Arizona Estate Planning and Wills

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A Last Will and Testament in Arizona is a legal document that allows you to provide direction on how to divide your assets and who you wish be appointed to act as the guardian of your minor children. There are, however, several important limitations associated with using a Will as your only estate planning document.

For example, assets held as Joint Tenants With Rights of Survivorship will automatically pass to the joint asset holder regardless of the terms set forth in your Will. Bank accounts with “Payable on Death” designations, as well as retirement accounts and life insurance policies with beneficiary designations, will pass automatically to the named beneficiaries regardless of the terms set forth in your Will. There are also statutory allowances due to a surviving spouse that may affect the assets available to your other heirs.

If you are considering using a Will as your primary estate planning tool, you should first consult with a qualified Arizona estate planning attorney to review the current title designations affecting your real property, beneficiary designations on your other financial, retirement, and life insurance policies, and the Arizona statutory allowances granted to your spouse as a matter of law.

Please contact our Scottsdale estate planning lawyers today if you have any additional questions regarding a Last Will and Testament in Arizona.

What Are the Different Types of Wills in Arizona?

You have a few options with respect to the creation of a Will in Arizona. In less complicated matters, an Arizona Simple Will is typically sufficient to provide for the payment of your debts and the distribution of your assets. In more complicated matters, such as when a person owns a business or has extensive assets, an Arizona Long Form Will is typically preferable, as well as the creation of an Arizona Family Trust.

Many estate planning attorneys will also advise you to create, among other things, an Arizona Living Will. A Living Will contains your directives to medical professionals as to the type of life saving and/or life sustaining medical efforts you authorize in the event you become incapacitated and are unable to make those decisions.

You should consult with a qualified Arizona estate planning attorney to determine what type of Arizona Will is suitable for you and your family.

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What is an Arizona Family Trust in Estate Planning?

An Arizona Family Trust is a legal document that is either created during your lifetime (i.e., an Inter Vivos Trust commonly referred to as a Living Trust) or is created after your death (i.e., a Testamentary Trust).
The Arizona Family Trust controls the disposition of your assets amongst your heirs and provides you with significantly greater control over how and when your assets are distributed to your heirs than can be accomplished with only a Will. A Family Trust may also serve to provide protection from creditors under certain circumstances.

The person for whom the Arizona Family Trust is created is referred to as the settlor of the Trust. The people who will benefit from the Trust are referred to as the beneficiaries of the Trust. While the person responsible for administering the Family Trust, pursuant to the terms of the Trust, is referred to as the Trustee.

A Family Trust in Arizona may be either revocable or irrevocable. A Revocable Trust allows a person to revoke the Trust entirely and to then place the Trust assets back into his or her individual name. An Irrevocable Trust, however, precludes the person who created the Trust from revoking the Trust or removing the Trust property from the Trust.

A large majority of people choose to create a Revocable Trust. The small minority of people who choose an Irrevocable Trust typically do so for complicated financial and tax reasons, which are beyond the scope of the information provided on this website. The creation of a Revocable Trust, however, does not avoid estate taxes that may be assessed if your estate exceeds the permissible estate tax exemption amount.

Once created, the assets to be governed by the Arizona Family Trust must be titled into the name of the Trust. This process requires property and financial accounts to be titled into the name of the Trust, as well as a change in the beneficiary designations on life insurance policies and retirement accounts to list the Family Trust as the beneficiary of those assets.

An Arizona Family Trust has several advantages beyond simply avoiding probate court. A Family Trust may protect assets held in the Trust from certain creditors. The Trust also provides a mechanism to manage a person’s assets for the benefit of his or her children in the event that parent were to pass away.

The Family Trust may allow the Trustee to continue to hold and invest assets owned by the Trust for the benefit of the settlor’s heirs, such as children, well into the future such that distribution of the Trust’s assets can be delayed until, for example, children become old enough to responsibly manage the assets they will inherit.

A Family Trust in Arizona affords a person much greater control over how his or her assets are managed and/or disbursed to heirs. For example, a person may choose to withhold disbursement of 100% of an heir’s, such as a child’s, share of the estate until that person reaches a certain age or meets certain requirements, such as graduating from college.

As importantly, a properly drafted and funded Family Trust (i.e., assets are properly titled to the Trust) should avoid family from having to participate in a legal probate court proceeding; thereby saving the family the cost and attorney fees incurred in a probate proceeding.

Please contact our Scottsdale Arizona estate planning lawyers today if you have any questions regarding a revocable family trust in Arizona.

How To Create a Family Trust in Arizona

There are many types of trusts that can be created for you and your family. One of the most popular types of trusts is called a discretionary revocable family trust. This trust will hold your property for the benefit of a family member or beneficiary and be paid out in increments or as a lump sum amount upon your passing. There are also living trusts, charitable trusts, and life insurance trusts. You may consider the following issues when setting up your Arizona Family Trust:

Establish a Trustee. You will be required to appoint one or more Trustees who will be responsible for managing your property and debts held within your Trust.

Establish an Executor. You will be required to name one or more Executors who will be responsible for managing the property and debts of the Trust, as well as to make distributions as directed by the Trust instrument upon your death.

Identify your intended beneficiaries. You will need to determine who your heirs will be, as well as determine whether those heirs will receive all of their inheritance in a lump sum payment and/or transfer of property or over a period of time.

Work with a qualified Arizona estate planning attorney to draft the Family Trust document. These legal documents will outline every aspect of your Arizona Family Trust and will include your directives regarding, among other things, the dates of distributions and the amounts given to the beneficiaries of the Trust.

Funding a Trust. You will need to begin placing the assets you own into the Arizona Family Trust, referred to as “funding” the trust, during your lifetime. Trust assets can be invested and managed by the Trustee.

It is completely fine to update and manage the trust throughout your lifetime. A qualified Arizona estate planning attorney can assist you in modifying the terms of your Family Trust, if necessary.

Using No Contest Provisions in a Will and Living Trust

Many people choose to include a no contest provision to their wills and living trusts. A no contest provision is included to dissuade family members and/or other heirs to contest the validity of the will or trust in an attempt to obtain more than they were allotted in the estate planning documents. A no contest provision helps to resolve that issue by providing that anyone who contests the will and fails to prove their case in court loses some or all of their share of the inheritance.

Inclusion of a no contest provision in Arizona wills have been authorized by statute. However, there is no such statute providing for use of no contest provisions in a Living Trust. Fortunately, the Arizona Court of Appeals in the In re the Shaheen Trust case indicated that a no contest provision in a Living Trust is just as enforceable as in a Will; despite the statute remaining silent as to the use of such provisions in a Living Trust. You may wish to read our article on the In re the Shaheen Trust case for more detailed information about a no contest provision in a Living Trust.

Working With An Arizona Estate Planning Lawyer

Our Arizona estate planning attorneys understand the importance of providing peace of mind to our clients by ensuring their families will be cared for and supported in the event of their passing. Please feel free to contact one of our Arizona estate planning lawyers today regarding any questions you may have regarding establishing your estate plan.

Contact Our Scottsdale Arizona Estate Planning Attorneys

Our Scottsdale Arizona estate planning attorneys are available to answer your questions regarding an Arizona Simple Will, Arizona Long Form Will, Arizona Living Will or a complete estate planning package. Please feel free to call (480)305-8300 to speak to one of our Arizona Wills and Estate Planning attorneys if you need assistance creating your Arizona Will.