Revocable Living Trusts
Revocable living trusts are a highly flexible living trust that allows you to plan for a successor trustee to take over if or when you are no longer mentally able to control the trust. It is created during the grantor’s lifetime, and it may be altered or terminated (revoked) by the trustor at any point before he/she passes. While a revocable living trust allows the grantor to remain in control of assets, they are considered personal assets legally. Certain taxes still apply and there is little protection from creditors. In Arizona, which does not have estate or inheritance tax, a living trust is a private document and not recorded with the state.
Notes of interest about revocable living trusts:
- Assets can be added after the trust is established. An assignment of personal property is used to add jewelry, furniture, and other tangible personal effects. For assets like bank accounts, a form assigning the account to the trust is filed with the banking institution.
- Keep a list of accounts with any lists of assets and liabilities to help your successor trustee in the future.
- Unless spouses wish to keep assets separately, they can create a single trust together as co-grantors and co-trustees.
- Common assets placed in revocable living trusts may include real estate, bank accounts, personal property, certain investments, and vehicles.
Single people, families with young children, and people who are likely going to need to adjust the scope of the trust may benefit the most from this arrangement. It is highly recommended to talk with your estate planner to determine if a revocable living trust is the right estate planning tool for your specific needs.