Trusts are often the best way for Arizona residents to distribute assets without having to worry about the costly and time-consuming probate process. There are many benefits to using a trust in Arizona. For one thing, a trust can offer protection. When someone passes away, the probate process allows the public to access information regarding the deceased’s will and assets. As the estate goes through probate, the creditors will be paid off, and probate fees in the range of 3 to 8 percent of the total estate will be assigned, plus estate and income taxes.
However, if there is a trust in place, the public will not have access to the deceased’s private information and creditors won’t be able to access the assets in the trust. You can also avoid probate fees and prevent your heirs from fighting over your belongings, if you assign beneficiaries. Certain trusts, such as life insurance trusts, also offer tax protections.
One common misconception is that trusts are inflexible and that once you create one, it is “set in stone.” This is not the case. Trusts can be revocable, meaning that you can make changes to it or get rid of it as long as you are alive. There is also flexibility as to what you can include. In general, trusts can include just about anything from real estate to investments to funds for education. The specifics of what you can and cannot not include in a trust will depend on what type of trust you use. You can even leave a legacy and set specific amounts of contributions to organizations that are important to you.
In any case, there will be a trustee that you, as a grantor, assign to be in charge of your estate and manage the assets included in your trusts. The trustee, whether it be an individual or investment firm, will be required to manage your trust in accordance with the law.
Source: Investopedia, “5 Benefits of Creating a Trust to Manage Wealth,” Kevin Simpson, Nov. 22, 2017