Beneficiary Controlled Asset Protected Trust Questionnaire

Date(Required)

Beneficiary Controlled Asset Protected Trust (BCAPT)(Required)

The purpose of this questionnaire is to collect the information Arizona estate planning attorneys Richard Keyt and his son Richard C. Keyt need to create one or more irrevocable trusts that hold assets contributed to the trust by one person or a married couple that will be held and administered by one trustee or two or more co-trustees for one beneficiary for the beneficiary's entire life. Assets owned by the trust will be protected from the beneficiary's creditors. ex-spouses, and a bankruptcy court. Trust assets distributed out of the trust to the beneficiary lose all asset protection.

Note: The trust will be an irrevocable trust, which means that the terms and conditions of the trust cannot be amended and the trust cannot be terminated except for limited circumstances stated in the trust agreement.

Services We Provide(Required)

We provide the following services when hired to form one BCAPT for $3,500 and $1,000 for each additional BCAPT:

1. Office consultations and phone calls to plan, design and sign the trust.

2. Prepare an irrevocable trust agreement for the benefit of one person. If you buy more than one BCAPT we prepare a trust agreement for each beneficiary so each beneficiary will have a trust that has only that person as the beneficiary.

3. Prepare a certification of trust for each trust that the trustee can give to third parties such as banks to prove the existence of the trust, the name(s) of the trustee(s), the name of the trust, the date of the trust and the powers of the trustee(s).

4. The trust maker(s) and trustee(s) will sign the Trust Agreement and the Certification of Trust in our office or sign digitally using DocuSign.

5. Give each signer a digital pdf copy of the fully signed Trust Agreement and Certification of Trust.

6. Prepare a "Crummey" notice to send to the beneficiary when the trust maker transfers the initial assets to the the trust. This notice is necessary so the gift will be a current rather than a future gift so the trust maker can use his or her federal gift tax exemption to avoid paying gift tax.

7. Obtain a federal employer ID number for the trust from the IRS unless the trust maker(s) rather than the trust is liable to pay the federal and state income tax on the trust's income.

8. Prepare a summary of the trust that explains to the beneficiary and trustee how the trust works.

Is This Your First Questionnaire for a BCAPT?(Required)

Yes

No, I submitted a BCAPT questionnaire another beneficiary earlier.

How Many People are Creating the BCAPT?(Required)

One person who is single

One person who is married

Two people who are married to each other

How Many BCAPTs Do You Want Us to Create?(Required)

One for $3,500

One for $2,500 because you prepared my estate plan with a trust

Two for $4,500

Three for $5,500

Four for $6,500

Five for $7,500

You Must Complete Additional Questionnaires

Because you want us to create more than one BCAPT you must complete and submit a separate BCAPT questionnaire for each beneficiary. Only one beneficiary can be the beneficiary of a BCAPT.

What is the Trust Maker's Name on the Prior BCAPT Questionnaire?

Information About the Trust Maker (Creator) of the Trust

Trust Maker's Legal Name on Driver's License or Passport(Required)

Prefix First Middle Last Suffix

Trust Maker's Gender(Required)

Female

Male

Trust Maker's Phone Number(Required)

Trust Maker's Email Address(Required)

Enter Email Confirm Email

Trust Maker's Mailing Address(Required)

Street Address Address Line 2 City State ZIP Code

Information About the Second Trust Maker (Creator) of the Trust

Second Trust Maker's Legal Name on Driver's License or Passport

Prefix First Middle Last Suffix

Second Trust Maker's Gender(Required)

Female

Male

Second Trust Maker's Phone(Required)

Second Trust Maker's Email Address

Enter Email Confirm Email

Trust Maker, Trustee & Beneficiary Information

Name of the Trust(Required)

What is the name of the trust?

About Trust Makers(Required)

The person who creates the trust is referred to as the “trust maker,” “trustor,” “settlor” or “grantor.” All of these terms mean the same thing, i.e., the person who creates the trust. Throughout this questionnaire we use the term “trust maker.” Sometime a husband and wife are both trust makers.

About Trustees(Required)

The person, bank or trust company that has the legal obligation to manage all of the assets owned by the trust and make distributions to or for the benefit of the beneficiary is called the "trustee." If the trust agreement names multiple trustees they are referred to as co-trustees, each of whom has fiduciary duties to administer trust assets and carry out the instructions stated in the trust agreement. Trustees must be age eighteen or older.

The beneficiary can be the trustee of his or her trust if he or she is 18 or older and you believe he or she is able to make good decisions. Take care in naming a trustee who is not the beneficiary. Trustees who are not the beneficiary owe fiduciary duties to the beneficiary and can be sued if he or she violates a duty or causes the value of trust assets to decline because of bad investment actions. For more about Arizona trustee duties read an excellent article called "Fiduciary Duties of Trustees."

About Successor Trustees(Required)

A successor trustee is a person age 18 or older, a bank or a trust company that becomes the trustee if all current trustees die, resign, or become unable to perform the duties of the trustee.

About the Current Beneficiary(Required)

The person who benefits from the trust now and gets distributions of trust assets now is the current "beneficiary." If the current beneficiary dies the future beneficiary or beneficiaries named in the trust agreement become the current beneficiary or beneficiaries entitled to receive distributions of trust assets.

Current Beneficiary

Current Beneficiary's Legal Name(Required)

Prefix First Middle Last Suffix

Current Beneficiary's Relationship to Trust Maker(s)(Required)

Current Beneficiary's Gender(Required)

Female

Male

Current Beneficiary's Birth Date(Required)

Is the Current Beneficiary Age 18 or Older?(Required)

Yes

Future Beneficiary or Beneficiaries

If the Current Beneficiary Dies Who Will Become the Replacement Current Beneficiary or Beneficiaries?(Required)

The current beneficiary's living children equally, but if all the children are deceased then to the current beneficiary's spouse if he/she is married

The current beneficiary's spouse who is married to the current beneficiary at the time of the current beneficiary's death

The current beneficiary's spouse who is married to the current beneficiary at the time of the current beneficiary's death, but if the spouse is deceased then the current beneficiary's living children equally

The current beneficiary's siblings equally

none of the above

Name(s) Future Beneficiary or Beneficiaries(Required)

List each person or entity that will become a beneficiary when the initial beneficiary dies. If there is more than one future beneficiary click on the + symbol at the right of the row to add another row.

Future Beneficiary's Legal Name

Relationship to Beneficiary

Current Mailing Address

Share of trust assets or specific property

What Happens if a Future Beneficiary Dies before the Current Beneficiary?(Required)

The share of the trust that would have gone to the deceased person goes equally to the then living descendants of the deceased person per stirpes.

If the deceased person does not have any descendants the share of the trust that would have gone to the deceased person goes equally to the then living siblings of the deceased person per stirpes.

None of the above

Definition of Per Stirpes

Per stirpes means the trust's assets will be divided into as many equal shares as there are surviving children of the current beneficiary and the current beneficiary's deceased children who left surviving descendants. Each surviving child is allocated one share. The share of each deceased child with surviving descendants is divided in the same manner, with subdivision repeating at each succeeding generation until the property is fully allocated among surviving descendants. A person who is deceased and who left no surviving descendant is disregarded. A person who leaves a surviving ancestor who is a descendant of the designated ancestor is not entitled to a share.

What Happens to the Share of the Trust that Would Have Gone to a Deceased Beneficiary?(Required)

Explain what you want to happen to the share of the trust that would have gone to a deceased beneficiary.

Trustee Information

Information about Initial Trustee(s)(Required)

Provide the requested information for each initial trustee. If you want more than one initial trustee, i.e., co-trustees click on the + icon on the right of the row to add another row.

Trustee's Legal Name

Mailing Address

Email Address

Phone Number

About Successor Trustee(s)(Required)

A successor trustee is a person, bank or trust company named in the trust agreement to become the current trustee if the initial trustee or all initial trustees cease to be a trustee. When a successor trustee accepts the position that person, bank or trust company becomes the current trustee responsible for administering the trust per the terms of the trust agreement.

Information about Successor Trustee(s)(Required)

Provide the requested information for each future trustee. If you want co-trustees to serve at the same time put all names in the same field.

1st Successor Trustee's Legal Name(s)

2nd Successor Trustee's Legal Name(s)

3rd Successor Trustee's Legal Name(s)

Assets to Be Transferred to the Trust

Describe All Assets to be Conveyed to the Trust Now

If no assets will be transferred to the trust now input "no assets at this time" in this field.

Does the Total Value of Assets to Be Transferred to the Trust Now Exceed $15,000/Trust Maker?(Required)

If the value of the initial assets transferred to the trust will exceed $15,000 per trust maker we will prepare a federal gift tax return for the gift so the trust maker(s) do not have to pay any gift tax.

Yes

Federal Gift Tax Implications(Required)

If the value of assets transferred to the trust exceeds $15,000 for one trust maker or $30,000 for two trust makers the the trust maker(s) must file a gift tax return with the IRS and claim a credit for the gift tax applicable to the gift. We will prepare the gift tax return for a fee in addition to the fee for the BCAPT. For assets whose fair market value cannot be determined easily and accurately by a third party verification you must hire a qualified appraiser to prepare an appraisal that establishes the value of the asset. The appraisal will be included with the gift tax return filed with the IRS to verify the value of the gift. You must pay the cost of any appraisals.

Federal Income, Gift & Estate Tax Information

Federal Income Taxation of the Trust(Required)

Because the trust is irrevocable it must: (i) get a federal employer ID number (EIN) (we will get the trust's EIN), (ii) file a tax return on IRS form 1041, and (iii) pay income tax on undistributed income to the IRS. If the trust distributes income to the beneficiary the beneficiary must report the income and pay the income tax on that income. We do not prepare tax returns for trusts. You will have to find an experience CPA to prepare and file the trust's tax return.

Does the Trust Maker Want to Pay the Tax on the Trust's Income?(Required)

Yes. Include language in the trust agreement that will cause the trust maker(s) to be liable to pay federal and state income taxes on the trust's undistributed income each calendar year.

No. The trust will pay the federal and state income tax on its undistributed income.

Tax Basis on Trust Assets When the Trust Maker Dies(Required)

Federal income tax law provides that if a property owner dies, the tax basis of the owner's property increases or decreases to the fair market value of the decedent's property as of the date of death or the alternate valuation date. If the trust maker gives an asset to the trust that has a tax basis of $100,000 and the asset is worth $200,000 on the date of the trust maker's death, the tax basis of the asset is either (i) $200,000 if the trust maker retains certain control over the asset in the trust (stepped up basis, or (ii) $100,000 if the trust maker does not retain any control over the asset (no stepped up basis).

If the property is sold for $200,000 immediately after the trust maker's death the federal income tax consequences are: (i) no taxable gain when the basis is stepped up to $200,000 because the $200,000 amount realized minus the $200,000 tax basis = $0 gain, or (ii) $100,000 of taxable gain because the $200,000 amount realized minus the $100,000 tax basis is $100,000. The benefit of the stepped up basis is it reduces the taxable gain on a sale of the asset after the death of the trust maker.

Do You Want the Assets in the Trust to be Included or Excluded from the Trust Maker's Estate When the Trust Maker Dies?

I want the assets the trust maker transfers to the trust to get a stepped up tax basis on the death of the trust maker which means the trust agreement will contain language that causes the value of the assets in the trust to be added to the value of the trust maker's assets after his or her death. The consequence of this are: (i) the trust gets to increase the tax basis of the asset(s) given to the trust by the trust maker to the fair market value of the assets as of the date of the trust maker's death, and (ii) if the value of the trust maker's estate exceeds the federal estate tax exemption amount the trust maker will owe estate tax on the value of the trust assets included in the trust maker's estate. For people who die in 2021 - 2026 the estate tax exemption amount is $11,700,000 adjusted for inflation after 2021. For people who die after 2025 the exemption amount decreases to $5,600,000 adjusted for inflation since 2018.

I do not want the assets the trust maker transferred to the trust to get a stepped up basis on the trust maker's death. Do not insert any language in the trust agreement that would cause the value of the assets in the trust to be added to the trust maker's assets after his or her death when determining if the trust maker's estate owes any federal estate taxes. This means that if the trust sells any of the assets contributed to the trust by the trust maker after the trust maker dies the trust may incur taxable income that could have been avoided if the assets had gotten a stepped up basis equal to the value of the assets on the trust maker's death.

Do You Have any Additional Information for Us?(Required)

Yes

Additional Information

How to Pay Your Fee(Required)

Go to our secure online order page to pay your fee with your major credit card. You may also call our legal assistant Michelle Watkins at 480-664-7413 and give her your credit card information.

You Are Done(Required)

Thanks for filling out our Questionnaire. When you click on the submit button we will send you a copy of the questions and answers you entered. If you don't see the Questionnaire in your in box check your spam folder. If you do not get the email contact Michelle at 480-664-7413 or [email protected] and ask her to resend the Questionnaire to you. When you get the Questionnaire please review it and if you find a mistake or want to change anything send us a reply email with the corrections and changes.