Arizona Estate Planning

Primer on Different Types of Estate Planning Tools

Examiner.com: The type of trust we most commonly discuss is, without a doubt, the revocable living trust. While revocable living trusts are certainly effective in making sure that your estate avoids a lengthy and expensive probate process, they aren’t an effective way to protect your assets or accomplish other goals. The truth is that trusts and other estate planning tools serve all sorts of purposes. Today we are going to discuss a few of the objectives served by different types of estate planning vehicles. Irrevocable Life Insurance Trusts

If you have a life insurance policy and die, the proceeds will be part of your estate. In some circumstances, this can result in an unnecessary tax liability. You can remove proceeds of life insurance from your estate by placing your policies into an irrevocable life insurance trust (an “ILIT”).

In many cases, ILITs are used both to own life insurance policies and to be the beneficiary of the policies. This gives you the option to make sure that insurance proceeds are held in trust and protected against irresponsible spending, creditors, or ex-spouses. It also means that you can designate proceeds to benefit your spouse, children, grandchildren, or anyone else you want to make sure is cared for.

Continue reading about other estate planning tools.

On the Net2012-01-25T08:53:01-08:00January 25th, 2012|Estate Planning, ILITs|

5 Estate Planning Mistakes You Don’t Want To Make

Mansfield Patch: A wise man once said, “If you don’t die before retirement chances are pretty good you’ll die sometime afterwards”. And while we all know and understand that death is a sad fact of life, we sometimes put off making decisions that will help our loved ones after we’re gone.

When Steve Jobs died last year, many financial pundits wondered whether his advisors had helped him set up an effective estate plan. Given the fact that Jobs famously resisted the advice of his doctors for several months while he explored other alternatives, some wondered if he might have acted similarly when it came to his estate planning. With a net worth estimated at nearly $7 billion, the stakes were large — his estate could have been hit with nearly $2.5 billion dollars in taxes. Further, Jobs was known as a very private person and it was quite possible that all his affairs could have been played out in detail at the probate courts for all the world to see. It turns out that Jobs plans were intact and it appears this helped his estate avoid many taxes, ensured his privacy and made his intentions clear to his surviving family and friends. And while we might not be able to relate to Steve Jobs at all, the reality is that it would be a major mistake to think that estate planning is just for the rich and famous.

Here are five examples of estate planning mistakes you may be making now:

1. You keep putting it off. If you postpone planning until it is too late, you run the risk that your intended beneficiaries — those you love the most […]

On the Net2016-12-13T20:33:36-08:00January 17th, 2012|Common Problems, Estate Planning|

What Is Estate Planning?

Question: What is estate planning? What documents make up an estate plan?

Answer: Simply put, estate planning is planning for your death or incapacity, including where you want your assets to go after your death.

A comprehensive estate plan should have the following primary documents:

Last Will and Testament: this is a legal document in which you name where you want your property to go after your death. Your Will also names a guardian for minor children, a conservator for the assets to be owned by minor children and/or incapacitated adults, and a personal representative to manage your estate.

Living Trust: like a Will, a Trust specifies how you want your assets to be distributed upon your death. Unlike a Will, a Trust allows you to control the distribution of the assets to your beneficiaries, instead of just giving it to them outright like you would with a Will. Your Trust names an individual or institution to manage the assets placed in trust (called a “trustee”). A Trust will help you avoid probate since the assets owned by the Trust are not part of your estate, so a probate is not required to transfer those assets. A Trust is also beneficial if you become incapacitated, since your trustee can immediately manage the trust and make sure your spouse and dependents are cared for. You can have both a Will and a Trust, or just a Will.

Healthcare Power of Attorney: this is a legal document which permits another person to make healthcare decisions for you if you are unable to do so yourself.

Richard Keyt2017-10-08T09:41:34-07:00January 10th, 2012|Estate Planning, FAQ|

Financial and Estate Planning For Gay and Lesbian Couples

Delaware Online: For gay and lesbian couples, embracing a life as loving partners can be just as fulfilling, and just as challenging, as a marriage between a man and a woman.

When it comes to finances, though, such relationships can become even more challenging to pull off successfully.

While Delaware's new law allowing civil unions has smoothed over some of the potential pitfalls, gay and lesbian couples remain in something of a legal limbo and face far more peril than married couples when it comes to ensuring that assets pass smoothly to a surviving partner.

“With a same-sex relationship, some of the key things to be aware of are the rights of the partners in the event of the unexpected, addressing ‘What would happen if?' ” said Bridget Erhard, a Newport-based certified financial planner with Ameriprise Financial, which markets its services to same-sex couples.

In response to the new law, some financial planners, attorneys and accountants are tailoring services specifically to the unique and still-uncertain circumstances that arise when domestic partners are not “officially” married in the eyes of the law.

In Delaware, the differences are now not as sharp, thanks to the passage of the Delaware Civil Union and Equality Act, which was adopted last year and took effect New Year's Day. But when it comes to the federal government, the law remains relatively blind to the notion of civil unions, creating a mix of conflicting rules, and potential risks, for couples who want to minimize taxes and protect family assets.

Yet even as the professional community recognizes the market potential of financial planning for gays and lesbians, some couples remain dangerously unconcerned.

“We have […]

On the Net2017-10-07T11:14:46-07:00January 9th, 2012|Estate Planning, LGBT Planning|

Planning for the Future and Reducing Uncertainty

Yuma Sun: When planning for the future, none of us has a crystal ball. We must plan our affairs based on current circumstances while trying to anticipate a whole range of possible future events.

When a couple sits down to plan what they want to happen after their death, they are trying to anticipate events decades down the road. A couple, each age 50, on average has more than 35 years until the death of the survivor of them. Who 35 years ago could have predicted the way our society would change and how events would occur into the 21st century?

Of course, we must plan, even though few, if any of us, have the ability to predict events in the years to come. We can plan for unforeseen events by giving discretion to those who will be there when those events occur. We choose someone we trust to make those decisions and to come as close as possible to what we would have done if we were there to make the decision. When we leave our assets in a trust, a “trustee” is given the responsibility of managing those assets and carrying out our wishes. The trustee can be given broad discretion, which he or she can exercise in light of the circumstances which we could not have foreseen.

Sophisticated estate planning attorneys even use a concept called a “trust protector” or “special co-trustee” to add even greater flexibility. A trust protector is an unbiased, unrelated person. He or she should not be the normal trustee and should not be one of the beneficiaries of the trust. He or she is given the authority to exercise powers which might […]

On the Net2017-10-07T11:14:46-07:00January 9th, 2012|Estate Planning, Trusts|

New Estate and Gift Tax Rules A Game Changer

Yuma Sun: Many of us spent our childhood years playing sports and games. An important part of our development was learning the rules. Once we understood the rules, we could develop creative strategies for winning.

When the rules changed, our strategies needed to adapt. Estate planning is no different. Late in 2010, President Obama signed into law changes to estate and gift tax rules.

If you haven't already, it's important to review the new rules and make adjustments to existing estate planning and gifting strategies. Here are a few of the changes that may affect your plans:

• Estate taxes reinstated — In 2010, for a single year there was no estate tax. During 2011 and 2012, the top estate tax rate will be 35 percent and the estate tax exemption amount will be $5 million. In 2013, these temporary changes will end and we may see a return to higher estate tax rates and lower exemption amounts.

• Generation-skipping transfer tax repealed — Generation-skipping transfers allow one person to reassign ownership of assets to another person who is two or more generations younger. For example, a grandparent might transfer ownership of property, by gift or at death, to a grandchild. Historically, GSTs have been taxed at the highest estate tax rate. However, for 2010, the GST tax was temporarily repealed. As a result, gifts made to grandchildren during 2010 were assessed gift tax and not GST tax.

The GST tax returned in 2011 with the top rate at 35 percent. Executors of estates for those who died during 2010 chose between the estate tax rules for 2010 and those for 2011 by filing an estate tax return […]

On the Net2017-10-07T11:14:46-07:00January 9th, 2012|Estate Planning, Estate Tax|

New Years Resolution: Create A Basic Estate Plan

NJ.com: Today Your Legal Corner will address “Basic Estate Planning.”

What will you do with this New Year given? Perhaps you want to lose 10 pounds, make plans for a spring garden, change jobs, travel to Europe or dedicate time to a coveted project. Just think of the possibilities this New Year brings.

One goal to definitely include is to review or create an estate plan. A basic estate plan consists of completing an inventory of present assets, defining goals, relationships, and realities; and then developing a plan of action.

Inventory Assets

Generally, most estate planning begins with an inventory of the assets. If you would like to receive an Inventory Packet, simply request one by email, phone or letter and it will be provided, free of charge.

The Inventory Packet is a guide used to list assets, state where assets are held, and define preferences and relationships. Once completed, the Inventory Packet will aid in deciding what type of estate plan is needed. The Inventory packet should be kept with the will.

Goals, Relationships and Realities

Quite often, the difficult questions have not been answered. While it is difficult to predict the future, estate plans must still be created with goals, relationships and realities in mind. For example, what are your long term goals? Where would you choose to reside as you age? What does retirement look like for you? Will you travel? Will you continue to work? Do you have long-term care insurance?

Each estate plan should address the possibility of nursing home living. At the very least, have a plan in place as to with whom or where you would reside in […]

On the Net2012-01-05T11:09:16-08:00January 5th, 2012|Estate Planning, Healthcare Directives, Powers of Attorney, Wills|

Questions You Should Ask Your Estate Planning Attorney

US News & World Report: Because you've worked hard to create a secure and comfortable lifestyle for your family, you'll want to ensure that you have a sound financial plan that includes trust and estate planning. With some forethought, you may be able to minimize gift and estate taxes and preserve more of your assets for those you care about.

A qualified financial professional and tax professional can help ensure you are minimizing taxes and maximizing gains for your heirs. You can bring this four-part checklist to your initial meeting to discuss how to make your plan comprehensive and up-to-date.

Part 1: Communicating your wishes

•Do you have a will?

•Are you comfortable with the executor(s) and trustee(s) you have selected?

•Have you executed a living will or healthcare proxy?

•Have you considered a living trust to avoid probate?

•If you have a living trust, have you titled your assets in the name of the trust?

Part 2: Protecting your family

•Does your will name a guardian for your children if both you and your spouse are deceased?

•If you want to limit your spouse's flexibility regarding the inheritance, have you created a Q-TIP trust?

•Are you sure you have the right amount and type of life insurance for survivor income, loan repayment, capital needs, and all estate settlement expenses?

•Have you considered an irrevocable life insurance trust to exclude the insurance proceeds from being taxed as part of your estate?

•Have you considered creating trusts for family gift giving?

Read the rest of this article here.

On the Net2017-10-07T11:14:46-07:00December 16th, 2011|Estate Planning, Estate Tax, Healthcare Directives, Powers of Attorney, Trusts, Wills|

No Better Holiday Gift Than Asset Protection!

Law Firm Newswire: It might not be something your children can pull out from under the tree and unwrap this holiday season, but the gift they may appreciate the most is the gift of asset protection.

“With family as the focus of so much attention during the holidays, it’s a natural time to consider their financial security,” said Brandon estate planning attorney Reginald Osenton. “No matter what age your children are, the time is never wrong to plan for the future.”

Even though most people tell their loved ones how they want their estate managed when they are gone, the only way to ensure it is done correctly is to put it in writing. “We put together plans for families so that when the time comes, everybody is taken care of exactly the way you want,” Osenton said.

A properly drafted estate plan with a qualified attorney will save your family money in the long run in future taxes, legal fees and other costs. It can truly be a holiday gift that will pay for itself.

Too many families are consumed by unnecessary stress and tension when it is time to divide an estate. Careful planning can eliminate all of the finger-pointing and he said, she said. “I have seen families fight over the smallest things. And it all could have been avoided if it had been planned out before hand,” Osenton said.

While a detailed will is the cornerstone of a good estate plan, health care issues can be handled before they arise as well. A power of attorney and a health care surrogate designation will let you determine now who will be making the decisions if […]

On the Net2011-12-16T13:15:11-08:00December 16th, 2011|Estate Planning, Estate Tax|

5 Big Estate Planning Mistakes You Don’t Want To Make

Forbers: Applying Murphy’s Law, “If anything can go wrong, it will,” to estate planning is crucial because in this case when something does go wrong, it goes very wrong and you aren’t around to fix it. Murphy’s Law at first glance appears to be overly pessimistic but the original intention of Capt. Edward A. Murphy wasn’t to depress anyone; it was to have a successful outcome. Edward Murphy was an engineer who was involved in the U.S. Army Air Force Aero Medical Laboratory’s project MX-981. Project MX-981 was designed to test the effects of deceleration forces of high magnitude on the human body. When a technician wired all of the strain gauges backwards, Capt. Murphy was heard muttering his famous phrase and the rest is history. Since they assumed mistakes were being made and things would go wrong, the attention to detail was heightened and the inevitable errors were caught. When asked during a press conference how it was that nobody had been severely injured during the tests, Dr. John Stapp credited Murphy’s Law, indicating that it was important to consider all the possible things that could go wrong before conducting a test, and then counteracting them.

A few years ago, I was going to give a financial education workshop to a group of petroleum engineers near Bakersfield, California and I happened to meet someone on the airplane who regularly presented to engineers. He gave me some advice to challenge them to find something wrong in the workshop—a statistic or a calculation with an incorrect formula, something like that. First of all, my flight companion mentioned, they are doing that anyways, but when they don’t find something, credibility instantly increases, and if […]

On the Net2016-12-13T20:33:38-08:00December 16th, 2011|Beneficiaries, Common Problems, Estate Planning, Healthcare Directives, Wills|

A Gift from Congress: Gift Up To $10 Million Tax-Free

Wealth Strategies Journal: “For a limited time, married taxpayers can make lifetime gifts of assets worth up to $10 million without paying federal gift taxes or other transfer taxes. The exemption for gift taxes, estate taxes, and generation skipping transfer (GST) taxes was fixed at $5 million per taxpayer when Congress extended the Bush-era tax cuts through 2012. Married couples can now give away up to $10 million and single people can give away up to $5 million without incurring gift or GST taxes, as adjusted for prior taxable gifts, which is a pretty powerful planning opportunity.

On the Net2017-10-07T11:14:46-07:00December 3rd, 2011|Estate Planning|

Understanding the Impact in 2012 & 2013 of Federal Estate Tax Laws

Estate planning attorneys Cecil Smith and Carol Gonnella have written an informative article about the coming impact of federal estate tax laws next year and the year after. The article starts:

“The estate tax laws are in a state of flux, and no one is sure what Congress will do in the near future. This article is about the laws today, and the importance of planning now rather than waiting until Congress may … or may not … act. It addresses tax liability in a broad sense, and does not take into account the impact of state death taxes, if any, or the implementation of advanced estate planning strategies such as LLCs, QPRTs, BERTs, ILITs, GRATs, Charitable Gifts, etc, to not only creditor protect assets during life, but to reduce or eliminate the estate tax bite upon death. . . . There are three ways to reduce (or even eliminate) federal estate taxes just by using Internal Revenue Code exclusions and/or exemptions that are available to everyone

The Unlimited Marital Deduction . . . .

The Basic Exclusion Amount . . . .

Portability . . . . “

On the Net2017-10-07T11:14:45-07:00December 1st, 2011|Estate Planning, Estate Tax|

More Celebrity Estate Planning Stories

Forbes: Did you know that family gatherings during the holidays are a great time to talk about celebrities, such as Whitney Houston, and how they can help your family avoid fighting when someone dies?

This is Part 2 of Trial & Heirs’ Top 5 Celebrity-Based Estate Planning Conversation Starters for Thanksgiving 2011:

(Did you miss Part 1? Click here.)

3. Whitney Houston

Whitney Houston has been locked in a vicious court battle with her step-mother over a $1 million life insurance policy from Whitney’s father, which named Whitney as the sole beneficiary. Whitney’s step-mother, Barbara, sued Whitney and claimed the money was meant for her, not Whitney. Whitney had lent her father money and held a private mortgage over his home, which Barbara received when Whitney’s father died in 2003. Barbara said the life insurance was meant to repay that money and Whitney was supposed to release the mortgage and turn the rest of the life insurance money over to Barbara.

So did Whitney agree that the money was to repay the mortgage, allowing Barbara to keep the house free and clear? Heck no! She counter-sued Barbara, and said the life insurance was meant to repay other money she had lent her father. She asked the court to evict Barbara and used the counter-suit as a time to point out to the world, in a public court record, that Barbara was 40 years younger than Whitney’s father and met him as a maid cleaning his house.

A federal court judge in New Jersey ruled in favor of Whitney and dismissed Barbara’s lawsuit. But Barbara appealed, and the United States Court of Appeals just heard oral […]

On the Net2011-11-28T11:44:37-08:00November 22nd, 2011|Estate Planning, Rich & Famous|

Celebrity Estate Planning Conversations for Thanksgiving 2011

The Probate Lawyer Blog: What family won’t be talking about Kim Kardashian and Michael Jackson at their Thanksgiving dinner? Dishing celebrity dirt is as natural as turkey and pumpkin pie. But did you ever think that celebrity gossip could actually help your family?

We use celebrity stories to turn the often-awkward conversation about estate planning into something fun and entertaining. Let’s face it … no one really likes to think about planning for what happens after they pass away. But, it’s the family left behind that pays the price when the proper planning isn’t done.

A great way to get the dialogue flowing, and to turn an awkward conversation into something fun and engaging, is with celebrity stories. What better time to do this than when the family is gathered together for Thanksgiving?

Here is Part 1 (out of 2) to our Trial & Heirs’ Top 5 Celebrity-Based Estate Planning Conversation Starters for Thanksgiving 2011:

1. Kim Kardashian

Seventy-two days of marriage. Wow that was fast! Did she even finish writing her thank-you notes from the wedding?

Let’s assume for a moment that the happy couple thought, after saying their wedding vows, that they’d spend the rest of their lives together. Well, even if they didn’t feel quite that strongly about one another, this still marked a significant life event. This means, the lovebirds should have updated their estate planning documents.

On the Net2016-12-13T20:33:38-08:00November 21st, 2011|Estate Fights, Estate Planning, Rich & Famous|

Baby Boomers Aren’t Estate Planning

ABA Journal: The Associated Press has a story out discussing how most boomers don’t have living wills. They also are light in other estate planning areas. Estate of Denial® is often the first in line willing to point out probate abuse that occurs via the use of instruments like wills, trusts, guardianships and powers of attorney. Living wills and healthcare proxies can bring their complications as well. That said, we also would never want our message to be misconstrued as being against proper estate planning.

Though the current probate system is highly problematic, the answer lies in fixing it, not in the avoidance of action. “The fix” is no easy task, but it is critical if America wants to continue on an ideological path similar to that which has served us well for centuries, a path which respects founding values like property rights, individual liberty and the rule of law.

In the meantime, our recent column, Can Texans (or anyone) protect themselves from probate abuse?, asked “what can people do to protect themselves, their assets and their heirs?” And our answer was a disconcerting “not a whole lot.”

On the Net2011-11-28T11:47:58-08:00November 21st, 2011|Estate Planning, Healthcare Directives, Trusts, Wills|

Common Estate Planning Mistakes And How To Avoid Them

Online Athens: I want to highlight some of the most common estate planning mistakes I think people routinely make (knowing that I can’t possibly cover them all in one column). You will notice that I’m not going to discuss the estate tax beyond saying that very few people are subject to it and that it can be effectively managed by an attorney and financial planner with expertise.

In my experience, No. 1 and No. 3 are the root causes of the other issues.

1. Failure to plan: I am constantly surprised to see how many people do not have basic estate planning documents in place. The statistics consistently say more than 50 percent of Americans do not have a will, so if you happen to have one, the odds are that one of your neighbors does not.

Estate planning is another one of those areas in financial planning that plays to our desire to procrastinate. The only immediate payoff we have to getting the core documents in place is to quiet that inner voice that constantly says, “I need to take care of this.”

With proper planning, many negative consequences such as not passing your assets as you wish, strained family relationships and even a lawsuit can be avoided.

Simply stated, dying without a will is easy, but picking up the pieces afterward is not. On the other hand, getting a basic will in place should not be complicated.

On the Net2020-03-23T07:40:15-07:00November 15th, 2011|Beneficiaries, Common Problems, Estate Planning, Healthcare Directives, Powers of Attorney, Trusts, Wills|

Grandparents: Don’t Make These 3 Common Mistakes

Reno Gazette-Journal: It's so tempting to want to give the grandchildren everything and put their wants and needs first.

However, one of the common money mistakes grandparents make is to put spending on grandkids ahead of their own retirement security.

Here are three money missteps grandparents make and ways to avoid them:

1. Excessively spoiling grandchildren

Financial advisers and estate planners have all kinds of stories about retirees who insist on spending significant amounts of their savings on grandchildren. Too often they fail to recognize the severity of the risk it poses for their own retirement security.

On the Net2016-12-13T20:33:38-08:00November 15th, 2011|Estate Planning|

Estate Planning Task List

T. Rowe Price: This basic “to do” list organizes some of the topics and action steps you'll want to consider. These steps should help you prepare for an informed discussion with your estate planning attorney.

1. Consider putting in place a durable power of attorney, an advance health care directive and organ donor papers.

2. Write down, in your own words, how you want your assets to be distributed after your death. Review all contracts and beneficiary designations you have in force today and confer with your estate planning attorney to see if they will actually accomplish what you intend and offer the appropriate level of control and flexibility. Make sure to update your will/trust periodically.

3. Make sure your plan leaves adequate sources of income for your beneficiaries. Consider purchasing life insurance to account for the loss of your income to any financial dependents.

On the Net2011-11-28T11:51:05-08:00November 15th, 2011|Estate Planning|