Revocable Living TrustTrust Administration

Revocable Living Trust in Arizona – Advantages and Disadvantages

Advantages and Disadvantages of Creating a Revocable Living Trust in Arizona

Advantages and Disadvantages of Creating a Revocable Living Trust in Arizona

Are you thinking of creating a revocable living trust? Here's a quick look at some of the advantages and disadvantages of creating a revocable living trust.

Did you know that only 33% of Americans have set up a trust for their estate?

Estate Planning is essential for all families. Creating a revocable living trust in Arizona has many advantages. It can help you avoid probate, ensure that your assets are distributed the way you want them to be, and provide for your loved ones if something happens to you.

However, there are also some disadvantages to consider before making a decision. For example, trusts can be time consuming to maintain and they can prevent you from applying for government benefits like Medicaid.

Keep reading to learn the advantages and disadvantages of a revocable living trust.

What Is a Revocable Living Trust?

A revocable living trust is a legal document allowing you to control your assets while alive. Then it will transfer your assets to your beneficiaries when you die or it will keep it in trust for their benefit (when set up as a Dynasty Trust). It's called a revocable living trust because you can change it or revoke it anytime when you are alive.

An advantage of a trust is that it is a great way to avoid the probate process. Probate is the legal process of distributing your property after you die. When you have a last will and testament, all your assets must go through probate to be distributed to your beneficiaries. Assets in the trust do not need to go to probate court.

But if you have a trust, a trust that has been properly created and funded, your assets will automatically go to your heirs without going through probate. This can save your family a lot of time and money.

What Happens if You Die Without a Living Trust in Place?

Without a living trust, if you die without a probate avoidance strategy in place your loved ones will have to go through the time-consuming and often expensive probate process to sort out your estate.

There are ways to stay out of probate courts avoiding probate without a revocable trust but only an attorney can help you.

Without a trust your assets will be distributed according to the laws of your state. In most cases, this will mean that your assets will go to your closest relatives according to a set order of succession.

During probate, a court will appoint an executor to administer your estate. This person will be responsible for gathering all of your assets, paying off any debts you may have owed, sort out tax bills, and distributing what's left to your beneficiaries.

How Can Your Loved Ones Avoid Probate Court Proceedings?

If you want to avoid probate and make things easier for your loved ones after you're gone, creating a living trust may be a good strategy. With a living trust in place, you can appoint someone you trust to manage your assets after you die.

The Trust administration process is also not public record, that will keep your estate private.

The important thing is to make sure that your living trust includes all of your assets, including any real estate investment, bank accounts, retirement accounts, and stocks.

You should also name a trustee responsible for managing the trust after you die. You can hire a probate lawyer to help you set up your trust and make sure everything is in order.

What Are the cons of Revocable Living Trusts?

There are many benefits of creating revocable living trusts. Most importantly, it can help you avoid probate, which can be lengthy and expensive. Last will and testaments alone will not achieve that goal.

A revocable living trust also allows you to remain in control of your assets during your lifetime. It enables you to name someone else to manage your affairs if you become incapacitated.

A revocable trust usually turns into an irrevocable one after the first or second death of the trust maker. That can provide some asset protection for your loved ones, specially if you have a blended family. Estate plan for blended families usually require the creation of a trust to provide better control of the assets in the trust.

Additionally, a revocable living trust may help protect your assets from your heirs creditors in the event of your death.

What Are the Disadvantages of Creating a Revocable Living Trust?

There are a few key disadvantages of creating a revocable living trust:

  1. They're more expensive to set up and maintain than a will.
  1. Revocable living trusts may be complex, so you'll likely need to work with a trust lawyer specialising in estate planning to ensure everything is done correctly.
  1. If you become incapacitated or die, the trust becomes irrevocable. It can't be changed (unless the specific language is included in the trust documents). That can either be an advantage or a disadvantage if not properly done.
  1. Assets held in a revocable living trust are not protected from creditors in the event of bankruptcy.
  1. A disadvantages of a living trust is that it may prevent you from applying for government benefits like Medicaid and ALTCS in Arizona. If you plan to apply talk to an estate plan lawyer that also does elder law to avoid surprises.

The good news is that, despite these potential disadvantages, a revocable living trust can be a great state plan strategy for many people. It provides much more protection than a last will and testament.

If you're considering setting one up, work with an experienced estate planning attorney to ensure everything is done correctly.

How Easy Is It to Create a Revocable Living Trust in Arizona, and Who Should Consider Doing So?

It's easy to create a revocable living trust in Arizona. Arizona has the best trust laws in the country. Arizona living trusts usually are also valid in 50 states. In fact, it can often be done quickly and easily through a lawyer.

Generally, anyone with assets they would like to pass on to their heirs should consider creating a revocable living trust. This includes couples with children from previous marriages, business owners, and anyone who wants more control over how their assets are distributed after they die.

How Do You Create a Revocable Living Trust in Arizona, and Who Should Be Involved in the Process?

To create a revocable living trust in Arizona, you must work with an attorney. The attorney will help you draft the trust document and will also help you name trustees and beneficiaries.

In most cases, the trustee is the person who will administer the trust and make decisions about your property after you die. The beneficiaries are the people who will receive your property once the trustee distributes it.

Is A Revocable Living Trust Right For Your Estate?

Revocable trusts are an excellent estate planning tool, but you must ensure they're right for you. If you're considering setting up a revocable living trust, consult an experienced estate planning attorney.

Citadel Law Firm can help you learn more about the advantages and disadvantages of doing so for your particular situation. Contact us today to get started. Click here or on the button below to schedule your free estate planning consultation. If you prefer call (480) 565-8020, we will be pleased to help you.