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A-B Trust Paradise Valley, AZ

The Law Office of Libby Banks > A-B Trust Paradise Valley, AZ

The Law Office of Libby Banks offers a distinctive array of services focused on your financial and estate planning needs in Paradise Valley, AZ. Our committed team of attorneys are dedicated to helping you navigate life’s unpredictability. Our goal is to ensure efficient management of your estate plan, encompassing wills, trusts, and all aspects related to estate planning. We aim to be your dependable ally for the preparation of your future, understanding the importance of power of attorney and embracing practices that assure asset protection.

The Services We Provide

The Law Office of Libby Banks provides a comprehensive suite of services, including the establishment of wills, the creation of A-B trusts, power of attorney, asset protection, guardianship, elder law, conservatorship, and special needs planning. We also specialize in other essential areas, like life insurance, health care directives, long-term care planning, retirement planning, charitable giving, and business succession planning. Regardless of the service provided, our objective remains unchanged – to safeguard your assets, ensure your rights, and secure your loved ones’ future.

A Closer Look at the A-B Trust

An A-B trust, also known as a bypass or credit shelter trust, is a complex estate planning tool frequently used by married couples to reduce estate taxes and maintain control over their assets. It gets its name from the two parts it creates upon the first spouse’s death: the ‘A’ Trust (also known as the “Marital” or “Survivor’s” Trust), and the ‘B’ Trust (also referred to as the “Bypass” or “Credit Shelter” Trust).

In this trust structure, the first spouse’s death divides the estate into two trusts. The ‘A’ Trust holds assets for the surviving spouse’s benefit, and the ‘B’ Trust houses assets up to the estate tax exemption amount. Any remaining estate assets also go into the ‘A’ Trust. The ‘B’ Trust’s assets can appreciate in value and pass on to heirs without being subject to estate taxes.

Our A-B trust attorneys distinguish themselves not only by managing your estate but also by understanding your needs, your family’s needs, and your future aspirations. The benefits of working with us include our comprehensive services, our vast experience, and our tailored approach to each client’s unique situation. These advantages have earned us a strong reputation in Paradise Valley as dependable trust lawyers.

Guide to Trust Formation

Formulating an A-B trust in Arizona requires methodical planning. The journey starts with the creation of the trust document, specifying details that determine the operation of the trust. Following this, a reliable trustee is to be appointed, generally the surviving spouse in the context of an A-B trust, to administer the trust per your directives. The final action includes moving your assets into the trust. Due to the intricate nature of the process, our advice is to consult with the skilled estate planning attorneys at The Law Office of Libby Banks.

The Trust’s Benefits

The trust offers several benefits, especially for couples in Arizona. To begin with, it can potentially lower your estate tax liability. By splitting your combined assets into two trusts upon the first spouse’s death, each of you can fully take advantage of your individual estate tax exemption. On top of that, it ensures the financial stability of the surviving spouse while maintaining control over asset distribution. Additionally, it allows for probate avoidance, thus saving your beneficiaries time and resources.

Trust Limitations

While the advantages of this type of trust are significant, it’s also important to understand its limitations. The trust’s structure can be complicated and might involve higher administrative costs than simpler trust forms. Also, the surviving spouse might face limitations in accessing the assets held in Trust B. This type of trust may not be beneficial for all couples, especially if their estate’s value is below the federal estate tax exemption limit.

What Assets Can You Include?

A broad range of assets can be part of your trust, including real estate properties, bank accounts, stocks, and other possessions of value. A formal transfer is necessary for each asset you want to include in the trust.

Bypassing Probate with the Trust

A key advantage of the trust is its capability to avoid probate. Trust-held assets can directly be handed over to the beneficiaries, sidestepping the need for probate. This streamlines the distribution process and curtails probate expenses.

Understanding the Tax Impact

The primary tax incentive of the trust is the capacity to fully leverage both spouses’ estate tax exemptions. Yet, it’s equally important to consider potential effects on capital gains taxes, especially in relation to the step-up in basis rules.


Estate planning can seem complicated, but our team is here to help guide you through your choices and enable you to make well-informed decisions. Whether it’s creating a trust, composing a will, delegating power of attorney, or using any other estate planning tool, we are wholeheartedly committed to helping you. Connect with us today for a consultation and let’s secure the things that are most valuable to you.

Professional Team Serving Paradise Valley, AZ

The Law Office of Libby Banks brings together skilled attorneys with a commitment to addressing our clients’ needs in Paradise Valley, AZ. We are proficient in a variety of estate planning areas, including A-B trust management, and offer an all-encompassing approach to safeguarding your assets and protecting your loved ones. We urge you to arrange a consultation with us to discover how our experts can guide you through your particular situation. Contact us today at 602-375-6752 or via our website, libbybanks.com, and allow us to assist you in preserving your legacy and ensuring your loved ones’ security.

Frequently Asked Questions

Q: What is the definition of a bypass or A-B trust?

A: A bypass or A-B trust refers to an estate planning mechanism mostly utilized by married couples. When one spouse dies, the trust splits into two parts: Trust A (Survivor’s Trust) and Trust B (Bypass Trust), allowing each spouse to fully use their separate estate tax exemption.

Q: How do I go about forming an A-B trust in Arizona?

A: The process of forming an A-B trust in Arizona requires the drafting of a trust document, the appointment of a trustee, often the surviving spouse, and transferring assets into the trust. Given the intricate nature and compliance requirements related to the process, we recommend consulting with the knowledgeable estate planning attorneys at The Law Office of Libby Banks.

Q: What advantages does an A-B trust provide?

A: A-B trusts offer several advantages, including potential estate tax reductions by fully leveraging both spouses’ estate tax exemptions. They also help avoid probate and ensure the financial stability of the surviving spouse.

Q: What are the potential disadvantages of an A-B trust?

A: The primary disadvantages of an A-B trust include the potential for higher administrative costs and certain restrictions on the surviving spouse’s ability to access the assets within Trust B.

Q: Can I include all assets in an A-B trust in Arizona?

A: Yes, you can incorporate a wide array of assets, such as real estate property, bank accounts, stocks, and other valuable items in your A-B trust. However, formal procedures for transferring these assets into the trust are necessary.

Q: How does an A-B trust contribute to probate avoidance?

A: An A-B trust allows assets held within the trust to directly pass to the beneficiaries, bypassing the probate process. This characteristic accelerates the distribution process and also reduces probate costs.

Q: Is it possible to change the terms of an A-B trust?

A: While certain amendments can be made to Trust A during the surviving spouse’s lifetime, changes to Trust B are generally limited due to its irrevocable nature after the first spouse’s death. For any proposed changes or questions about amending a trust, it’s best to consult with our estate planning attorneys.

Q: How does an A-B trust interface with a health care directive in Arizona?

A: An A-B trust mainly focuses on financial assets, while a health care directive pertains to medical decision-making when you’re incapacitated. Both are essential elements of a comprehensive estate plan.

Q: Does the trustee play a role in managing a health care directive?

A: Generally, no. The trustee of your A-B trust oversees your financial matters, while a separate individual, often referred to as a health care proxy or agent, typically carries out the instructions in your health care directive.

Q: How do I ensure tax law compliance when establishing an A-B trust?

A: It’s crucial to consult professionals to ensure your A-B trust complies with the prevailing tax laws and regulations. Our estate planning lawyers are familiar with these requirements and can guide you through the process.

Q: How can an A-B trust secure my children's inheritance?

A: An A-B trust safeguards your children’s inheritance by isolating the assets of the deceased spouse (Trust B) and preserving them for the beneficiaries, typically the children.

Q: What happens to the A-B trust assets if a divorce occurs?

A: In the event of a divorce, the provisions of the A-B trust may need to be altered, depending on your unique situation. Consult with our estate planning attorneys to understand the necessary modifications and actions.

Q: What locations are serviced by The Law Office of Libby Banks for those inquiring about A-B trusts?

A: Covering an extensive range of locations, The Law Office of Libby Banks offers its services in Paradise Valley, Phoenix, Scottsdale, and neighboring communities within the greater Phoenix region. For more details about our services in these areas or to arrange an appointment, we welcome you to phone us at 602-375-6752 or browse through our website, libbybanks.com.

About Paradise Valley, AZ

Paradise Valley, located within Maricopa County, is one of Arizona’s premier destinations, often hailed for its luxurious resorts, palatial homes, and breathtaking desert landscapes. As its name suggests, this town offers a slice of paradise to those who reside and visit, showcasing the best of the Sonoran Desert’s beauty. The Camelback Mountain stands as a notable landmark, beckoning hikers and adventurers to its challenging trails and rewarding them with panoramic views of the Valley of the Sun from its peak.

In addition to its natural allure, Paradise Valley boasts some of the state’s most upscale dining, shopping, and spa experiences. With a rich tapestry of golf courses, including the renowned Paradise Valley Country Club, golf enthusiasts will find themselves right at home. Meanwhile, art aficionados can immerse themselves in the local art scene, with several galleries and events showcasing the creativity of the region. Beyond its luxurious veneer, Paradise Valley places a significant emphasis on preserving its native landscapes and offers several nature trails, allowing residents and visitors alike to engage with Arizona’s unique flora and fauna. In every aspect, Paradise Valley epitomizes a harmonious blend of luxury and nature, making it a sought-after enclave in the heart of the desert.

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