A revocable living trust is a document that allows you to transfer ownership over properties within your lifetime into a trust in favor of the intended beneficiaries. The creation of a revocable living trust is an important tool in estate planning while retaining control over the transferred assets during your lifetime.

When you create a living trust in Arizona, you are the grantor of properties which will be transferred to the trust under the management and supervision of a trustee. As mentioned above, the trustor can still retain control of the properties if you name yourself as the trustee of said properties.

The point of a living trust is to remove the properties from your ownership and effectively exclude them from the mass of assets subject to estate taxes once you die. But while theoretically these properties are no longer owned by the trustor, their control and management remains with him if he is the designated trustee.

Upon your death, the properties and assets under the trust shall go to the beneficiaries free of any estate tax obligations.

But there are many benefits that a revocable living trust can bring aside from enjoying tax savings.

If a living trust is revocable at will by the trustor during his lifetime, it gives him the flexibility to continue with the transfer or not.

Creating a revocable living trust allows you to pass your assets to your heirs who are designated beneficiaries without having them to go through a lengthy probate proceeding. In Arizona, properties belonging to the decedent’s estate are not allowed to be distributed to the heirs without the approval of the probate court.

While the state of Arizona has already streamlined the processing of estates especially the smaller ones which are valued under $50,000, the properties are not afforded of the same protection as those transferred under a revocable living trust.

Simply put, avoiding a probate proceeding allows you to transfer your properties quicker and easier. This is especially true in cases where the estate left through a last will and testament is large and there complexities of the properties comprising it.

Another benefit of the a revocable living trust is that it allows you to specifically control the timing and manner of passing your properties and assets to the individual personally selected by the trustor. This is virtually a preemption of what would be the court order as to the distribution of assets after undergoing the probate proceedings.

If properties are left through will or none, it will be subject to the successional laws and statutes of Arizona. In effect, there would be certain portions of your properties that will go to some relatives who you do not intend to receive any at all.

However, you are assured with a revocable living trust that only those designated beneficiaries will receive what specific property or portion of such property you intended for them. Moreover, skipping a court proceeding like probate makes property transfers a private affair since undergoing probate will make everything part of the public record.

Another reason why you should execute a revocable living trust is that it allows you to save money.

The financial savings that you would expect from a revocable living trust, however, is not apparent upon the execution of said trust. In fact, drafting a revocable living trust would cost you more than executing a last will and testament.

The reason for this is that a trust is a more complex legal document with several separate paper works involved for transferring properties like bank accounts, stocks, and bonds under the name of the trust. Also, a revocable living trust requires that any insurance policies should be changed as to its beneficiaries.

But the cost of a revocable living trust would be less upon distribution of the properties. Since a trust is not subject to probate proceedings, it would excuse you from incurring court costs and other judicial expenses.

To sum up, here are the following reasons why you should do a revocable living trust:

• Avoids multiple probate proceedings if you own assets in more than one state;
• Provides easier and more efficient administration of your estate;
• Prevents court interference upon trustor’s incapacity;
• Gives you maximum privacy by avoiding public court processes;
• Consolidates all of your assets into one plan controlled by one set of instructions;
• Makes it easier to make equitable distributions to your beneficiaries;
• Allows you to keep assets in the trust until your beneficiaries reach the designated age you want them to inherit;
• Assets can remain in the trust and be protected from beneficiaries’ own creditors, spouses, divorce proceedings, irresponsible spending and future death taxes;
• Prevents any judicial control as to the inheritance of minor children;
• More difficult than a will to contest;
• Provides effective marriage settlement protection;
• Can be modified or revoked at any time during the trustor’s lifetime;
• Allows for professional asset management with a professional trustee;
• Can include tax planning to reduce or eliminate federal estate taxes; and
• Lets you keep maximum control while you are living or even incapacitated, and after your death.

 

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