Have you considered creating an estate plan in Scottsdale? While estate planning involves many legal documents, wills and trusts often form the foundation of an estate plan. A knowledgeable estate planning attorney can discuss your needs and goals and help you make informed decisions about how to structure an estate plan. Contact Mushkatel, Gobbato, & Kile, P.L.L.C. for a case review with a Scottsdale will and trusts lawyer. We will demonstrate why our personalized service and commitment to results have earned us the respect and trust of our clients.
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Is a Trust Different Than a Will?
Wills and trusts are distinct legal instruments. A will directs the disposition of your assets after your death. A will provides instructions to the executor or administrator of your estate regarding what estate assets to distribute to your beneficiaries. Estate administration under a will occurs during the probate process.
Conversely, trusts are typically established to hold assets for distribution to one or more beneficiaries according to the terms of the trust. A person who creates a trust transfers assets into the trust and establishes instructions for the disbursement of the trust assets. A trustee manages the assets and property transferred into the trust on behalf of the beneficiaries. A revocable trust may be amended or revoked in accordance with the trust’s terms and conditions. Upon the grantor’s death, a revocable trust typically becomes an irrevocable trust. Trusts serve various purposes and have become increasingly popular tools in estate planning.
Are There Other Estate Planning Documents That I Should Consider?
Other standard legal tools that an estate planning attorney might use in developing your estate plan include:
- Power of attorney – This tool allows you to authorize a trusted family member, friend, or other person named to make financial or medical decisions on your behalf if you become incapacitated and cannot make decisions on your own.
- Beneficiary deed – A beneficiary deed designates a person who will inherit a parcel of property upon your death without needing to pass the property through probate. During your life, you retain the right to change or revoke the beneficiary deed and to lease, mortgage, or sell the property.
- Living will – his document allows you to express your wishes or preferences regarding medical and end-of-life care in writing, so that your family members and healthcare providers know what kind of medical care you want if you become incapacitated in a hospital or nursing home.
What Are the Advantages and Disadvantages of a Will or a Trust?
Some of the advantages of creating a will for your estate plan include:
- Having a trusted individual act as the personal representative of your estate to carry out your wishes
- Directing the distribution of your estate assets to the people you designate rather than having Arizona intestacy laws determine the distribution of your estate to family members
- Nominating someone to serve as guardian for your minor children if both you and your spouse/partner/ex pass away
- Preserving flexibility in estate planning, since you can change your will at any time.
However, doing estate planning through a valid will alone has certain potential limitations. For example, passing your wealth through a will requires a time-consuming and potentially expensive court-supervised probate process. Furthermore, the probate process means your estate becomes a matter of public record. You may not want other people to know the extent of your wealth or what kinds of assets you own.
Some of the benefits of trusts include:
- Asset protection – Certain types of trusts offer asset protection, ensuring that a person’s creditors cannot reach assets held in the trust.
- Privacy – Trust administration does not involve a court-supervised process like probate. It allows people to manage and pass down family wealth privately, keeping their financial business out of the public record.
- Avoidance of probate – Assets placed in a trust leave the settlor’s estate, allowing the trustee to distribute those assets to beneficiaries as directed by the terms of the trust without needing to go through the time and expense of probate.
- Tax management – Trusts can help individuals and families manage or mitigate various tax liabilities, such as estate taxes. A trust can help reduce a grantor’s taxable estate.
Disadvantages of using trusts in your estate plan include:
- Giving up ownership of assets – A trust requires you to turn over ownership of the assets you place in the trust to the trustee.
- Less flexibility with future estate planning – Certain kinds of trusts, including irrevocable trusts, provide you with no or minimal ability to change or terminate the trust if your estate planning goals change.
- Ongoing costs – Operating a trust may involve continued expenses, especially if you appoint a professional trustee to manage your trust’s assets.
What Happens If You Die Without a Will?
Should you die without a will in Scottsdale, the assets in your estate will pass to your heirs as designated by the state’s intestate succession law. The law determines which of your family members can inherit from your estate and the portion of your estate each of those family members will receive.
How Often Should a Will or Trust Be Updated?
Estate planning is not something to be done once and forgotten. Your needs and circumstances change throughout your life. You should review your will, trusts, and other estate planning documents to ensure that your legal plans continue to reflect your objectives and preferences.
Ideally, you should review your estate plan every five years or after significant life events, such as:
- Marriage
- Divorce
- The birth or adoption of children or grandchildren
- Acquiring significant assets, such as a primary residence or vacation home
- Receiving a substantial sum of money, such as an inheritance
- Substantial increases in your income due to promotion or a new job
- Starting or selling a business
- Retirement
- The onset of severe illness or disability
- Moving to a new state.
Contact a Scottsdale Will and Trusts Lawyer
Contact Mushkatel, Gobbato, & Kile, P.L.L.C. today for a confidential consultation with a Scottsdale will and trusts lawyer about how these legal tools can support your estate planning goals. Our legal team has over 50 years of combined legal experience guiding clients through the estate planning process. Our law firm provides personalized legal representation in various areas, including estate planning, estate litigation, special needs trusts, charitable trusts, and guardianship/conservatorship. We are proud to offer clients the personalized service of a boutique firm combined with the know-how and resources of a large law firm.
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