Arizona Estate Planning

Four Important Considerations If You Win the Lottery

On February 14, 2023, California state lottery officials named the winner of the largest lottery prize in United States history: Edwin Castro won an eye-popping $2.04 billion in a November 2022 lottery drawing, choosing a lump sum payment of $997.6 million instead of annual payments over three decades.^[1] A lottery player in Maine recently won the $1.35 billion Mega Millions jackpot—another of the largest prizes ever recorded.^[2] If you are fortunate enough to have purchased a winning lottery ticket, it is important to carefully consider how you want to handle your unexpected windfall to avoid repeating the unfortunate pattern of many lottery winners who quickly squander their new wealth,^[3] even if your prize is much smaller than those mentioned.

Take your time. Lottery winners typically have a specific length of time to claim their winnings, although the deadlines vary by state. For example, under title 8, section 382 of the Maine Revised Statutes, the Maine Mega Millions winner has one year after the drawing to claim the money. If it is never claimed, it will be transferred to the state’s general fund. In North Carolina, however, the prize must be collected within 90 or 180 days of the end of the game or drawing, depending upon the type of lottery prize you have won.^[4] Although it is not wise to delay too long, you should take time to think carefully about what you would like to do with the cash you have won, preferably even before you claim your prize.

Manage expectations. If your lottery winnings have substantially increased your wealth, you may discover that your popularity has also grown. Some family members, acquaintances, and scammers are likely to […]

On the Net2023-04-08T09:20:19-07:00April 24th, 2023|Estate Tax, Peace of Mind|

Important Milestones You Can Incorporate in Your Estate Plan

Life is full of contingencies. While some outcomes are relatively certain, other events are more difficult to predict. This uncertainty can create estate planning challenges. Because life changes quickly and sometimes unexpectedly, your estate plan needs to be flexible.

You can make changes to your estate plan when you are still alive, but when you pass away, your plan is effectively—but not entirely—set in stone. Incorporating milestones into your estate plan is one way to hedge against the unpredictable future. By creating incentives for particular events, you can continue to exercise your values and provide for your loved ones beyond your lifetime.

Clarifying Your Wishes with If-Then Statements

If-then statements allow outcomes to be determined with conditions. They are found in deductive logic, computer programming, and legal documents, including estate planning documents.

The premise of an if-then statement is simple: if a given criteria is met, then a certain action follows. For example, you might write in your will that, “If my spouse predeceases me, then I leave my house to my oldest son,” or, “If both my spouse and I pass away, then [Person X] will be nominated as guardian of our children.”

Such clauses can help you retain some power over outcomes that would otherwise be out of your control. They can also help you to plan for future contingencies in a way that is not possible with simple declarative statements (e.g., “I leave my house to my spouse.”).

If-then clauses can be combined to account for numerous future possibilities. So, in addition to “If my spouse predeceases me, then I leave my house to my oldest son,” you could specify that “If my son […]

On the Net2023-02-25T12:32:32-08:00December 22nd, 2022|Beneficiaries, Estate Planning, Peace of Mind|

Red Flags When Hiring a Professional To Be Your Trustee

When you form a trust as part of your estate plan, one of the most important decisions you will make is who will oversee the trust’s management when you are no longer able to manage it (also known as your successor trustee). Because a trustee’s work may be time-consuming, complicated, and risk liability, many people who create a trust consider naming a professional fiduciary as their trustee. Keep in mind that if you ask your estate planning attorney to serve as your successor trustee, you should ask for a separate engagement letter from the one you sign engaging them to create your estate plan. When looking to hire a professional to serve as your trustee, the following are several red flags you should keep in mind.

Do They Have Adequate Resources?

A professional’s agreement to act as your trustee does not guarantee that they have the resources needed to administer your trust properly. Be proactive about asking questions. Trust administration is an important job, and you should satisfy yourself that the person you appoint as your trustee is well-equipped to fulfill the role. The following are some of the important functions you should ask the professional about:

The professional you hire should have a good system for trust accounting. Trust funds must be held in a separate account that is not commingled with their business’s funds, and there must be a system in place to keep separate records of income and principal, disbursements from the account, receipts, capital transactions, and more. The professional trustee has a duty to provide information to the trust’s beneficiaries, and current income or principal beneficiaries are entitled to a detailed accounting to enable them […]

On the Net2023-02-25T12:31:03-08:00December 21st, 2022|Common Problems, FAQ, Peace of Mind, Trusts|

Important Issues to Address Before You Leave on Vacation

Getting ready to embark on your next great adventure? Before you zip up the last suitcase, here are five issues you need to address to protect yourself and your loved ones.

Do you have a foundational estate plan? Has it been reviewed?

An estate plan is a set of instructions memorialized in legal documents that explains to your trusted decision makers and loved ones your wishes about your care, the care of any dependents, and how your money and property should be handled.

Last will and testament

Depending on your unique situation and needs, you may have a last will and testament (also known as a will) as the foundation of your estate plan. This document allows you to name someone to wind up your affairs (i.e., gather your belongings for safekeeping, create a list of everything you own, pay your outstanding bills and taxes, and give the remainder to the individuals and charities you have chosen). You can also name a guardian for your minor children if you have any. Because a will takes effect only at your death, using a will to outline your wishes will likely still require your loved ones to go through the probate process (a court process that can be expensive, time-consuming, and public) to carry them out.

Revocable living trust

On the other hand, you might have a revocable living trust as the basis of your estate plan. A revocable living trust is an entity that owns your accounts and property. In order for your trust to own your accounts and property, they will either be retitled in the name of your trust (instead of in your sole name) or […]

On the Net2023-02-25T13:05:57-08:00December 15th, 2022|Common Problems, Estate Planning, FAQ, Peace of Mind|

Batman: The Masked Philanthropist

Among the superheroes, Batman is unique because he has no superpowers. Although he is trained in the martial arts and possesses a range of high-tech gadgetry that allows him to fight crime, Batman is entirely human. He does not have genetic mutations, X-ray vision, overpowering physical strength, flying ability, genius-level intellect, or any other god-like powers.

But Bruce Wayne does possess something that is key to his moonlighting as Batman: money. As the heir to an enormous fortune, Wayne is one of Gotham’s wealthiest citizens. He is also a major philanthropist who donates money to various causes. While his philanthropy is overshadowed by his masked vigilantism, neither would be possible without the money left to him by his parents.

Carrying on the family legacy means different things to different families. You probably do not want your heirs to follow in the footsteps of Batman—at least when it comes to crime fighting. You might, however, want to inspire them to the philanthropy of Bruce Wayne. If so, your estate plan should be structured in such a way that it gives your loved ones the finances—and the flexibility—to do good on their terms.

Batman’s Birthright

Most superheroes are fated to become who they are due to forces beyond their control. Spiderman and the Incredible Hulk were the unwitting victims of radiation. The X-Men were born with genetic mutations that made them societal outcasts. Captain America received an experimental “super-soldier serum.” And Superman hailed from the alien planet Krypton.

Bruce Wayne developed the ability to overcome powerful foes, but he does so primarily through his personal drive and ingenuity, with an assist from his family fortune, which he inherited at age eight when his parents, Martha and Thomas, were killed. Also instrumental in […]

On the Net2023-02-25T13:07:20-08:00December 5th, 2022|Beneficiaries, Estate Planning, Peace of Mind|

Spousal Lifetime Access Trusts: What You Should Know

No one wants to pay more taxes than they have to. To carry out this objective, many people search for the perfect estate planning tool that will allow them to control as much of their money and property as possible while reducing the amount they or their loved ones will have to pay the government. If you have looked for the tax-saving estate planning tools, chances are you might have come across the spousal lifetime access trust (SLAT). Here are some important things you should know before you settle on this tool as your estate planning solution.

What is a spousal lifetime access trust?

A SLAT is a type of irrevocable trust created by one spouse (trustmaker spouse) for the benefit of the other spouse (beneficiary spouse) that is used to transfer money and property out of the trustmaker spouse’s estate. This strategy allows married couples to take advantage of their lifetime gift and estate tax exclusion amounts by having the trustmaker spouse make sizable, permanent gifts to the SLAT that decrease the value of their estate while maintaining some limited access to the money and property that is gifted for the beneficiary spouse’s benefit.

How does it work?

The trustmaker spouse gifts money or property (of which they are the sole owner) to the SLAT for the benefit of the beneficiary spouse. If the couple resides in a community property state, they will likely need to convert community property into separate property through a partition agreement. The trustmaker spouse reports the gift on a gift tax return. The beneficiary spouse can receive distributions from the trust, from which the trustmaker spouse may also indirectly benefit. Upon the death […]

On the Net2023-02-25T12:34:37-08:00November 15th, 2022|Asset Protection Trusts, Beneficiaries, Estate Planning, FAQ, Peace of Mind, Spousal Lifetime Asset Trusts, Trusts|

Do You Need a Trust?

Charles Schwab asked three of their own professionals important questions regarding the differences between wills and trusts.

A trust is a fiduciary arrangement that specifies how your assets are to be distributed, usually without the involvement of a probate court. They can be structured to take effect before death, after death, or in case of incapacitation. In contrast, wills take effect only upon death and typically need to be authenticated by a probate court, which can take time and involve additional costs.

Trusts can be arranged to accomplish a variety of different goals. For example, you can use a trust to transfer property, help minimize estate taxes, preserve assets for minors until they are adults, or benefit a charity.

Richard Keyt2021-11-05T15:21:20-07:00October 6th, 2021|Common Problems, Estate Planning, Estate Planning for Singles, Peace of Mind, Trusts, Wills|

6 Essential Estate Planning Documents Every Adult Needs

MarketWatch recommends every adult should have the following six estate planning documents:

“Durable power of attorney

Health care directive or medical power of attorney

Will

Revocable trust

Beneficiary designations

Guidance letter to family”

On the Net2021-11-05T07:34:31-07:00September 8th, 2021|Estate Planning, Estate Planning for Singles, Peace of Mind|

How to Set Up a Trust Fund if You’re Not Rich

Investopedia discusses how to set up a trust fund if you're not rich:

Trust funds are designed to allow a person's money to continue to be used in specific ways after they pass away, and to avoid their estate going through probate court (a time-consuming and expensive legal process). But trusts aren't only useful for ultra-high-net-worth individuals, the middle-class can use trust funds as well, where setting one up isn't out of financial reach.

Richard Keyt2021-11-05T14:54:43-07:00December 22nd, 2020|Estate Planning, Estate Planning for Singles, Peace of Mind, Trusts|

Last Will And Testament, Power Of Attorney, And Healthcare Proxy

Above the Law discusses the importance of having a Last Will And Testament, Power Of Attorney, And Healthcare Proxy:

Like an annual physical exam or dental cleaning, we know we must, but we often delay. Fear, anxiety, cost, and time are all factors in delaying that which all adults, regardless of familial structure and net worth, should accomplish. Executing estate planning documents, specifically a last will and testament, power of attorney and healthcare proxy, need not be a tremendous production, especially in the precarious times in which we live. At a minimum, we should all execute three basic documents, thus mitigating any future drama.

Richard Keyt2021-11-05T13:10:37-07:00April 21st, 2020|Estate Planning, Healthcare Directives, Peace of Mind, Powers of Attorney, Wills|

Interest in Estate Planning Picks up with Pandemic

This article in the Herald Mail Media states:

“the most important document people should be getting right now is the equivalent of a medical power-of-attorney. The document's name depends on the state. . . . First, appoint an agent or decision-maker for healthcare decisions in case you are unable to make or communicate an informed choice yourself . . . . Second, the document should express your wishes in case you end up in a terminal condition or persistent vegetative state. Do you want interventions or not?”

On the Net2022-10-11T15:45:05-07:00April 9th, 2020|Estate Planning, Peace of Mind|

Estate Planning Is More Important Than You Think

This article in Kiplinger starts with “Smart Insights from Professional Advisors” then says:

“An estate plan is a necessary tool that allows you to protect, maintain and manage your property if you become ill or pass away. But more than that, it can also help people make sure their minor children are protected in the event of an emergency or minimize taxes paid on assets by beneficiaries. . . . So, why do so many hardworking people fail to take the time and effort to build an estate plan and preserve their hard-earned assets? . . . a common misconception most people have is that estate planning is for those who are older or possess substantial wealth. Many people also assume that the process will be complex, time intensive and pricey. But some — if not all — of the problems mentioned aren’t true the majority of the time.”

On the Net2022-10-11T15:45:13-07:00April 7th, 2020|Estate Planning, Peace of Mind|

Estate Planning: Do it Early and Avoid Grief

Ron Wynn writes in Culver City News:

“People often try to put certain things that are not so pleasant on the back burner and say, “I will get to it.” If that is you, you are no different than anyone else. One of the things that people often put aside is estate planning. We all think that we have plenty of time to do that, and that is not our biggest priority.

And then of course, when people get unfortunately ill, it becomes a scramble. Set everything up early in advance when it comes to how you want your estate handled. It’s not a pleasant thing, but it’s something that has to be done and the sooner you do it, the better off you are.

The first thing you want to do, assuming you have assets, is to contact an estate planning attorney and listen to his/her advice. The likelihood is if you own property and other sizable assets, they will suggest you create a family trust. They will explain the kind of family trusts there are, including a revocable trust and an irrevocable trust, and they will also explain to you what the benefits of each are and how they work.

On the Net2020-04-05T08:08:39-07:00April 5th, 2020|Estate Planning, Peace of Mind|

Financial Planner People Make Same 4 Estate-planning Mistakes Over and Over

Very informative article in Business Insider says, “I've worked with more than 1,200 families as a Certified Financial Planner, and I see people make the same estate-planning mistakes over and over again. Not having a will is a major problem. After that, though, you also need guardianship documents for minor children, updated beneficiaries, and a properly funded trust.”

On the Net2020-03-30T16:50:59-07:00March 30th, 2020|Estate Planning, Peace of Mind|