Who Owns a Property in a Trust in Arizona?
Who owns the property in a revocable living trust in the state of Arizona? To learn the answer to this question, read this complete guide on the topic.
Are you thinking about creating a trust in Arizona? You may save your family several hundred dollars to more than $5,000 in probate court fees. Talking to an estate planning attorney can highly benefit you in the choices you decide to make.
An estate in Arizona or another estate could easily pay between $5,000 to $10,000 in probate costs if no estate plan has been created. Setting up a revocable living trust and transferring your property into it can help save your family this cost when you pass away.
You may be wondering, "Who owns the property in a trust in the state of Arizona?" Let's explore what you need to know about the ownership structure in a trust in The Grand Canyon State.
What Is a Trust?
A trust is an agreement that allows one person to oversee another person's property and assets. The person creating the trust is the grantor. The third-party managing the trust's property is the trustee.
The trustee must act in the grantor's best interests. They must also make decisions that positively affect the trust's beneficiaries. These beneficiaries may be your children or other loved ones you want to receive your property when you die.
An attorney can serve as your trustee. Let them set up your trust for you. You can then transfer your assets into the trust.
Sometimes a grantor creates a single trust containing all of their assets. Other grantors set up multiple trusts for several family members. This can be an option if you have a blended family. A Dynasty Trust is also an option for blended families, especially if you are concerned about federal estate taxes.
Are you afraid your loved ones will squander the money you leave in your trust? You could outline the requirements they must meet before they receive the money.
An example of these requirements is getting married. Another possible requirement is reaching a specific age, like age 25. These requirements are important to consider, especially if you have minor children. A trust in an important estate planning tool to protect the property owner and his loved ones.
Benefits of Trusts
A major benefit of a trust is it will save your surviving family members money and time after you die. That's because they won't have to go through the probate process.
Probate is a court process that involves proving a deceased person's will is authentic. It also involves locating the person's assets and determining how valuable they are. The probate process is very time consuming and can be very difficult and expensive for your loved ones.
The next probate step in Arizona involves paying the deceased individual's final taxes and bills. The last step is to distribute the rest of their estate to the proper beneficiaries.
Money in a trust can bypass these steps and go straight to your beneficiaries. A trust may also reduce the amount you'll owe in taxes when you die. Set up a living trust in arizona to avoid probate. The trust designates your beneficiaries and it is not a public record. An Arizona trust is a great instrument to avoid probate when properly funded.
If avoiding probate is your main concern, go into an estate planning law firm today to speak with an estate planning attorney. They have the estate planning tools needed to make sure your loved ones do not have to go through the probate process. If you set up living trusts you will maintain control when you are alive and mentally capable. Trust are useful tools for most people.
Who Owns the Property in a Trust?
There are two types of trusts in Arizona: irrevocable and revocable. The type of trust you choose determines who owns the trust property from a legal and tax standpoint. Let's go over these two types of trusts.
An irrevocable trust is one where the trust owns the personal property in it. The grantor doesn't have any ties to the property or real estate.
The trustee will file tax returns for your irrevocable trust. The trust will even have a tax identification number. The income tax the trust owes will be paid through the trust, not the grantor or trustee.
Revocable trusts are also sometimes called grantor trusts or living trusts. That's because the grantors own the property in these types of trusts. This legal document has creditor protection. Couples usually have a shared living trust to protect their family and real estate.
Let's say you retitle your assets into your trust's name after setting up your revocable trust. You must still report all monetary profits and income from your trust assets on your tax return. Creditors may also come for your trust property if you're sued.
A major benefit of an irrevocable trust is it will protect your assets from lawsuits filed against you. A key advantage of a revocable trust is you can modify it after you've created it, making it the better choice for many families. You can't do this to an irrevocable trust. You also have the ability of transferring assets which irrevocable trusts do not allow you to do.
Hire an estate planning attorney to help you create the right trust for your needs. You may face unwanted tax repercussions if you create the trust incorrectly. An experienced trust attorney will make sure to set up the correct type of trust. A trust's purpose changes from one family to another.
The Grantor's Death
What happens after you pass away if you've created a trust in Arizona? Your trustee will distribute your assets to your beneficiaries or continue administering your assets based on your requirements. The trustee may pay funeral expenses our of the trust.
Perhaps you have named yourself the trustee. A successor trustee will have to assume this role. This could be a surviving spouse, a close friend, or anyone else you decided to name as successor trustee.
Some families create trust funds or family trusts that remain long after their grantors have died. They are usually called dynasty trust. This may be done to control certain beneficiaries' spending or even provide surviving spouses with consistent income.
Make sure to ask your lawyer about estate taxes with each type of trust as well. The estate tax varies depending on the type of trust you decide to choose and especially after you pass away.
Putting Money in a Trust
How do you put money in a trust in Arizona? Change the title on each asset you would like to transfer. Nonphysical assets that can go in a trust include certificates of deposit, which are savings accounts that hold money for specific amounts of time. They also include the following items:
- Bank accounts
Physical trust assets include personal belongings furniture, art, clothes, and jewelry. They also include real property. Any other assets that are unable to go into a trust, like retirement accounts, can be passed on without probate by beneficiary designations. An estate planning lawyer will be able to help you with the process of completing this.
Perhaps you have life insurance and have named your spouse as your beneficiary. Change the insurance policy's beneficiary designation to your trust instead. This will prevent the Arizona court from controlling the policy if your spouse is no longer alive or is incapacitated when you pass away.
Your personal representative will be in charge of the trust administration after your death. This can include making sure your assets pass to the trust beneficiaries.
However, if you do not appoint a personal representative, your trust will have a court appointed conservator. This could be tricky because your PR is in charge of your entire estate.
Start your estate plan today with an estate planning lawyer to make sure your belongings have the asset protection needed while still following arizona law.
Help With Estate Planning Laws
Who owns the property in a living trust in Arizona? The answer depends on the type of trust you've created.
Irrevocable trusts own the assets placed in them. Grantors, or trust creators, own the assets placed in revocable trusts. However, in a revocable living trust in arizona you are able to transfer ownership.
Knowing the differences between the types of trusts can benefit you. You can also speak with an estate planning attorney and they will be able to tell you your options. If a trust isn't for you, a Last Will and Testament can also be made and distribute your assets the way you desire.
At Citadel Law Firm, we take pride in offering high-quality estate planning services. We can help you determine the best trust option and set one up for you. We will listen to your wants and needs and complete an estate plan that applies to those.
Get in touch with us to learn more about our services, and protect your assets by creating a trust today!
Call (480)565-8020 or click here to schedule your free estate planning consultation. Our experienced wills and trusts attorney will be pleased to help you.