Arizona trusts play a very important role in estate planning and probate avoidance. And while Arizona trusts are extremely varied, in that there many different types of Arizona trusts for many different purposes, there are a few common elements to Arizona trusts that will help you understand them more completely. To create an Arizona trust, you must deliver legal title of the trust assets to a trustee for the benefit of beneficiaries, with the intent of creating the trust for valid purposes. While this seems simple enough, Arizona trusts can be deemed invalid if they fail to comply with even one of these requirements.
As to the first requirement – delivery – you must actually give the subject matter of the trust to the trustee to properly create an Arizona trust. This means that with the exception of testamentary trusts and certain self-declaration trusts, simply signing the trust instrument is insufficient. And what you deliver must be certain and identifiable – if it is not a valid property interest, it is insufficient to establish a trust. This means that you cannot establish Arizona trusts with mere expectancy interests in property.
Also, you must actually intend for the person to whom you deliver the trust property to hold the property in trust for a beneficiary or group of beneficiaries. Interestingly, for private Arizona trusts, the beneficiaries must be ascertainable, but for charitable Arizona trusts, the beneficiaries cannot be ascertainable. So if you were to establish a trust for non-charitable purposes, you would have to be very clear about whom you appoint as beneficiaries, yet if you were to establish a trust for charitable purposes, you would be prohibited from naming specific individuals as beneficiaries.
Finally, you can only create a trust for valid purposes. Put simply, this means that you cannot create Arizona trusts for any reason that would violate public policy. If you have specific questions about Arizona trusts that exceed the scope of this general description, you really should speak with an attorney.
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