Fundamentals of a Living Trust
What is a living trust?
A living trust is an estate planning legal document that contains your instructions and authorization for what you want to happen to your assets when you become disabled or pass away. But unlike a Will, a Living Trust does not require probate to administer your assets and control over your assets as well as transfer of assets can occur automatically and immediately without court action. This document is one of the most powerful tools in estate planning to protect your intentions and desires regarding the handling of your assets if you cannot act.
Should I have a living trust?
Basically, everyone who owns a home and/or other assets should have a living trust to protect themselves and their family members from unnecessary court costs and delay should you become incapacitated, disabled or die. If you are married, you want to protect your spouse from unnecessary confusion, court delays, and expenses. If you have children, you want to protect them from these same unnecessary hardships.
Benefits of a Living Trust
With a living trust, you can avoid all probate delays and related costs and make life much simpler for your family members and loved ones at the time of a medical crisis. Should you become incapacitated or disabled a living trust will avoid the need for complicated and costly guardianship or conservatorship actions. Should you pass away, your spouse will be able to automatically and immediately continue forward without delay or unnecessary expense. Most importantly, when you and your spouse both die, your assets will pass automatically and immediately to your children and/or family members or loved ones without court action or unnecessary costs or expenses. This allows for quick distributions of your assets without the need for time consuming and costly legal action. Living trusts save time, money and future heartache for your loved ones. Trusts are inexpensive and easy to set up.
What makes a better living trust, strategies and provisions?
As for everything in life, there are good and poor products. A trust agreement, being a legal document, must be written by professionals with the knowledge and experience to prepare such a legal document to cover all of your needs and desires. Arizona adopted The New Arizona Trust Code which contains many provisions which could prove extremely beneficial to achieve your estate planning goals. The strategy put in these documents is just as important as the documents themselves. Even with a living trust, if not properly and completely drafted, after thorough communication with you as the client, can fall short of your goals. It is imperative that you work with professionals that can make recommendations using the provisions of The New Arizona Trust Code as well as common sense, life suggestions in drafting your living trust and other estate planning documents. One such suggestion is to eliminate the need for medical opinions regarding your incapacity or disability in order to utilize your estate planning documents. This sprinkling power provision could cause delay and inconvenience to your successor trustees in order to act for your in times of medical crisis. A better written living trust needs to incorporate all of the beneficial provisions written into The New Arizona Trust Code. An example of this point is to incorporate the Alternative Dispute Resolutions contained in The New Arizona Trust Code which will avoid any expensive and time consuming litigation in court by lawyers charging huge legal fees should there be any dispute or deadlock by family members or beneficiaries. This provision requires all parties to mediate and talk out their differences to a reasonable resolution without such hardship of court. It is imperative that you interview your professional document preparer to be sure that he or she is fully aware of the legal options and consequences available to you in drafting your trust and estate planning documents.
Funding Your Living Trust
Upon completion of drafting your living trust, it is imperative that you fund, or otherwise transfer title and/or beneficial interest or ownership of your estate assets to your living trust in order to avoid probate. If assets are not titled to or otherwise connected to your trust agreement they are not under the Arizona Trust Code and will require a probate upon your incapacity, disability, and/or death. This completely defeats the purpose of drafting your living trust agreement in the first place. Too often, we see incomplete funding of a trust. This can happen as a result of poor planning and coordination with your professional advisor. ALTA Estate Services prides itself in drafting and coordinating a thorough and complete living trust and estate planning package after planning with clients. This includes an intensive review of the goals and objectives clients’ desire as well as drafting all beneficial language into living trust and estate planning documents. Further, we review all estate assets and coordinate the complete funding of your trust by transfer of assets into the name of the living trust.
In addition, it is important to stay up on the status of your estate assets to assure that your assets are completely protected and remain under your living trust. Frequently, we have seen clients’ assets fall out of their trust. This can happen should you refinance your home after creating your living trust and transferring your home into the trust name. When refinancing your home, banks frequently take the title to your home out of the trust to complete the refinancing process and do not put the home back into the trust. You may not be aware that this even occurred. This is why it is essential to have periodic reviews with your professional to assure that all is in good order. Realizing the importance of this, ALTA Estate Services emphasizes the need for clients to communicate with us at no charge in order to review and update their trust and estate plan.
Why ALTA Estate Services, LLC
We pride ourselves on our customer service, care and concern as well as strength in our legal capabilities of drafting comprehensive and organized trust and estate plan documents utilizing all the new beneficial provisions of The Arizona Trust Code. In addition, we make ourselves available to you as well as your family members and loved ones at no charge. We understand the extreme importance and sensitivity of estate planning in protecting you and your loved ones from unnecessary hardship. We are sensitive to the needs of your family members and loved ones during times of medical crisis and make ourselves available for emergency phone calls at any hour, on any day, at no charge. This is just as important a tool to your estate planning as the documents themselves. It is essential that you comprehend and understand the importance of this service for your family members or loved ones in beginning your estate planning process in the first place.