This is the foundation of your estate plan. It allows assets owned by the trust to avoid probate and contains your plan for who inherits your property and when they get it after your death. See the discussion of RLT’s that follows this list. This trust can provide life-time asset protection for your spouse and loved ones so that their inheritance cannot be touched by their creditors or by an ex-spouse if a child gets divorced or by a bankruptcy court if a surviving spouse or a child files for bankruptcy.
The heart of you estate plan is the revocable Living Trust (RLT). We believe that almost everyone with substantial assets should have an RLT. The primary reasons people create an RLT are:
a. To provide for the management of their property if they become incapacitated.
b. To avoid the delays, costs and lack of confidentiality of a probate that is necessary when assets remain titled in the name of the deceased. To learn more about Arizona probate law read the article written by Arizona probate attorneys Richard Keyt and his son Richard C. Keyt called “What is an Arizona Probate & When Is It Required?“
c. To keep their financial affairs confidential (probate court documents are open to the public).
d. To provide for the disposition of their assets after death to their family and loved ones either: (i) outright, (ii) over a period of time or (iii) for the life of one or more beneficiaries. The latter choice is best for maximum asset protection for the beneficiary.
e. To protect the inherited assets from the heir’s creditors, ex-spouses and predators. A life-time beneficiary controlled asset protection trust is the best asset protection device a parent can create for children and grandchildren or that any person can create for loved ones. For example, if the Trust is properly drafted and assets are held in Trust and not distributed unnecessarily to a beneficiary, the beneficiary’s creditors (including a bankruptcy court) and predators (ex-spouses, con-men and con-women) can never get the assets. If you have children or loved ones that you want to protect and if they may inherit a lot of money or property, asset protection may be the most important reason to create an RLT.