What is a Revocable Living Trust? A Living Trust is a legal document used to plan and organize your estate. A Living Trust can be created when you transfer your property from your individual name to the name of your Trust. You simply re-title your major assets. For example, the deed to your house would be changed from Joe and Mary Smith to The Joe and Mary Smith Family Trust. Control remains with you. By creating a Living Trust, you may save your loved ones thousands of dollars in legal and other fees and unnecessary delays that can go on for months or even years. In addition, you can eliminate many of the emotional strains that can be caused by your death and the settling of your estate.
What does “Revocable” mean? A living Trust can be either revocable or irrevocable. Revocable means you can change or cancel the Trust; irrevocable means the Trust cannot be changed or cancelled. What does “Living” mean? “Living” means the Trust was created while you were living. A Testamentary Trust, effective after death, must go through probate. Why would I want a Living Trust? The main reason is to avoid probate. In the past it was generally thought that one could not be his own trustee and a bank had to be appointed. This has changed; a person can name himself trustee and not use a bank. Living Trusts are now affordable and are rapidly replacing the Will as a way of passing on your estate.
What is probate and why do I want to avoid it? Probate is a process whereby a deceased person’s estate is placed into the court system and is a public record. The court makes sure the debts are paid and property is distributed according to the Will, or in the absence of a Will, in accordance with state law. When possible, you should avoid probate because it is costly, lengthy, and public. The Living Trust completely eliminates the court process.
How much are probate fees? Probate fees vary from state to state and could run as high as 20% of the estate’s gross value or more. In Arizona, attorneys charge by an hourly fee for probate matters not by percentage of the estate’s value.
Who are the parties to a Living Trust? The Trustor: A person who places his assets into the Trust – You! The Trustee: A person who controls the assets of the Trust – You! The Successor Trustee(s): A person selected by you who, upon your death, distributes the assets of the Trust to your beneficiaries in accordance with your instructions (usually your eldest or most competent child).
Does my Will avoid Probate? No. Wills do not avoid probate. Living Trusts avoid probate. Is a Will required if I have a Trust? A special Will called a “Pour Over Will” is drafted along with the Trust. The purpose of this Will is to pick up assets you have not placed in the Trust and “pour” them into the trust at the time of your death and to address any specific needs you have arranged (i.e. funeral arrangements).
Do I have to transfer all of my assets to the Trust? No. But you must transfer all your major assets into the Trust to avoid probate. Assets normally not transferred to the Trust are small checking accounts, automobiles, household items, and personal belongings of nominal value. Do special income tax returns have to be filed for the Trust? No. The Trust has the social security number of the Trustors. No special forms are required as long as husband and wife, or one alone, is receiving the Trust income. Will my Living Trust avoid probate in other states where I own real estate? Yes. All real estate titles in the name of your Living Trust will avoid probate. Without a Living Trust, your family may need to hire an attorney and repeat the probate process in each state where you own real estate.
Attorney Ted Updike has practiced law in Arizona since 1982. Ted is a member in good standing of the American Bar Association, State Bar Association, Maricopa County Bar Association and Arizona Trial Lawyers Association. Although a person doesn’t need to be wealthy to have a trust, he also does not need to be extravagant. Living Trusts are affordable. If you have questions about a Living Trust, call today for a free consultation. If you decide you do not need a Living Trust (based upon the nature and amount of your estate), we will prepare a Will for you at a modest charge.
Estate Planning Fee Schedule:
|Single Will (includes Mental Health and Health Care Power of Attorney, Healthcare Directive and Durable Power of Attorney for Management of Financial Affairs)||
|Single Testamentary Will (includes Mental Health and Health Care Power of Attorney, Healthcare Directive and Durable Power of Attorney for Management of Financial Affairs)||
|Married–Reciprocal Wills (includes Mental Health and Health Care Power of Attorney, Healthcare Directive and Durable Power of Attorney for Management of Financial Affairs)||
|Married–Testamentary Wills (includes Mental Health and Health Care Power of Attorney, Healthcare Directive and Durable Power of Attorney for Management of Financial Affairs)||
|Single Person Revocable Trust Package||
|Revocable A/B Trust Package (Husband and Wife)||
|Revocable A/B/C Trust Package (Blended Family/Large Estate)||$4,000.00 + $250 hourly|
|Review of Estate Documents:
Attorney’s Hourly Rate: $250.00
Legal Assistant’s Hourly Rate: $100.00