Updated June 01, 2022
The Arizona living trust is a document that allows a person to place personal property and/or real estate in a holding the enables the Beneficiary(ies) to bypass the probate process after the trust creator’s death. The creator, or “Grantor,” may still reap the benefits of the assets held within the trust during their lifetime, and, in the case of a Revocable trust, they can designate themselves as Trustee to manage the trust’s day-to-day affairs. Only property that is specifically listed in the trust may be passed on to the Beneficiary.
Duty to Report (ARS 14-10813) – The Trustee is required to report to the Beneficiaries in a timely manner, any information that may help protect their assets. Furthermore, at the request of the Beneficiaries, the Trustee may also be required to report the annual holdings, liabilities, and disbursements.
Laws – Title 14 (Trusts, Estates and Protective Proceedings)
Will (Last Will And Testament) – All property that is owned by the Grantor and is not listed within the Trust should be placed in a “pour-over’ Will and, upon the death of the Grantor, will be subject to the probate process.
Types
Irrevocable – The Grantor(s) benefit from not having to pay certain taxes on the assets within the trust but also cannot change the document after it has been signed.
Revocable – The main advantage is that the Grantor(s) may modify the document at anytime while maintaining the benefit of bypassing the probate process at their death. However, unlike an Irrevocable Trust, a Revocable Trust is not considered a separate entity, and the assets and property placed therein are consequently at the mercy of creditors.
Individual Roles
The four (4) major roles of a Trust are as follows:
Grantor (or “Settlor”) – The individual who creates a Trust in order to transfer real estate or property to the Beneficiary or Beneficiaries. If a Revocable Trust, the Grantor has the ability to designate themselves as the Trustee and alter the trust anytime after it has been created.
Trustee – The Trustee has authorization to manage all assets as determined by the Grantor in the Trust. A Trustee is often the same person as the Grantor.
Successor Trustee – Upon death or incapacitation of the initial Trustee, the Successor Trustee will assume control of the property outlined in the Trust.
Beneficiaries – Person(s) to receive the property and/or real estate describe in the Trust.
How to Make a Living Trust in Arizona
You can create a Trust in Arizona by downloading and completing your preferred document type (Revocable or Irrevocable). Within the form, there should be details regarding the names of the Grantor, Trustee, Successor Trustee, and the Beneficiaries. The Grantor must also list the assets which are to be transferred to the trust. As stated in § 14-10402, the Trust must indicate definitively the Grantor’s intent to create the trust. Note that the same person cannot be the sole Trustee and the sole Beneficiary. The form is only complete after signatures are included. A notary public may need to be present for the signing of the document or they may need to acknowledge it after the fact.
Motor Vehicles – An Arizona Bill of Sale may be used to transfer ownership of an automobile that is to be placed in the Trust.
Real Estate – Real estate which is to be transferred into a trust must be conveyed in an Arizona Deed. The document must be signed by all parties in front of a Notary Public and filed with the County Recorder’s Office.
Websites – Should a website or domain name be placed in a Trust, the owner’s information must be changed with ICANN / WHOIS. This process can be accomplished by altering the settings with your registrar (e.g. GoDaddy, Enom).
Do I Need a Living Trust in Arizona?
According to § 14-3971, if a person does not have at least Seventy-Five Thousand Dollars ($75,000) in net worth, a Living Trust may not be necessary. In these cases, the heirs of the estate may file a Small Estate Affidavit in order to bypass the probate process after the individual’s death, therefore negating the need for a Living Trust.
If the individual does not have at least $75,000 in net worth but still wants to have someone in particular be the beneficiary of an asset or property, or if the Grantor does indeed have a net worth above $75,000, a Living Trust may still have purpose.