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.
There are many benefits to a revocable trust. To start, it is easily modified given the ease with which assets can be placed in and removed from the trust, as well as naming and amending beneficiaries. Additionally, revocable trusts and their assets can bypass the oftentimes costly and lengthy probate process. A revocable trust can also allow an individual to avoid a conservatorship in the event that he or she becomes incapacitated because a successor trustee can fill in.
There are some disadvantages to a revocable trust, though. This particular type of trust doesn’t provide any tax benefits, and in order for assets to officially be placed in the trust they have to be retitled. This latter process can be cumbersome. Also, beneficiaries have a longer period of time to contest a revocable trust compared to a basic will.
This is just one of many trust types available to Arizonans who are interested in estate planning. By learning more about their trust options, these individuals can better ensure that their estate and their loved ones are in good hands.