Estate planning is a crucial step to take once you’ve acquired any valuable assets. It ensures your property and possessions are transferred according to your wishes after you’ve passed, and it creates a plan for any minor children left behind. A complete estate plan can even keep your family out of court, so all assets transfer smoothly, and so that you do not incur unnecessary court expenses.
When making legal arrangements for how to pass along your assets and possessions, the two most common options are via a last will and testament and a revocable living trust. Read on to determine which is right for you.
The Difference Between a Will and a Trust
The terms “will” and “trust” are familiar to most people, even if they don’t understand the differences between the two. Generally speaking, a last will and testament details your assets, property, possessions and states how they are to be handled after your passing. It names a personal representative to administer the decedent’s estate, and it also names a legal guardian of minor children left behind. A trust, however, details a “trustee” who holds legal title to property on behalf of a “beneficiary” and distributes assets to the beneficiary according to the terms of the trust. Both estate planning devices are useful in different ways and together can create a complete estate plan.
The main difference between a will and a trust is that a will is used only after the death of the testator, whereas the instructions of a trust can take effect before, at or after death. A trust typically has one set of beneficiaries that receives income during the life of the grantor and one set that receives any leftover assets after the grantor has died. Another key difference is a probate action still needs to be filed with the probate court when the decedent only has a will in order to administer the estate, whereas a probate may not be necessary when the decedent had a trust.
Why You Need a Will in Arizona
Writing a will in Arizona is crucial in order for your last wishes to be carried out as you see fit, including the distribution of everything you own from your big-ticket property to smaller keepsake items. If you die without a will, Arizona intestate succession laws govern your estate’s passing to your closest relatives (spouse, children and parents in that order) or to other relatives. The state takes control of your assets if no living relatives are found.
You also must appoint a guardian in your will for any minor children in the event of your untimely passing. Though this is an unpleasant thought to entertain, it is better to be prepared than let the probate court appoint a guardian in a long, draining process. Even after a decision is made, there may be ongoing court oversight of the guardianship.
Why You Need a Trust in Arizona
A revocable living trust allows for the lifetime and postmortem management of your assets. Once you have named your property (real estate, bank accounts and more) in the trust, you can appoint yourself the trustee, or manager. You can then appoint a secondary trustee to take over the management duties if you die or become incapacitated.
If you die with only a will in Arizona, the probate case will be opened, and the personal representative named in the will gets appointed to administer the estate. A revocable living trust, however, is not subject to court approval. It lets your heirs skip the lengthy, costly court process and inherit your assets immediately.
Find an Experienced Arizona Estate Attorney
Once you have set up a well drafted and proper estate plan, it should only require minor updates, if any changes at all. This is the main reason it is important to work with an experienced attorney to get it done correctly the first time around. The attorneys at MacQueen & Gottlieb have significant experience with estate planning in Arizona. Contact us today at 602-562-7218 to schedule an initial consultation or make an appointment online.