Trusts get around probate but still require administration

By December 9, 2010Uncategorized

People sometimes set out to arrange their affairs with the belief that they should avoid probate at all costs.  Another idea people have is that because creating a trust allows them to bypass probate, nobody is charged with the obligations and responsibilities typically left to personal representatives under the Arizona Probate Code.  While it is true, however, that Arizona probate law allows trust assets to pass directly to beneficiaries upon the trustor’s death, trust administration has its own set of obligations and responsibilities.  And, like personal representatives under AZ probate law, trust administrators must abide by strict duties and responsibilities.

Very similar to personal representatives, trustees are required to fulfill their duties carefully.  Among other things, trust administration may include obtaining an appraisal of the trust assets, paying taxes, giving notice to trust beneficiaries, and prudently investing trust assets.  Trustees who fail to exercise their duties properly can be removed from their position, and even held personally liable for waste of trust assets.  In short, while trusts do not pass through probate, those who create trusts must still charge somebody with the responsibility of handling the trust assets.  As such, people should always discuss their situation with an Arizona probate lawyer before deciding to avoid probate by establishing a trust.