A trust is a fiduciary arrangement in which a third party is entrusted to hold assets on behalf of beneficiaries, in the manner specified by the “trustor” or “settlor” in the trust document. Trusts are often believed necessary only in the realm of the wealthy, but nothing could be further from the truth. In fact, there are many reasons someone not considered “wealthy” may want to use a trust. So, what is a trust? Who needs trusts? And what does Arizona law say about this form of estate planning? More importantly, can a trust protect loved ones after our passing the same as or better than a will?
The “trustee” is a fiduciary entrusted with the responsibility of holding, investing, administering and distributing to beneficiaries the properties, securities, and other assets of the trust. The term “trustee” is derived from that role and simply refers to the person or entity who has the legal authority and duty to administer the trust estate on behalf of a client’s survivors. A trust can be “living” (established during the life of the creator) or arranged to take effect at death, though establishing the trust during life can have additional benefits. Trust planning can provide protection for beneficiaries, cost savings and tax advantages not derived when using a will for estate planning.
Anyone with a reasonably sized estate could benefit from a trust. An estate can be defined as any assets, liquid or not. Assets for purposes of an estate include real properties, cash assets, investments, securities, even insurance policies. If a person has children, a trust will ensure that the assets are handled as the deceased would want them handled on their behalf, including spacing out distributions to make sure that a child does not inherit too much too soon. As an estate planning tool, a trust is one of the best possible arrangements for ensuring the desire of the deceased, and can be customized to address most any family or beneficiary need.
A trust can also provide a mechanism to allow a trustee you’ve selected to manage your financial affairs during any period you are unable to handle your own affairs due to illness, physical or mental.
Title 14 of the Arizona Revised Statutes covers Trusts, Estates, and Protective Proceedings. Title 14 addresses various matters such as wills, trusts, types of probate (informal, formal, and supervised), how estate taxes are to be handled, the responsibilities of the deceased’s representative before the court, and related subjects.
Our Arizona Trust Code and Probate Code contain numerous tools to protect assets from creditors and predators in various situations, help prevent unreasonable attacks on your trust and estate planning, and for utilization of other planning techniques.
Trusts can be established during life or by your will at death. In most cases, it is recommended to set up the trust during your lifetime, which can assist in asset management and distribution during life and after death. Assets placed in trust are not subject to the probate process, and thus can assist in lessening the degree that the financial affairs of the family are subject to public access, which most clients would readily agree would be beneficial during such a difficult time of transition.
Our firm has a very knowledgeable and talented Trusts and Estates department, both in the drafting and preparation of documents, assisting clients and families in the administration of estates and trusts, and providing experienced litigation services.
For our estate planning services, our attorneys assist in a broad range of planning techniques, including traditional wills and revocable trusts, along with more sophisticated planning strategies such as insurance trusts, residence trusts, “defective” grantor trusts, generation-skipping or dynasty trusts, charitable trusts, split-interest trusts, qualified domestic trusts for non-citizen spouses, family limited partnerships and intra-family sales and loans, etc.
From a litigation standpoint, our team can help protect fiduciaries, creditors, and beneficiaries with whatever dispute may arise whether the result of a poorly planned trust, probate, or any other issue which may arise.
If you need help arranging a trust, living or otherwise, or need any other assistance with trusts and estate planning, contact Tiffany & Bosco to arrange a confidential consultation.