Protecting your loved ones begins with proper planning
Estate Planning is the legal document of your estate and financial matters so that you may use your assets to your best advantage during your lifetime, and then upon your death pass those assets on to your chosen heirs, beneficiaries and loved ones, with the least possible loss in value.
Wills
The most basic estate planning tool is a Last Will and Testament. Everybody has a will! You either prepare your own will or one has been written for you by Arizona State legislature. ALL wills must go through a legal process called “probate” to distribute your estate to your heirs – unless....
Revocable Living Trust
A revocable living trust is a written document which creates a separate legal entity. You appoint yourself as trustee of your trust (the manager of the trust). If you are married, your spouse may be a co-trustee. You are the life beneficiary of the trust (the person who enjoys the use of the properties of the trust). Most of your assets will be re-titled in the name of your living trust. As trustee of your own trust, you have 100 percent control over your assets: you can sell assets, buy assets, add assets to the trust, and remove assets from the trust. Since the trust is revocable, you can amend, alter, or revoke your trust at any time.
With a living trust you avoid the costs, time delays, public nature and other difficulties of having your estate go through court supervised probate.
In your trust document, you name one or more individuals to serve as successor trustees, should you die or become unable to serve as the trustee. A successor trustee can be one of your adult children or a close friend, a relative, or a trust company or bank trust department.
Your trust includes instructions specifying that upon your death or upon the death of your surviving spouse, your children or other loved ones will become the remainder beneficiaries.
Your trust agreement may also include your instructions on how to distribute the remaining property to those beneficiaries.
If any of your children are too young to receive their distributions, the successor trustee will manage their shares for their health, support, maintenance, and education until they attain the age you designated. At that time, the trustee may distribute their share.
Pour-Over Will
The Pour-Over Will is a separate document which is a necessary part of your living trust. It revokes any prior will you may have executed. Then it distributes your assets according to your plan in your living trust. Any property (real or personal) which you may have neglected to retitle in the name of your living trust will be transferred or “Poured-over” into your trust by the pour-over will. However, if the total value of these items that have not been previously transferred into your living trust exceeds your state’s probate exemption amount ($50,000 for Arizona), it will have to go through probate. Therefore, it is important to keep your trust funded.
Living Wills
A living will is a document which expresses your desire not to be kept on artificial life prolonging medical procedures when there is no prospect for your recovery from a serious illness, or when you are terminally ill. In your living will you may give certain health care directives and even name an Agent to make medical decisions on your behalf if you are unable to make such decisions. Most of those who sign a living will want to avoid being kept alive by technology if they are in a vegetative state or to prolong the dying process.
Power of Attorney
A power of attorney is an instrument authorizing another to act as your agent or attorney-in-fact. With a power of attorney you name someone to act in your place, name and stead as your “Agent.” A power of attorney may be General or Special (limited to certain uses). It may become effective immediately or become valid upon your disability.
A power of attorney is void upon your death and also upon your disability unless you direct that it be effective in the event of your disability. You may combine the characteristics you need into one power of attorney. I have found the most suitable power of attorney to be a “General Durable Springing Power of Attorney.”
It is a good idea to update your power of attorney about every 3-5 years. Most banks look at an older power of attorney as being “stale” and will not honor your power of attorney if it is too old. Some banks even require that a power of attorney be on their own pre-printed form and not be older than 2 years. Check with your own bank regarding their requirements.
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Estate-Tax
Simple estates do not require the filing of an estate tax return.
A filing is required for estates with combined gross assets and prior taxable gifts exceeding $1,500,000 in 2004 - 2005;
$2,000,000 in 2006 - 2008;
$3,500,000 for decedents dying in 2009; and
$5,000,000 or more for decedent's dying in 2010 and 2011;
$5,120,000 in 2012, $5,250,000 in 2013;
$5,340,000 in 2014 and;
$5,430,000 in 2015.
Wills
The most basic estate planning tool is a Last Will and Testament. Everybody has a will! You either prepare your own will or one has been written for you by Arizona State legislature. ALL wills must go through a legal process called “probate” to distribute your estate to your heirs – unless....
- You spent all your money while still alive; or
- You have an estate value at less than the amount requiring probate in your state of residence. For example: If you reside in Arizona and the value of the assets you own is less than $100,000, no formal probate is required upon your death. Your assets may be transferred to your heirs by an affidavit; or
- You have nothing in your name at the time of your death.
Revocable Living Trust
A revocable living trust is a written document which creates a separate legal entity. You appoint yourself as trustee of your trust (the manager of the trust). If you are married, your spouse may be a co-trustee. You are the life beneficiary of the trust (the person who enjoys the use of the properties of the trust). Most of your assets will be re-titled in the name of your living trust. As trustee of your own trust, you have 100 percent control over your assets: you can sell assets, buy assets, add assets to the trust, and remove assets from the trust. Since the trust is revocable, you can amend, alter, or revoke your trust at any time.
With a living trust you avoid the costs, time delays, public nature and other difficulties of having your estate go through court supervised probate.
In your trust document, you name one or more individuals to serve as successor trustees, should you die or become unable to serve as the trustee. A successor trustee can be one of your adult children or a close friend, a relative, or a trust company or bank trust department.
Your trust includes instructions specifying that upon your death or upon the death of your surviving spouse, your children or other loved ones will become the remainder beneficiaries.
Your trust agreement may also include your instructions on how to distribute the remaining property to those beneficiaries.
If any of your children are too young to receive their distributions, the successor trustee will manage their shares for their health, support, maintenance, and education until they attain the age you designated. At that time, the trustee may distribute their share.
Pour-Over Will
The Pour-Over Will is a separate document which is a necessary part of your living trust. It revokes any prior will you may have executed. Then it distributes your assets according to your plan in your living trust. Any property (real or personal) which you may have neglected to retitle in the name of your living trust will be transferred or “Poured-over” into your trust by the pour-over will. However, if the total value of these items that have not been previously transferred into your living trust exceeds your state’s probate exemption amount ($50,000 for Arizona), it will have to go through probate. Therefore, it is important to keep your trust funded.
Living Wills
A living will is a document which expresses your desire not to be kept on artificial life prolonging medical procedures when there is no prospect for your recovery from a serious illness, or when you are terminally ill. In your living will you may give certain health care directives and even name an Agent to make medical decisions on your behalf if you are unable to make such decisions. Most of those who sign a living will want to avoid being kept alive by technology if they are in a vegetative state or to prolong the dying process.
Power of Attorney
A power of attorney is an instrument authorizing another to act as your agent or attorney-in-fact. With a power of attorney you name someone to act in your place, name and stead as your “Agent.” A power of attorney may be General or Special (limited to certain uses). It may become effective immediately or become valid upon your disability.
A power of attorney is void upon your death and also upon your disability unless you direct that it be effective in the event of your disability. You may combine the characteristics you need into one power of attorney. I have found the most suitable power of attorney to be a “General Durable Springing Power of Attorney.”
It is a good idea to update your power of attorney about every 3-5 years. Most banks look at an older power of attorney as being “stale” and will not honor your power of attorney if it is too old. Some banks even require that a power of attorney be on their own pre-printed form and not be older than 2 years. Check with your own bank regarding their requirements.
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Estate-Tax
Simple estates do not require the filing of an estate tax return.
A filing is required for estates with combined gross assets and prior taxable gifts exceeding $1,500,000 in 2004 - 2005;
$2,000,000 in 2006 - 2008;
$3,500,000 for decedents dying in 2009; and
$5,000,000 or more for decedent's dying in 2010 and 2011;
$5,120,000 in 2012, $5,250,000 in 2013;
$5,340,000 in 2014 and;
$5,430,000 in 2015.
The legal Information Provided in this Web Site is for General Reference Only and Should Not Be Relied Upon - You Should Always Consult a Lawyer to Determine Your Legal Rights.