Create a Living Trust in Arizona - How much does it cost?
What do you know about the costs associated with creating a living trust in Arizona? Read our blog to understand it better.
If you haven't made any plans for your estate, you're not alone. Recent surveys reveal that up to 65 percent of Americans do not have a current estate plan. "
A living trust is a critical part of a successful estate plan. But how much should you plan on spending on one in Arizona?
By the time you finish reading this article, you will have a solid understanding of how much a living trust in Arizona costs and why you should consider having one drawn up.
Cost of a Living Trust in Arizona
Creating a living trust in Arizona varies in price. The living trust cost, though, depends on how a person sets up the trust. Setting up trusts in Arizona is a great estate planning strategy as Arizona has some of the best living trusts laws in the country.
Begin with a qualified attorney. Each attorney has a different fee structure that will determine your final cost. Make sure you hire an attorney who has expertise in trusts.
Attorneys each have a different specialty, much like doctors. Some will specialize in criminal law, for example. You need an attorney specializing in estate planning law with experience writing trusts. The trust document is not just a legal document, it is a whole estate plan strategy specific for your needs after your death.
In case you become incapacitated a trusts in Arizona should also have a successor trustee that can make decisions for you (assuming you are your own trust during life).
Discussing Fee Rates
When you find your attorney, discuss the fee rates. The State Bar of Arizona website will have a list of qualified estate planning lawyers in Arizona.
An attorney's fees determine how much you will pay when you have a lawyer draw up your trust. So when you hire a lawyer, discuss their fee rates first, so you know what to expect.
Look for an attorney who specializes in drawing up trusts.
Flat Fee Living Trust Costs
If you hire an attorney you will usually pay a flat fee. Some attorneys will do it hourly but it is not common. The average cost of a trust in the Phoenix East Valley is:
Living Trust and Will only - no POA's -> $2,000 to $3,000
Living Trust and POA's (without Deed) -> $2,500 to $4,000
Living Trust and POA's (with Deed) -> $2,500 to $4,500
Living Trust with Dynasty Trust Structure -> starts at $4,500 (usually recommended for Blended families and large estates)
Hourly rate for Estate Planning Attorney
The hourly rate for an estate planning attorney in the Phoenix East Valley is usually between $300 but it can get up to $600 for attorneys that do litigation (for contest estates). Most attorneys will not do a Living Trust on an hourly basis as it will end up being more expensive for the client.
What Is a Living Trust?
A living trust is a trust that takes place while a settlor is still alive. It is also know as a revocable living trust. It is a tool for estate planning that allows one individual to hold property for the benefit of a third party or for its own benefit. To understand the living trust, you must first understand the parties involved:
- Trustee: The person holding the property
- Settlor: The person whose property is being held
- Beneficiary: The person for whom the property is being held. There are usually multiple beneficiaries to a living trust.
A living trust will ultimately eliminate a messy probate process after the settlor dies. The settlor will legally set up the trust, which allows the trustee to manage their assets which eventually go to the beneficiary.
Why Get a Living Trust in Arizona?
When you opt to create a living trust, you remove the burden of the probate process for your heirs. Probate refers to the legal process your assets go through after you die. Such a process ensures the state distributes your assets according to your wishes.
If you have a living trust that has been properly funded, your estate will not go into probate.
With that said, the Arizona Uniform Probate Code has made the probate process much easier than it used to be. The current probate rules do not require formal court approval or even personal appearances in court in some cases. The probate laws work exceptionally well for those who have an estate of less than $75,000.
With that said, if you have a more significant estate, you should spend the money to have an attorney design a living trust for your needs. If you're planning on leaving your property to a minor, you should also have a living trust created. The trustee can care for the property until the minor child comes of age.
Furthermore, you can avoid conservatorship if an illness or accident incapacitates you. In this case, you'll already have a trustee designated to care for your affairs.
A Living Trust vs. a Will
You will still need to have a will drawn up if you have a living trust. The living trust does not replace this other critical estate document. The will makes some crucial distinctions such as the following things:
- Names the executor
- Provides directions for paying debts and taxes
- Selects a manager for your children's property
- Establishes who will take guardianship of your children
Ultimately a living trust will do different things. Here are the specific things a living trust does that a will does not:
- May not allow revisions to be made
- Avoids probate court
- Avoids probate and keeps the process private
Both a will and a living trust name a property beneficiary. But a will also does things a living trust does not:
- Names a guardian for children
- Names an executor for the estate
- Avoid probate if not properly funded (to learn more about the importance of funding a trust click here)
It's also worth noting a living trust will cost more to set up than a will. The trust administration process is much simpler and easier than probate, on top of being less expensive.
A will costs between $1,000 and $1,500 if done by an attorney in AZ. Regardless of what you choose to do, you need an estate plan.
Impact on Taxes
In Arizona (unlike in some other states), a living trust won't significantly impact your taxes. Your family will not have to pay an inheritance or estate tax in Arizona. If you have an estate of more than $12.06 or $24.12 million for a couple (as of 2022), then you have to pay a federal estate tax.
You will have to pay the federal estate tax regardless of whether you have a living trust.
Look Into a Living Trust Today
A living trust is a great way to protect your assets and your loved ones. Our Trust and Wills attorneys in Chandler, AZ will be pleased to help. We can save you money and time by helping you avoid the probate process all together. We also can set up dynasty trusts for a blended family.
Are you interested in having a living trust created by Citadel Law Firm? We can help. Contact us today, and let our experts help you plan for your loved ones. You can call (480) 565-8020 or you can click in the button below to schedule your free estate planning consultation.