Sun City Estate Planning Blog

Serving as the administrator of a trust, also known as a trustee, can be a great honor. In many instances, an individual has named another person in his or her will to serve as the administrator of a trust because he or she trusted the sound judgment of the named person. As much of an honor the title may seem, there are significant responsibilities that come with it. Both trustee and trust beneficiaries need to know about these duties so that they can ensure that the trustee acts in accordance with the law.

At the heart of trust administration is the fiduciary duty. In short, a fiduciary is an individual who must act in the best interests and for the benefit of another. In the case of a trust, the trustee must make all decisions for the benefit of trust beneficiaries. This can be overwhelming to some trustees. After all, they may be responsible for investing trust assets and/or distributing them in accordance with the trust's terms.

Estate planning can be an intricate process. Depending on the circumstances, numerous legal documents may need to be drafted, and the language in key provisions can be critical to their interpretation. Therefore, a lot of care needs to go into the drafting of these documents with three major components in mind: communication, clarity, and customization.

Communication is often key to effective estate planning. Far too often, individuals put off talking about their estate plans with their attorneys and their loved ones. This is the only way to head off unforeseen complications and ensure that loved ones understand your estate planning intentions. Of course, every family is different, so exactly how these matters are handled will vary based on familial dynamics.

Readers of this blog might be aware of the numerous estate planning tools they have at their disposal. Many Arizonans choose to utilize a living trust as part of their estate plan as it allows assets to bypass the probate process. One of these trusts can also give a testator a certain amount of control over those assets, thereby allowing him or her to dictate the terms associated with release of trust assets. Yet, in order for a living will to be effective it must be constantly updated. Those who fail to put all of their assets into this trust may wind up having those assets subject to a distribution that is not in accordance with their wishes.

This is why many individuals choose to create what is referred to as a pour-over will. This type of will specifies that all assets owned by the testator are to be transferred to a living trust upon his or her death. This is an effective and efficient way to manage one's estate because he or she doesn't have to constantly revisit the trust to ensure that it contains all of his or her assets. It can also help ensure privacy since the specifics of living trusts are kept from the public eye.

There are many estate planning legal documents that an Arizonan can utilize to ensure that his or her assets are handled in accordance with his or her wishes. For some, this means creating a simple will. For others, more extensive planning is needed. One of a variety of trusts can help place restrictions on asset distribution and provide tax benefits, which is often a major draw for estate planners.

One type of trust that is common in estate planning is the revocable trust. As it's name implies, this is an entity that can be revoked at any time. Some compare the revocable trust to an open bag, where assets can be placed into the "bag" and then removed at will. Upon death, though, the bag is sealed and any assets remaining inside the trust will become subject to its terms.