Trusts are useful estate planning tools that can serve a wide variety of purposes based on the goals of their creators and the intended beneficiaries. These purposes can range from asset protection to tax planning, and much more. Knowing the types of trusts that will best serve your goals can be a difficult analysis that requires careful consideration of the pros and cons each trust provides.
Our experienced trusts attorneys have the knowledge to prepare and administer them so they help you and your family for generations to come. Learn more below about different types of trusts in Phoenix and contact our office to schedule a free initial consultation.
What Are Some Different Types of Trusts?
The types of trusts can vary based on their purpose, restrictions, powers, and the nature of the beneficiaries. For example, the following types of trusts may be useful for Phoenix residents when establishing their estate and wealth plans:
- Revocable trusts: The creator of the trust retains the ability to modify or revoke the terms of the trust agreement.
- Irrevocable trusts: The creator of the trust loses the ability to later revoke or amend the trust.
- Testamentary trusts: A trust created at the time of a person’s death through their will.
- Irrevocable life insurance trusts: A trust for administering the proceeds of a life insurance policy that may help to reduce estate taxes by separating assets from the insured person.
- Charitable trusts: A trust with a qualifying charity as the named beneficiary or remainder beneficiary, which can provide various income and estate tax benefits.
- Spendthrift trusts: A trust with greater trustee discretion and limits on distributions to protect beneficiaries from creditors and poor financial decisions under A.R.S. 14-10502.
- Special needs trusts: A trust designed to help individuals with disability or long-term care needs maintain eligibility for programs like Medicaid and Social Security.
These different types of trusts will have various similarities but also unique differences that are necessary to achieve their intended goal. All trusts must follow the Arizona adoption of the Uniform Trust Code in A.R.S. 14-10101 to 14-11102, which govern the creation and administration of trusts. Our estate planning attorneys can help you model a trust that complies with these legal standards while meeting your goals.
Determining the Type of Trust You Need
Many different circumstances can influence the type of trust that will serve you and your family. In some cases, you may require multiple trusts to fit a variety of goals. Personal factors such as your family dynamics, net worth, and health are often the first set of conditions our attorneys will consider when recommending a trust for your estate plan. For example, certain types of irrevocable trusts may be beneficial for clients with a high net worth who wish to limit estate tax exposure at their death.
Other goals that could affect your situation could include:
- A desire to maintain control over the assets transferred to the trust
- The relationship of the trustee to the intended beneficiaries
- The financial literacy of the trust beneficiaries
- The need to protect assets from potential creditors and other parties
During our intake process, we carefully consider your intentions to find the right combination of estate planning documents to address your concerns.
Call Our Phoenix Attorneys to Discuss the Merits of Each Type of Trust
Trusts are excellent tools for avoiding probate and maintaining privacy over your financial affairs, both during your lifetime and after death. Each type of trust in Phoenix serves a unique purpose that our attorneys can use to build an estate plan that serves you and those you love. Schedule a free initial consultation with our law firm today to learn what is possible.
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