Many of our clients choose a living trust-based estate plan in order to avoid probate. Probate is avoided when assets are titled in the name of a living trust, and not in the trust maker’s names personally. The trust is administered privately by the successor trustees. Once a living trust is created, we go through a process with our clients to make sure that assets are retitled. This includes bank accounts, investment accounts, business interests, and real estate.
Titling Vacation and Second Homes
Many of our clients own a vacation property, in addition to a principal residence. Some of these properties are located within the state of Arizona, but many are located outside of Arizona. It is very important to recognize that a living trust-based plan will avoid probate only if all assets are transferred into the name of the living trust, which includes not only the primary residence, but any additional properties. For properties which are located in the state of Arizona, no matter what county, we are able to assist our clients in preparing and recording deeds to transfer the property to the trust. For properties which are located outside of Arizona, we associate with local counsel to prepare the necessary transfer documents to convey the interest to the client’s trust. The process and the cost varies from case to case, but is relatively nominal compared to the cost of probate.
Why is this such an important step? Even if all of the clients’ Arizona assets have been properly identified and transferred to the trust, probate will not be avoided as to out-of-state assets not held in the trust. A probate proceeding will be necessary in the state where the property is located. Many states have an antiquated and very expensive probate system, which is best avoided. By transferring title of the out-of-state property into the name of the trust, the transfer on death will be handled smoothly and privately by the successor trustee.