Boland Law Group, PLLCPassionately Preserving Wealth™
Irrevocable trusts in Arizona
Irrevocable trust attorneys in Scottsdale
Boland Law Group designs irrevocable trusts for Arizona families: ILITs, SLATs, dynasty trusts, IDGTs, QPRTs, charitable trusts and special needs trusts, drawn by LL.M. partners admitted to the United States Tax Court, on fixed fees published before you call.
What an irrevocable trust is
An irrevocable trust is a trust you cannot freely change or cancel once it is signed and funded. You give up ownership and control of the assets you put into it. In return, when the trust is drafted and funded correctly and you are not a beneficiary, the law treats those assets as no longer yours: they, and everything they earn and grow into, stay out of your taxable estate, and in most cases out of reach of your future creditors.
That trade is the whole point. A revocable living trust avoids probate and holds your plan together, but it removes nothing from your taxable estate, because you can take the assets back at any time. An irrevocable trust can, precisely because you cannot.
Most Arizona families need a revocable trust. Fewer need an irrevocable one, and those who do usually need it for a specific reason: an estate growing toward the federal exemption, a large life insurance policy, a child with a disability, a liability exposure, or a charitable goal. Some irrevocable trusts are also created at death, such as the credit shelter trust inside a married couple's estate plan.
| Question | Revocable | Irrevocable |
|---|---|---|
| Can you change or cancel it? | Yes, at any time | Not freely. Arizona allows limited changes by decanting, agreement or court order |
| Is it in your taxable estate? | Yes | No, when drafted and funded correctly |
| Can your creditors reach it? | Yes | Generally no, unless you can benefit from it |
| Step-up in basis at your death? | Yes | Generally no |
| Gift tax return when funded? | No | Usually, Form 709 |
| Whose income tax return? | Yours | Yours if a grantor trust, the trust's own if not |
Who needs an irrevocable trust, and at what net worth
The reason decides the trust. Net worth matters for the tax-driven trusts and hardly at all for the others.
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Estates at or growing toward $15 million per person
Usually above roughly $10 million for a couple, sooner with a fast-growing business. A SLAT, dynasty trust or IDGT moves future growth out of the estate. See high net worth estate planning.
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Anyone with a large life insurance policy
At any net worth where the death benefit would push the estate over the exemption, or where the proceeds must be kept from a beneficiary's creditors.
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Families with a child or relative who has a disability
A special needs trust preserves eligibility for SSI and AHCCCS benefits. The family's net worth is not the test.
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Physicians, developers and owners with liability exposure
Protection is planned years before any claim, through entities or a trust sited in another state.
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Owners of a highly appreciated asset with a charitable goal
A charitable remainder trust can sell the asset without immediate capital gain and pay the family an income stream.
In 2026 the federal estate, gift and generation-skipping transfer tax exemption is $15,000,000 per person and $30,000,000 for a married couple, indexed from 2027 with no scheduled sunset. Above it the rate is 40 per cent. Arizona adds no estate or inheritance tax. So a couple with $20 million owes nothing today, yet at 6 per cent growth would be about $15 million over the indexed exemption in twenty years.
We advise clients across the Valley, most often from Scottsdale, Paradise Valley and North Scottsdale. Family office staff and financial advisors can bring us a matter directly.
The irrevocable trusts we draft
Eight instruments, each built for one job. Where a full page or article exists, it is linked. Every fee is a published 2026 minimum.
Irrevocable life insurance trust (ILIT)
The trust owns the policy, so the death benefit lands outside your estate, and for a married couple outside both estates, and is available to pay tax or buy illiquid assets from the estate. Premiums are gifted to the trust and kept inside the annual exclusion through Crummey withdrawal powers, which the trustee documents with written notices each year. An existing policy is screened for the transfer-for-value rule and the three-year rule of IRC § 2035 before it moves.
From $7,500 single life, $10,000 survivorship
Spousal lifetime access trust (SLAT)
One spouse gives assets to a trust for the other spouse and the children. The assets and their growth leave both estates, while the household keeps indirect access through the beneficiary spouse. In Arizona the gift should come from separate property, which usually means a written partition of community property first. A second SLAT for the other spouse must be materially different, or the two can be treated as reciprocal and pulled back in.
From $35,000 one spouse, $40,000 non-grantor (SLANT)
More: SLATs for Arizona families and the full analysis
Dynasty and GST trusts
A trust built to last for generations, with generation-skipping transfer exemption allocated when it is funded, so its assets pass to children, grandchildren and beyond without estate or GST tax at each death. The GST exemption is $15,000,000 per person in 2026 and is not portable between spouses: it is allocated in life or at death, or it is lost. Arizona lets the trust run for 500 years.
From $40,000
More: Dynasty trusts in Arizona and the full analysis, and children's trusts for lifetime planning
Intentionally defective grantor trust (IDGT)
An irrevocable trust that is outside your estate for estate tax purposes but yours for income tax purposes. You pay the trust's income tax, which the IRS does not treat as an additional gift (Rev. Rul. 2004-64), so the trust grows without paying its own income tax. Paired with an installment sale for a note at the applicable federal rate, it freezes the value of a business or real estate and moves the growth above the note rate.
From $35,000 trust, $60,000 with an installment sale
Qualified personal residence trust (QPRT)
You give your home or second home to the trust and keep the right to live in it for a term of years. The gift is valued at a discount for the years you keep. Outlive the term and the house, with all its appreciation, is outside your estate; you can stay by paying fair rent, which moves more out of the estate. Die during the term and the house is included in your estate.
From $30,000 per residence
Charitable remainder and lead trusts
A charitable remainder trust pays you or your family an income stream, then passes the remainder to charity, which must be worth at least 10 per cent of the trust at funding on IRS tables. It can sell a highly appreciated asset without immediate capital gain, with a partial income tax deduction at funding. A charitable lead trust reverses the order and can move the remainder to your children at little or no gift tax cost.
From $35,000 remainder trust, $50,000 lead trust
Special needs trusts
A third-party special needs trust, funded by parents or grandparents, supplements a beneficiary's care without disqualifying them from SSI or AHCCCS, and nothing is owed back to the state. A first-party trust holds the beneficiary's own money, such as a settlement or inheritance, must be established while the beneficiary is under 65, and must reimburse AHCCCS from what remains at the beneficiary's death, up to the benefits paid, under 42 U.S.C. § 1396p(d)(4)(A).
From $6,000 third-party, $9,500 first-party
Asset protection trusts
Arizona has no domestic asset protection trust statute. Under A.R.S. § 14-10505, your creditors can generally reach whatever a trustee could pay to you, so a trust you create for yourself here protects little. Protection for you is structured through entities, or through a trust sited in a state with such a statute, such as Nevada or South Dakota, with local counsel there; how an Arizona court would treat that trust is not settled. Trusts you create for your children are different: a spendthrift clause under A.R.S. § 14-10502 protects their shares from most of their creditors. A transfer made to hinder, delay or defraud a creditor, present or future, can be undone under A.R.S. § 44-1004, so this work comes before a claim.
From $35,000 out-of-state structuring
How irrevocable trusts work in Arizona
Federal tax law decides what a trust saves. Arizona trust law decides how long it lasts, how it can change and whom it protects.
No state estate or inheritance tax
Arizona levies neither, and taxes a resident trust's income at a flat 2.5 per cent. For Arizona residents and Arizona property, the only transfer tax the trust is designed around is the federal one.
A.R.S. § 43-1311
Trusts may last 500 years
Arizona's rule against perpetuities lets a trust interest stay unvested for 500 years, so a dynasty trust drafted here can serve many generations without a forced ending.
A.R.S. § 14-2901(A)(2)
Irrevocable is not unchangeable
A trustee with discretion to make distributions can decant an old trust into a new one without court approval. Interested persons can settle many trust questions by agreement, and a court can modify a trust with the consent of all beneficiaries or for circumstances the settlor did not anticipate. Each change is screened first for gift and GST tax effects. See trust modification and decanting.
A.R.S. §§ 14-10819, 14-10111, 14-10411, 14-10412
Protection for heirs, not for yourself
Arizona enforces spendthrift clauses, so a trust for your children can shield their inheritance from most of their creditors, with narrow exceptions such as child support. A trust you can benefit from yourself generally stays reachable by your own creditors.
A.R.S. §§ 14-10502, 14-10503, 14-10505
The risks, and the tax filings that come with them
An irrevocable trust is judged years later, by an IRS examiner reading the returns. We draft for that reading. Both partners are admitted to the United States Tax Court, and the firm keeps an active tax controversy practice.
- Keeping too much
A retained right to income, use or control, such as living rent-free in a house you gave away, pulls the assets back into the estate under IRC §§ 2036 and 2038.
- Funding from community property
A gift of community funds is treated as made half by each spouse, so the beneficiary spouse has funded part of their own trust, which can pull that part back into their estate. The partition comes first.
- Mirror-image trusts
Two spouses' trusts with matching terms can be uncrossed under the reciprocal trust doctrine, United States v. Estate of Grace, 395 U.S. 316 (1969).
- Skipped administration
Missed Crummey notices lose the annual exclusion, and a commingled account or a missed note payment gives the IRS grounds to disregard the arrangement.
- Giving away the wrong assets
Assets in an irrevocable trust generally get no step-up in basis at death (IRC § 1014; Rev. Rul. 2023-2). The plan gives growth assets and keeps low-basis ones, and a swap power lets them come back before death.
- The wrong trustee
A grantor who serves as trustee with discretion over distributions risks inclusion. Independent trustees hold those powers.
| Filing | When | Who |
|---|---|---|
| Form 709, gift tax return | April 15 after the year of the gift | Your CPA, from our reporting memorandum |
| Form 1041 and Arizona Form 141AZ | Each year it has income, for a non-grantor trust | The trust's CPA |
| Grantor trust reporting | Each year, on your own return | Your CPA |
| Crummey notices | Each time a gift is made | The trustee, or our office from $1,500 a year |
| Form 706, estate tax return | Nine months after death, six-month extension available | The executor and CPA, with our counsel |
| Form 8971, basis reporting | Within 30 days after the Form 706 is due or filed, whichever is earlier | The executor and CPA |
We do not prepare gift tax returns. Every gift-driven engagement includes a memorandum for your return preparer covering adequate disclosure, gift-splitting and GST exemption allocation.
What one irrevocable trust does for a $26 million estate
Consider a Scottsdale couple with $26 million. Under today's $30 million combined exemption they would owe nothing if both died tomorrow. But at 6 per cent growth their estate more than triples in twenty years, and the exemption, indexed at 2.5 per cent, does not keep up.
In 2026 one spouse gives $12 million of separate property to an intentionally defective grantor trust (IDGT) for the children, with GST exemption allocated. The gift uses $12 million of exemption at today's value. Everything the $12 million earns after that, about $26.5 million by year twenty, is never subject to estate tax at either death.
Two more effects are left out of the ledger, and both favor the plan. The couple pays the trust's income tax each year, which shrinks their estate further without counting as a gift. And because GST exemption was allocated, the trust can pass to grandchildren without estate or GST tax at the children's deaths. The trade: the trust's assets get no step-up in basis, which the swap power addresses.
The exemption figures come from the 2025 tax law. See our notes on the exemption changes and why planning still matters.
| Line | Amount |
|---|---|
| Without an irrevocable trust | |
| Estate today | $26,000,000 |
| Estate at the second death, 6 per cent growth | $83,390,000 |
| Combined exemption at year twenty, 2.5 per cent indexing | $49,160,000 |
| Taxable | $34,230,000 |
| Federal estate tax at 40 per cent | $13,690,000 |
| With a $12 million IDGT, funded in 2026 | |
| Gift to the trust, GST exemption allocated | $12,000,000 |
| The trust at year twenty, outside both estates | $38,490,000 |
| Estate at the second death, $14,000,000 grown twenty years | $44,900,000 |
| Combined exemption at year twenty | $49,160,000 |
| Less the exemption used by the 2026 gift | ($12,000,000) |
| Exemption left | $37,160,000 |
| Taxable | $7,740,000 |
| Federal estate tax at 40 per cent | $3,100,000 |
Federal estate tax kept by the family in this example. On our published schedule the trust costs from $42,500: the $35,000 IDGT minimum plus $7,500 for the $4.5 million funded above the included $7.5 million, at $1,500 per $1 million or part.
What an irrevocable trust costs in Scottsdale
We publish our fees. Every irrevocable trust on this page is priced on the firm's Advanced Planning and Lifetime Wealth Transfer schedule, which you can read before you call.
Each figure is a minimum, fixed in a written engagement letter before work begins. It covers design, drafting, signing and funding of the first $7.5 million; each additional $1 million or part adds the stated figure. Work done inside 45 days, late in the year, or with hard-to-value assets takes a published loading. Appraisals and out-of-state counsel pass through at cost.
The irrevocable trust usually sits on top of a core plan: a revocable trust, pour-over will and powers of attorney, priced on the core schedule. Our 2026 Arizona estate planning cost guide explains both.
| Trust | 2026 minimum | Each added $1M |
|---|---|---|
| Tax and wealth transfer | ||
| ILIT, single life | $7,500+ | $750 |
| ILIT, survivorship | $10,000+ | $750 |
| SLAT, one spouse | $35,000+ | $1,500 |
| SLANT, non-grantor SLAT | $40,000+ | $1,500 |
| IDGT | $35,000+ | $1,500 |
| Installment sale to a grantor trust | $60,000+ | $2,000 |
| QPRT, per residence | $30,000+ | $1,000 |
| Standalone GST or dynasty trust | $40,000+ | $1,500 |
| Charitable remainder trust | $35,000+ | $1,000 |
| Protection and care | ||
| Asset protection, out-of-state structuring | $35,000+ | $1,500 |
| Special needs trust, third-party | $6,000 | None |
| Special needs trust, first-party | $9,500+ | None |
| Existing trusts | ||
| Decanting | $10,000+ | $1,000 |
| Nonjudicial settlement or modification | $5,000+ | $500 |
| Crummey administration, per year | $1,500 | None |
Minimums from the published 2026 schedule, before timing and asset loadings. Where this table and the schedule differ, the schedule controls.
Irrevocable trust questions Scottsdale families ask
What is the difference between a revocable and an irrevocable trust?
You can change or cancel a revocable trust at any time, so its assets stay in your taxable estate and within reach of your creditors. An irrevocable trust cannot be freely changed, and in exchange its assets and their growth are generally outside your estate. Most Arizona plans use a revocable trust as the foundation and add an irrevocable trust for a specific tax, insurance, disability or protection goal.
Do I need an irrevocable trust if my estate is under $15 million?
Often not for estate tax, since the 2026 federal exemption is $15,000,000 per person and $30,000,000 for a couple. But a growing estate can cross that line by the second death, and special needs trusts, charitable trusts and many ILITs serve goals beyond estate tax.
Can an irrevocable trust be changed in Arizona?
Within limits. A trustee with discretion to make distributions can decant the trust into a new one without court approval under A.R.S. § 14-10819. Interested persons can resolve many matters by nonjudicial settlement agreement under § 14-10111, and a court can modify the trust with the consent of all beneficiaries under § 14-10411 or for unanticipated circumstances under § 14-10412. Each change is reviewed first for gift and GST tax effects.
Does an irrevocable trust protect assets from creditors in Arizona?
A trust you create for others, with a spendthrift clause, generally protects their shares from their creditors, with narrow exceptions such as child support. A trust you create for yourself generally does not: Arizona has no domestic asset protection trust statute, and under A.R.S. § 14-10505 your creditors can reach what the trustee could pay you. Self-protection is structured through entities or a trust in another state, before any claim arises.
Do assets in an irrevocable trust get a step-up in basis at death?
Generally no, if the trust is outside your estate. IRC § 1014 gives a step-up only to property acquired from a decedent, and in Rev. Rul. 2023-2 the IRS confirmed that assets of an irrevocable grantor trust left out of the estate do not qualify. A swap power lets you exchange low-basis assets back into your estate for cash or high-basis assets of equal value before death, so they receive the step-up.
Who pays income tax on an irrevocable trust?
It depends on how the trust is drafted. For a grantor trust, you report the income on your own return and pay the tax, which further reduces your estate. A non-grantor trust files its own federal Form 1041 and Arizona Form 141AZ, and in 2026 reaches the top 37 per cent federal bracket above $16,000 of taxable income.
How much does an irrevocable trust cost in Scottsdale?
On our published 2026 schedule, a third-party special needs trust starts at $6,000 and a single-life ILIT at $7,500. A SLAT or IDGT starts at $35,000 and a dynasty trust at $40,000, each including the first $7.5 million funded. The fee is fixed in a written engagement letter before work begins.
Can I be the trustee of my own irrevocable trust?
Usually not with discretion over distributions, because that power can pull the assets back into your estate under IRC §§ 2036 and 2038. A spouse, adult child or trusted advisor can often serve with distributions limited to health, education, maintenance and support, with an independent trustee holding any broader discretion.
Start with a conversation.
Bring your balance sheet, your existing documents and the names of your advisors. We will tell you whether an irrevocable trust belongs in your plan, which one, and what it costs, before you decide anything. The partner who drafts it is the one who would answer an IRS notice about it, and our trust administration practice supports your trustee after funding.
15100 N. 78th Way, Suite 203
Scottsdale, Arizona 85260
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General information about federal and Arizona law as of September 2026, not legal or tax advice for any particular person. Exemption figures are the 2026 amounts under the Internal Revenue Code as amended in 2025. Fee figures are minimums from the firm's published 2026 schedule, before loadings. Passionately Preserving Wealth is a trademark of Boland Law Group, PLLC.