trustee will provide annual income for them during their lifetime. When your spouse passes away, the residual assets in the trust will pass to your children who are listed as contingent beneficiaries.<\/p>\n<h2>The Disadvantages of a Living Trust<\/h2>\n<p>Due to its complexity, a living will is more expensive up-front than a simple will. If the trust requires diligent management by a trustee other than yourself, there will probably be ongoing administration expenses\u2014though these should be paid for with the assets in the trust. As a result, most estate planning attorneys will recommend a will over a living trust for smaller estates, especially those whose size qualifies to bypass probate (in Arizona you can bypass probate if you have less than $75,000 in assets and less than $100,000 in real estate).<\/p>\n<p>Also, a living trust should not be used to minimize estate taxes. A living or revocable trust allows you to retain ownership of the assets, so they will be counted towards the value of your estate. If your estate is worth more than $5.49 million (or $11 million for joint estates) then you may want to consider using an irrevocable trust to position assets away from your estate.<\/p>\n<p style=\"text-align: left\">Call our Estate team at <a href=\"tel:4804674325\">(480)467-4325<\/a> to discuss your case today.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Introduction A living trust is a legal document that establishes an instrument to hold, manage, and distribute your assets. Unlike a will that simply directs the transfer of assets after you die, a living trust provides asset management during your lifetime and after your death. As long as the trust is organized as a revocable [&hellip;]<\/p>\n","protected":false},"author":21,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"site-sidebar-layout":"default","site-content-layout":"default","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"default","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"set","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[81],"tags":[],"class_list":["post-913","post","type-post","status-publish","format-standard","hentry","category-trusts"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What is a Living Trust? - Arizona Estate Planning Lawyers<\/title>\n<meta name=\"description\" content=\"Unlike a will that simply directs the transfer of assets after you die, a living trust provides asset management during your lifetime and after your death.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.jacksonwhitelaw.com\/arizona-estate-planning\/blog\/what-is-a-living-trust\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What is a Living Trust? - Arizona Estate Planning Lawyers\" \/>\n<meta property=\"og:description\" content=\"Unlike a will that simply directs the transfer of assets after you die, a living trust provides asset management during your lifetime and after your death.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.jacksonwhitelaw.com\/arizona-estate-planning\/blog\/what-is-a-living-trust\/\" \/>\n<meta property=\"og:site_name\" content=\"Arizona Estate Planning Attorney - JacksonWhite Law\" \/>\n<meta property=\"article:published_time\" content=\"2017-11-30T14:23:12+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-10-03T22:12:32+00:00\" \/>\n<meta name=\"author\" content=\"JacksonWhite Law\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"JacksonWhite Law\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"What is a Living Trust? 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