Consumer's Guide to Living Trusts & Wills in Arizona

By David Carnes

A will is a set of instructions that tell a probate court how to distribute your assets between the time you die and the time probate is closed — anywhere from several months to several years later. A living trust, by contrast, is administered by your trustee and takes effect while you are still alive. You may authorize your trustee to distribute trust assets all at once or over a long period of time.

A will is a set of instructions that tell a probate court how to distribute your assets between the time you die and the time probate is closed — anywhere from several months to several years later. A living trust, by contrast, is administered by your trustee and takes effect while you are still alive. You may authorize your trustee to distribute trust assets all at once or over a long period of time.

Living Trusts

To create an Arizona living trust, you must first draft and sign a Declaration of Trust. The Declaration of Trust names the trustee who will administer the trust, names the beneficiaries, states whether the trust is revocable or irrevocable and lists the powers and duties of the trustee. You may vest the trustee with wide discretionary powers with respect to his disposition of trust assets, or you may provide him with specific instructions. If the trust is revocable, you can amend or dissolve it at any time. If it is irrevocable, you cannot amend or dissolve it without a court order. You may fund the trust by listing trust property in an appendix to the Declaration of Trust and by transferring title to titled assets, such as real estate and bank accounts, to the trustee's name. The assets of a living trust are not subject to probate after you die, as long as you re-title all titled assets in the name of the trustee.

Protect your loved ones. Start My Estate Plan

Testamentary Trusts

You can create a testamentary trust by including the terms of a Declaration of Trust as part of your will. In this case, the trust will not be created until you die. Since you will be dead by the time the trust takes effect, the trust will be irrevocable as soon as it is created and cannot be revoked without a court order. The assets of a testamentary trust are subject to the jurisdiction of the probate court, just like any other assets that pass under your will.

Wills

In Arizona, a will must be in writing, signed by you, or someone else at your direction, and two people who watched you sign it. Your will may only distribute assets that remain in your estate after all estate creditors have been paid. One exception to this rule is that your spouse is entitled to receive the first $37,000 from your probate estate ahead of your creditors, even if your will attempts to disinherit your spouse.

Probate vs. Non-Probate Assets

Certain property is not subject to probate even if it is not part of a living trust. Such property includes property that belongs to your beneficiaries under qualified retirement plans, life insurance policies and annuities. It also includes assets held in joint tenancy with the right of survivorship, such as joint bank accounts or jointly-held real estate. Check the title documents to jointly-held property to confirm the "right of survivorship" applies. If it does, the property is not subject to probate and can pass immediately to the surviving owner.

Protect your loved ones. Start My Estate Plan
Living Trusts in the State of Washington

References

Resources

Related articles

How to Prepare a Living Trust at Home

A living trust allows you to place assets under the care of a trustee who then distributes the assets to the beneficiaries of your choosing, in accordance with the terms you've set forth in your trust document. A living trust is often used to protect assets from the expense and delays of the probate process. A revocable trust is taxed as the grantor's personal assets, while an irrevocable trust is taxed as an independent legal entity. You may establish a living trust by executing a trust document and placing assets into the trust. Although it is best to retain an attorney to draft the living trust, it is possible to draft it yourself with the aid of an online legal document provider.

Can You Transfer Debt Into a Living Trust?

A living trust is an agreement in which you transfer your assets into the ownership of the trust. You can retain control of those assets by naming yourself as trustee until your death, at which time a successor trustee takes over and distributes your assets to your beneficiaries. While you cannot transfer debt into a living trust, creditors might be able to reach the assets in the trust during your lifetime and after your death.

Are Living Trusts Exempt From Lawsuits?

Trusts can provide many advantages for asset protection, as well as easing the transfer of property from one generation to the next. However, not every trust protects assets from creditors or lawsuits. Testamentary trusts, which only become active after your death, can protect assets from your beneficiaries' creditors. However, living trusts, created during your lifetime, only provide protection from lawsuits against you if the trust is irrevocable.

LegalZoom. Legal help is here. Start Here. Wills. Trusts. Attorney help.

Related articles

Family Trust Planning Guide

A family trust is an estate planning tool that allows you to appoint a trustee to administer assets on behalf of ...

Living Trust Guidelines

A living trust is a way of managing assets, a tool used primarily in estate planning. It offers a number of advantages ...

Do It Yourself Last Wills & Trusts

Last wills and trusts are two ways to distribute your property after you die. A will and a trust may be used together ...

How to Write a Last Will & Living Trust

A last will and testament sets out how your property is to be distributed after your death. A living trust, also known ...

Browse by category
Ready to Begin? GET STARTED