A trust is an entity (like a corporation) established to hold and manage property. It has its own separate existence apart from the grantor or creator of the trust. Trusts can be established during one’s lifetime (a “living” trust) or they can be established at death through a will (a “testamentary” trust). Living trusts can be either revocable or irrevocable. There are three major participants to a trust: a grantor who is the person creating the trust (sometimes called a “settlor” or “trustor”); a trustee who is the person who manages the trust; and a beneficiary who gets the benefits of the trust. Dividing the benefits from the control can be a powerful concept. It allows us to place a responsible individual or institution in charge of the assets for someone else’s benefit. A revocable living trust is the most commonly used vehicle for estate planning today. At the death or incapacity of the grantor, the trust continues on and the backup trustees simply carry out the grantor’s wishes set forth in the trust without probate or court involvement.
A revocable living trust continues on upon the death or incapacity of the grantor, and the backup trustees simply carry out the grantors wishes set forth in the trust. Since the trust does not die or become incapacitated, no probate is necessary to authorize a person to act in the deceased or incapacitated person’s place, without court intervention. The trust is totally revocable and amendable by the grantor during his or her lifetime. Since the grantor usually serves as the trustee and beneficiary during lifetime, the grantor also maintains total control over the assets.
Summary of Revocable Living Trust Benefits:
(1) Avoids probate at death
(2) Avoids multiple probates if you own assets outside of Arizona
(3) Avoids Conservatorship during lifetime
(4) Avoids Conservatorship for minors who might have received the assets
(5) Provides privacy
(6) Often allows quicker distribution of assets (especially in smaller estates)
(7) Prevents unintentional disinheriting
(8) More difficult to contest than a Will
(9) Provides complete control to you during your lifetime, including ability to cancel or amend
(10) Through proper planning, estate and gift taxes can be lowered and potentially avoided entirely through use of a trust.