A "Secret" Benefit of a Living Trust.
Many people I meet with do not know a "secret" benefit of creating a living trust in Arizona. Every estate plan including a trust should be drafted with this secret taken into consideration. After learning the secret, clients are even more excited about the benefits of their trust.
This secret is how a trust avoids "living probate" in addition to "death probate." Neither "living probate" nor "death probate" are legal terms, but they aptly describe two times the court and government normally step in to "protect" our interests.
Most everyone has heard of "death probate" when a person dies. Avoiding this probate is good because the Arizona Superior Court process is slow, public, and can be very expensive. There have been many books and articles written on the subject, and this is a primary reason why Arizonans create a trust.
The "secret" of avoiding "living probate" excites my clients when I design their estate plan!
Avoiding "living probate" is another very compelling reason to have a trust in Arizona. Consider what happens if you are severely injured in an accident and suffer serious brain damage, or more commonly you gradually loses the ability to make financial decisions due as you grow old. You are"incapacitated" and the court and government step in to "protect you."
When you are incapacitated, a loved one or any interested party can go to probate court and petition to be appointed "conservator" of your money and assets. Nursing homes have sought to be appointed conservator. Even if your family agrees, they will have to spend thousands of your money and take unnecessary time, increasing the burden on those caring for you. When there is disharmony in a family or there are significant assets, the decision of who gets to control your money is often contentious and will cost thousands to tens of thousands more.
Significantly, you will not be able to tell the court your wishes. Someone that you would never choose yourself may be appointed as your conservator by the court . This living probate is as undesireable as probate after we die.
A properly drafted trust is the answer to the concern about "living" probate court. Your trust will designate the person to control the assets. When you, the owner of the trust become incapacitated, your trusted representative seamlessly step in as successor trustee without court approval or challenge by other "interested" parties.
I was surprised when one client already knew this secret. His cousin was already taking care of a relative that was incapacitated. He saw the benefits of a trust and wanted to avoid "living probate." Having seen that situation, avoidance of "living probate" was very important because he would be living if it happened.
