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Arizona Estate Planning Attorney Giving You the Representation You Need For Life Insurance Trusts
You can’t put a price on peace of mind. Some of the best peace of mind a person can receive is knowing their family and loved ones will be cared for once they’re gone. This is especially true as we enter our golden years and worry about what will happen to those closest to us when we’re no longer here. Many people aspire to leave behind money and assets to their families as their last act of love and devotion. In some instances, this can be difficult.
Debt, probate laws, and unscrupulous claimants to your estate can all stand in the way of your loved ones inheriting precisely what you want them to inherit. A life insurance trust can be vital to your estate planning. A life insurance trust is an excellent way to ensure your loved ones receive financial benefits after you’re gone without worrying about your money potentially going where you don’t want it to.
What is a Life Insurance Trust in Arizona?
A life insurance trust is a special type of trust meant to ensure your beneficiaries receive maximum financial benefits from a life insurance policy. In a standard trust, the owner of assets called a guarantor, would transfer those assets into a trust. These assets then become the legal property of the trust manager, called a trustee. This means that when the guarantor passes away, there are no legal concerns regarding the ownership of the assets in the trust because they legally belong to the trustee. The trustee will then distribute the assets in the trust according to the guarantor’s wishes.
The same is true for a life insurance trust. With a life insurance trust, the guarantor is the named insured. The beneficiary will be the life insurance trust, as opposed to any individual person or persons. When the guarantor passes away, the money from the life insurance policy transfers into the trust. From there, it can be distributed by the trustee according to the wishes of the guarantor as laid out in either a will or some other trust documents.
What are the Benefits of a Life Insurance Trust in Arizona?
There are multiple benefits to having a life insurance trust in Arizona. This is because the money in the trust will go directly to the individuals designated to the trustee. Benefits to having a life insurance trust in Arizona include but are not necessarily limited to:
- Protection from Unexpected Claimants
- Protection from Probate
- Protection from Creditors
- Reduced Estate Taxes
- Guarantee of Distribution
Because the money in a life insurance trust will go to the trustee, this prevents it from entering the probate process. It also means that the funds can only be distributed according to the instructions given to the trustee. This means you can have the guarantee of your money going only to the people you wish it to go to.
Sometimes, people who pass away without specifying where all of their money will leave the door open for unexpected claimants. These can include distant relatives or even former spouses. With a life insurance trust, the funds will only go to the beneficiaries specified in your instructions. Money in a life insurance trust is also protected from creditors and can help reduce any estate taxes.
Who Should Have a Life Insurance Trust in Arizona?
Anyone can benefit from having a life insurance trust in Arizona. However, certain individuals might benefit more than others. Individuals with large estates can especially benefit. This is because a person’s estate may be worth more than the federal tax exemption. Having a life insurance trust can help reduce or eliminate any estate taxes your beneficiaries may have to pay.
The same is true for business owners. Having a life insurance trust can prevent your heirs from potentially selling or liquidating your business to pay estate taxes. A life insurance trust can also be beneficial if you’re afraid your estate may face lawsuits after you’re gone.
Sometimes, individuals will wait until someone has passed away to file a lawsuit against them. This is done in the belief that it will be easier to collect money from a deceased’s estate than to try taking them to court while they are still alive. This could lead to your loved ones having to fight a court battle on your behalf. Having a life insurance trust can help circumvent this by placing money outside the scope of a lawsuit.
Ultimately, anyone who wants to ensure the financial security of their friends and loved ones after they are gone can benefit from a life insurance trust. An experienced attorney can help you make this decision and ensure those closest to you are protected.
What Should I Do if I Want a Life Insurance Trust in Arizona?
A life insurance trust is the perfect way to help ensure those who matter most are protected after you’re gone. If you or a loved one are currently considering setting up a life insurance trust in Arizona, don’t hesitate to contact The Dodds Law Firm, PLC, located at 14780 W Mountain View Blvd Suite 111, Surprise, AZ 85374.
The attorneys of Dodds Law Firm, PLC believe in protecting those closest to us and making sure they’re cared for after we’re gone. They have extensive experience in estate planning and probate law and approach every client and case with sensitivity and understanding. They know that estate planning can be challenging and want everyone to enter into it with peace of mind.
One of the best legacies a person can have is making sure their loved ones are cared for after they’re gone. With a life insurance trust, you can make sure that happens. If you or a loved one are considering a life insurance trust, call the lawyers of Dodds Law Firm, PLC, today at 623-267-0026 or email them for a thirty-minute consultation.
