Posted by Dana Law Group on October 7, 2020
While nobody wants to think about what will happen after they pass away, having a plan in place can ensure that your final wishes are carried out properly. In addition to a “traditional” will, many people are now setting up living trusts (also known as revocable trusts) as part of their estate plans.
By having a living trust in place, you can protect your loved ones from having to go through the probate process after you pass. Meanwhile, a living trust can protect your privacy and give you some added peace of mind.
Still, setting up a living trust in the state of Arizona comes with its own unique challenges. By being aware of these challenges and how to overcome them, you can have your living trust set up in no time.
One of the main reasons some people never set up a living trust is that they’re simply intimidated by the paperwork involved—and for good reason. There is a great deal of paperwork that must be filled out and filed with the proper authorities in order to establish and update a trust as needed.
As with setting up a will and many other aspects of estate planning, living trusts can also be somewhat costly to establish. In fact, the national average to set up an individual trust can range anywhere from $1,100 to $1,500.
Another aspect of living trusts that many people struggle with is simply choosing their beneficiaries and other terms of the trust itself. This can get even more complicated for those who have large families or many children to name in the trust itself. Fortunately, one of the biggest advantages of having a living trust is that these legal documents can be updated and changed at any time, so you can always make changes to your beneficiaries as needed.
Taxes are another common issue when it comes to setting up a living trust. Unfortunately, trusts typically do not offer much in the way of up-front tax advantages. However, there are some ways you can strategize your trust to ensure that your beneficiaries pay as little in taxes as possible. This can get complex, however, and you’ll benefit from working with somebody who is familiar with tax laws as they relate to revocable trusts. Otherwise, you might end up leaving money on the table when it comes time for your beneficiaries to inherit your estate.
With so much to keep in mind as you get started with setting up a living trust, its easy to get overwhelmed by the process. The good news, however, is that there are ways to overcome these common challenges.
The best thing you can do is to work with an experienced legal team throughout every step of the process. Ideally, you should work with somebody who has set up dozens (if not hundreds) of living trusts for people in situations similar to yours. From there, you can get the help you need to make the right decisions moving forward!
At the Dana Law Group, we specialize in helping people just like you establish revocable trusts smoothly and easily. And if you need to make any changes to your trust down the road, we’re always happy to help. Contact us today to set up a free consultation or to find out more about how we can help you establish your living trust right here in Arizona.