A Revocable Trust, often called a Family Trust or Living Trust, differs from a Will. Having a Trust will save your estate from a probate and also provides greater privacy.
A common question people ask is why should I bother creating a Trust? It is a misconception that only wealthy individuals should create a Trust. A Trust is beneficial for many reasons. An Arizona family Trust or living Trust creates a legal contract that specifies and manages the distribution of the Trust’s assets. A Trust can take advantage of tax benefits, avoid probate, preserve your privacy and manage financial dealings. Much like financial planning while you’re alive, preparing a Living Trust allows you to make plans for your estate after your death. A Family Trust is established during your lifetime and is usually revocable, so you can make changes to your Trust. If the situation arises due to changes in your financial circumstances, you can also reclaim property that was transferred into the Trust.
A Revocable Trust dictates how your want your property to be handled while you are alive as well as distributed after your death. If a person dies without a Trust, there could be a probate to determine how to distribute your estate. This can become a lengthy and costly process. Having a Last Will and Testament in place can help the courts determine how to make distributions, but it does not avoid the probate process. The probate process validates the Last Will and Testament if one exists, however this process allows public access to the deceased’s estate and it opens up the estate’s distributions for public viewing. That is why you should not only create a Will but a Trust as well. If set up properly, the Revocable Trust will not go through the probate process, this is because the owner of the property (the Revocable Trust) did not pass away, just the person in the role of the Trustor or Grantor (you). The successor Trustee will be able to step in and handle the affairs of the Trust, including the distribution of the assets.
Most families like to use Trusts to minimize inheritance taxes that can be associated with the transfer of assets from parents to children or grandchildren. A Trust also allows parents to remain in control of their assets and decide on the distributions amounts and place age restrictions on the beneficiaries as to when they receive the assets. It can also ensure providing for family members who are disabled. Some Trusts can be created for the purpose of protecting assets and build lasting framework for the family’s wealth. The key to a successful Revocable Living Trust is to create one that best suits the family’s needs and one that will function properly over time and ensure to fulfill the wishes of the Trustor. For more information on creating your Revocable Trust, call the Dana Law Firm.