What Happens When You Pass away Without a Living Trust in Arizona?
Estate planning is essential, as you do not want to pass away without a living trust. But what happens if you do? Here's what you need to know.
A 2022 survey has shown that only 33% of Americans have an estate plan in place. This means that 67% of Americans have yet to take this important step.
Having a living trust is a basic part of planning for the future. Arizona estate planning should be a priority for every Arizona resident, specially because Arizona is a community property state.
This will help you to maintain control of everything that you own. As well as controlling what happens to it if you were to pass away. It will also keep your estate assets out of the probate process.
Keep reading to find out what happens if you die without having a living trust in Arizona. Intestate succession laws in Arizona can be confusing.
What Is a Living Trust?
The estate planning process usually includes creating a living trust. This is a legal arrangement that is established by the grantor.
It is used to protect their assets and arrange the distribution for when they pass away. It is a legally binding document that has terms and a trustee. The main goal of a living trust is usually to keep people out of probate court.
The trustee is the person who will take over the living trust when the grantor passes away. They will be responsible for making sure all of the beneficiaries get their inheritance.
Arizona law recognize living trusts as being legal documents. This gives you peace of mind in knowing that your last wishes will be respected.
Keep in mind that there are also other kinds of trusts you can have, like irrevocable trusts in Arizona. Living trust laws will be a bit different, so you will need to look into the details.
What Happens If You Don't Have a Living Trust?
What if you die before you created a living trust? This is a common question, and this will usually result in intestate inheritance. An intestate estate will follow intestate succession laws. Arizona is a community property, the surviving spouse usually gets everything if there is no children from previous marriage. The decedent's separate property may have a different distribution.
This will apply if you do not have any other wishes in place. For instance, if you have a beneficiary designation or a right of survivorship, this won’t apply. Estate planning attorneys should be able to help you understand intestate succession laws and who will be the personal representative for your estate.
If interstate inherence does apply, it will go to your nearest surviving relative. This usually applies to surviving spouse or your surviving children.
If you do not have children or a spouse, your assets will go to your surviving parents. If you do not have parents, your siblings or your nieces and nephews will inherit your assets.
So even if you do not have a living trust, your assets will still be distributed. You just won’t have any say over where they are going. Your assets also will have to go to the probate process to be distributed.
Can Your Assets Go to Unrelated People?
If you do not have a living trust, your assets have to be distributed anyway. If you don’t have any surviving family or surviving descendants, you may be wondering if this could go to friends.
Without any surviving family, your assets will be given to the state of Arizona. This will be the case unless you have some kind of trust in place.
There may be some instances where you can give your inheritance to someone who is not related to you. But you will need to make these arrangements before you pass away.
Benefits of Having a Living Trust
Now that you know about living trust laws, what are the benefits of this trust? This is a commonly asked question, especially if you are choosing a trust option.
It is a good idea to understand the pros and cons before making your decision. After all, this is going to be the legal document people will follow after you have passed away.
It is a good idea to hire an Arizona estate planning attorney to help you with this. They will help you to choose the right trust for your situation and create it.
One of the best benefits of a living trust is that it protects your beneficiaries. For instance, if you have minor children, your living trust will ensure they are taken care of.
A living trust will also protect children who are now married. You can specifically make sure the inheritance goes to your actual children and not their spouses. If you have valuable assets consider discussing the creating of a Dynasty Trust with your estate planning attorney.
You can also make sure wealthier family members do not get access to your assets. This ensures they will go to the beneficiaries who need them the most if you wish.
You can also specify how your bank accounts, life insurance proceeds and other estate assets are distributed in your revocable living trust.
Makes It Simpler
Dealing with the aftereffects of a loved one passing is very difficult. It is even more difficult when you have to make all of the arrangements with their belongings.
Having a trust in place saves your loved ones from having to make these decisions. All they need to do is follow your last wishes when distributing your assets. You estate planning attorney will also be there to help them with the trust administration.
This will also take away the stress of dividing the inheritance between different family members. That can also save your surviving spouse a lot of time and stress.
Although people is always worried about estate taxes they matter less than you think. If you have a large estate and many valuable assets working with an trust and wills attorney will be even more important.
You can avoid probate if you have your assets in your trust instead of your will. All you will need to do is transfer ownership from your bank account to a trust account.
If you do not know how to do this, an attorney can help you. This will make the process much easier on your loved ones after you have passed.
Your surviving descendants and surviving spouse don't need to go through the probate process with a living trust in place.
Even if you die partially intestate, which will mean that your trust wasn't properly funded, estate planning attorneys will put mechanisms in place (like a pour over will) to make sure your assets go to your trust if probate proceedings are necessary.
Having a living trust doesn’t just protect your beneficiaries. This is a legal document that also helps to protect you during your lifetime.
If you become sick or incapacitated, the trustee will take over your living trust. They will be able to manage your assets and help make decisions on your behalf. The trust is usually a family member or a professional specialized in administering trusts.
Living Trust: What Happens If You Don't Have One
If you don’t have a living trust, you may be wondering what this means. If you were to die without this trust, your assets would be distributed to your nearest relatives. If you have a small estate the probate process will not be necessary. Small estates are rare though as the cut under Arizona state laws is very low.
A living trust not only avoids probate, but it gives you better control over your assets and where you want them to go.
Are you interested in creating a living trust?
Contact us today at Citadel Law Firm to book a free consultation. Click here to schedule your free estate planning consultation, or call (480) 565-8020. Our living trust attorneys will be pleased to help.