Both revocable trusts and wills are important aspects of estate planning in Arizona. These documents allow you to name the people you want to receive your assets after you pass away. Without estate planning documents like trusts and wills, you will be unable to determine exactly who will be left with your estate when you’re no longer around. Instead, the courts will follow a process of deciding which assets go to which family members. If you want to leave your money to a charity, a stepchild, or a non-family member, the court will, unfortunately, not consider these people as legitimate heirs.
Revocable trusts and wills are both ways to ensure that you, not the court, are the one who determines what happens to your things when you’re gone. They do have certain differences, and both have advantages and disadvantages.
In a will, you can lay out how you want your estate to be distributed in the event of your death, and you can make amendments to change it whenever you’d like, as long as you’re of sound mind. The people you designate to become the new owners of your assets are called beneficiaries. Beneficiaries can receive more than just your tangible possessions—they can also receive things like your accounts, investments, and insurance plans.
A will is a document in which you can name who you’d like to be the guardian of any minor children you may have. You can also include who you want to be the executor of your estate. This is the person who will distribute your assets as described in your will. They also have to complete certain tedious tasks, like paying any bills or debts that you left behind.
If you leave a will and no trust, your estate will likely go through probate, which is the process where the court validates and carries out the instructions of a will. In Arizona, estates with personal property that is valued at $75,000 or less do not have to go through probate if it’s been at least 30 days since the decedent (the creator of the will) has died and no one has applied to be the executor. A will needs witnesses to be considered valid, and you should have a lawyer help you to ensure that everything is in accordance with the law.
A revocable trust is another name for a living trust, and as the word “revocable” implies, it can be changed at any time. Just like a will, a revocable trust can also include the people you want to receive your assets when you pass away. You could transfer property to someone through a trust at any time. However, they are effective as soon as they are created, unlike wills, which only go into effect upon your death.
While an executor takes care of the property left behind in a will, a trustee does the same with the assets in a trust. However, trusts do not have to go through probate, regardless of the value they contain. To create a revocable trust, you should consult with an estate planning lawyer who can make sure that your trust is legally valid.
Trusts and wills differ in many ways, but one is quite significant: trusts can allow your estate to bypass probate. This can be a very lengthy legal procedure, with fees that expose your financial affairs to the public, and it can even involve challenges and disputes from the people affected by your will. With a trust, the individuals you want to receive your property can receive it much more quickly and easily, without fees and court dates. Trusts can also help your estate avoid some estate taxation.
There is a disadvantage to creating a trust, though. The process of creating a trust can be more complicated and expensive than that of a will, so you should decide if a trust works for you. If you have a small estate that could bypass probate with a will, a trust may not be worth the cost.
Even if you have made the choice to create a trust for your estate plan, you should still make a will. This can catch anything that you didn’t specifically put in a trust, since you probably won’t remember every single thing you own. Additionally, you can choose who you want to be the guardian of your children, if they are minors.
A: If you want your estate to avoid probate, estate taxes, and public exposure, you should create a revocable trust. In this case, you would still need to have a will to catch anything that was not placed in the trust and take care of things that a trust cannot. If you have a small estate that could bypass probate and you’re not concerned about things like estate taxes, you may not need to create a revocable trust and could instead create a will.
A: Trusts allow an estate to avoid going through probate, unlike wills. They can also reduce taxation on property that is transferred to individuals. While wills cover all of a decedent’s assets, trusts only cover assets specifically put into them. In addition, there are some things that you can only do in a will, such as choosing a guardian for your children if they are minors.
A: Trusts do not go through the process of probate in Arizona. This is an enormous advantage since probate can be very difficult for the loved ones you leave behind. During probate, family members may try to challenge or dispute your will in court, and everything goes on the public record. Therefore, by creating a trust, you can make things much easier for those you love when you’re no longer around.
A: One drawback of a revocable trust is that it requires a lengthier, more expensive process to set up than a will. Trusts are more complex, and lawyers will charge more money to help you with them. However, they may be able to save you or your loved ones money on taxes and other things later on.
You should treat estate planning documents like wills and trusts with the utmost care because they are imperative to the distribution of your assets when you pass away. If your will or trust isn’t legally sound, your loved ones could be unable to receive your property as you intended. This is why you need an attorney to help in the creation of your estate plan. Glazer, Hammond, Ruben & Smets, PLLC, is a law firm that treats estate planning with the care that it deserves. Reach out to our team to discuss your estate planning needs today.