Trust Lawyer Serving Phoenix, Chandler, Ahwatukee and the surrounding areas.
It’s a common misconception that people think trusts are only for the super wealthy or business owners. The reality is that trusts can benefit nearly everyone. Trusts are for people who care about their loved ones, about building intergenerational wealth, making sure their wishes are followed after their passing, and much, much more.
Our Pheonix trusts lawyer could examine your situation and explain how a trust could help to meet your goals and desires. Regardless of what you want, a knowledgeable trusts and estates lawyer can work with you to create a plan to make it happen.
Understanding Trusts
Trusts are confusing. They confuse lawyers. They even confuse many estate planning lawyers. At its core a trust is a fiduciary relationship whereby one person, called a grantor or trustor, entrusts legal ownership of property to a trusted person, a trustee, to be held and used for the benefit of the beneficiary. As the name suggests, the arrangement requires trust.
The fiduciary duty arises because the trustee is supposed to manage the assets entrusted with the best interests of the beneficiaries in mind. While the original owner may serve in all three roles, they must still take actions for the benefit of all the beneficiaries rather than solely for personal gain. Most states and the IRS consider trusts a legal entity for tax purposes and the trustee is responsible for paying and filing taxes on any income earned.
In addition to all of that, trusts also come in three main varieties, the irrevocable trust, the testamentary trust, and the revocable living trust. All types of trusts may include some testamentary intent, but regardless of the estate plan, you will still need a will of some sort in order to complete the estate plan and plug any holes or create the trust in the first place.
Trusts Created After Death in Chandler
Another less expensive option is a testamentary trust. With this option, the terms of trust are established in advance, but the trust itself is not actually created until the grantors die. At that point, the property is transferred to the trustee to be held in trust. This type of trust is built into a will and comes into being as part of the estate administration.
A testamentary trust allows the grantor to control the distribution and disposition of assets in the same manner as a living trust. You may spread out or delay distributions or specify specific conditions (such as reaching a certain age) for beneficiaries to receive funds or property. For example, a father may specify in his will that his assets shall be held in trust until his children reach the age of 25, but they may receive discretionary distributions as part of the trust administration process.
What Are Irrevocable Trusts And What Are They Used For?
Irrevocable living trusts are extremely complicated pieces of estate planning law and should only be drafted by very experienced trust attorneys else the beneficiaries risk trust litigation. There are many different types of irrevocable trusts and they are used for all sorts of legal issues including the following: avoiding probate, avoiding conservatorships, special needs, and estate tax minimization.
Examples of irrevocable living trusts our law firm can help you with are listed below.
- SLATs (Spousal Lifetime Access Trust)
- SPAT (Special Power of Appointment Trust)
- GRAT, GRIT (Grantor retained trusts)
- Charitable Remainder Trusts such as CRATs, CRUTS, and
- Special Needs Trusts
- Medicaid Trusts & other Elder Law Trusts
Transferring Assets During a Person’s Lifetime
While a living trust used to only be used by the ultra wealthy, revocable living trusts have become popular choices for families and individuals. The main benefit for one’s heirs is avoiding the full probate process.
When you create a living trust, assets are transferred during the grantor’s lifetime. Upon the death of the grantor or grantors, the assets are not distributed through the probate courts since the trust did not die with the grantors. In essence, the trust continues on after the demise of those who funded it.
A living trust may be set up to be revocable by the grantors or irrevocable. A Chandler trusts attorney can help you understand the differences.
