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This is what it sounds like When Doves Cry

By | Celebrity Estates, Estate Planning | No Comments

Purple rain, purple rain is falling upon the millions of fans who grieve over the death of rock and pop legend, Prince.  Prince, also known as Prince Rogers Nelson, passed last week at his Paisley Park home.

Now what happens to his estate?  When you are rich and famous, the popular misconception is that you have your Diamonds and Pearls and your Little Red Corvette planned for.  But there must have been a Breakdown, because Prince’s sister filed to open a probate in Prince’s home county in Minnesota.

In the court documents, Prince’s sister, Tyka Nelson, claims that Prince did not even have a will.  But Let’s [Not] Go Crazy because even if Prince had a will, a probate would still need to be opened.  A will simply tells the court your wishes as to who you would like to be in charge and who will receive your “stuff.”

To avoid the publicity of a court case (and that is what probate is), as well as the cost and potential Controversy, Prince, as well as anyone, should have planned with a revocable trust.  U Know this could be any of us.  We all put off planning, as we live for the Days of Wild; death and incapacity and those drab topics makes us feel like we have a Dirty Mind.

We all want to party like its 1999, and Prince, evidently, was a Partyman.  But unlike a good wine, putting off talking with a qualified attorney about your plans does not get Better with TimeBreakfast Can Wait, but your estate planning should not.

In addition to Tyka, Prince also has five half siblings.  With no planning done, it does not matter if Prince had a Darling Nikki, or Another Love, the state of Minnesota makes all distribution decisions through their laws of intestacy.  You don’t need an Act of God to see that the State’s plan may not be what you need or want.

For You, one of our estate planning attorneys will sit down with you, at a complimentary consultation, and see what plan works best for your situation.  So put on your Rasberry Beret, and use Prince’s lesson as a Sign O’ the Times, and make your appointment today.

jim-plitz  Contributed by Morris Hall, PLLC Albuquerque, Santa Fe and Las Cruces Estate Planning Attorney and Partner, James P. Plitz.

About Morris Hall, PLLC:
At Morris Hall, PLLC we have focused our legal practice on estate planning for over 45 years.  Along with estate planning, our attorneys help clients and their families with matters of probate, trust administration, wills, power of attorneys, business planning, succession planning, legacy planning, charitable gifting and other important legal aspects.  We also have divisions in financial, real estate and accounting to help you incorporate all of your planning together, ensuring that everything works perfectly for your needs and situation. Our Arizona offices are located in Phoenix, Mesa, Scottsdale, Carefree, Tucson, Oro Valley, Prescott, Sedona, Flagstaff and Arrowhead.  Our New Mexico offices are located in Albuquerque, Las Cruces and Santa Fe.  Contact us today at 888.222.1328 to schedule an appointment!

This blog should be used for informational purposes only.  It does not create an attorney-client relationship with any reader and should not be construed as legal advice.  If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.

Make Things Easier for Those Left Behind: Leave a “Map”

By | Attorney Andrea Claus, Beneficiaries, Estate Planning | No Comments

The hardest part in creating your estate plan is seeing the attorney to make sure it is done right.  I want to give the proper kudos to all those I’ve met, those who’ve been diligent in creating a plan and memorializing their final wishes.  Yet many have not listened to my recommended “follow-up” step – communicate with your loved ones.  The most critical piece that needs to be shared is these documents might be found.  This little oversight can be especially worrisome because loved ones don’t often search for estate documents until after the funeral.    At the very least,  leave your loved ones a “map” to help guide them after you’re gone. Without the documents, conflicts can arise between family members as to what a parent or loved one would have wanted.  Further, problems, such as delay and missteps, can continue if you did not leave a current list of assets or the location of important documents.

A map is a tool used to get from one point to another – a tool used to prevent getting lost.  Your map leaves directions or guidelines as to your burial or funeral wishes for your loved ones to follow.  By providing directions to those left behind, you’ve reduced the burden on them to have to decide.  There is no wondering whether something is as you’d have wished, no second-guessing, and the chance for conflict amongst the family is most likely eliminated.

Your map should also provide a list of current assets.  The person whom you’ve charged with settling things after you’ve gone (your ‘executor’) will need to know what you have in order to account for and make your distributions.  By leaving a current list of assets, and clearing out all outdated statements, contracts and policies, you will make that task much easier.  Ensuring that the person you’ve named knows where to access your estate plan and your “map” is of utmost importance.

One of the greatest gifts you can give a loved one is the peace of mind that comes with knowing they’re carrying out your true wishes.  Creating a complete estate plan ensures this, and to leave a “map” will relieve a great burden during a difficult time.  Call for an appointment with a Morris Hall attorney today; we are happy to review your plans and help you outline what all should be in your map.

andrea-claus Contributed by Morris Hall PLLC Phoenix and Prescott Estate Planning Attorney, Andrea L. Claus.

What the Attorneys of Morris Hall, PLLC Can Do For You:
The attorneys at Morris Hall have 100’s of years of combined experience ensuring that families’ assets are protected from probate, unnecessary taxes, creditors, ex-spouses and Medicaid spend-down.  Our Arizona offices are located in Phoenix, Mesa, Scottsdale, Carefree, Tucson, Oro Valley, Prescott, Flagstaff and Arrowhead.  Our New Mexico offices are located in Albuquerque, Las Cruces and Santa Fe.  Contact us today at 888.222.1328 to schedule an appointment!

This blog should be used for informational purposes only.  It does not create an attorney-client relationship with any reader and should not be construed as legal advice.  If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.

Estate Planning is Easy; Right?

By | E-Alert, Estate Planning, Estate taxes | No Comments

Have you filed your personal income tax return yet?  We know everyone, and every entity, that earns income in the U.S. is required to file a tax return.  The filing deadline for 2015 for individuals is fast approaching on April 15, 2016 (Note: The filing deadline is actually April 18th this year due to Emancipation Day in DC falling on April 15th, and if you live in Massachusetts or Maine the filing deadline is April 19th, in consideration of Patriots Day).  We all know it can be a time consuming and arduous process to organize your income and expenses from the past twelve months, especially if you own a business.  Yet most of us get it done, every single year, and manage to file on time!

Comparatively, have you ever considered how many times in your life you will need to prepare your estate plan?  Your original plan only has to be drafted just one time.  As long as it is properly drafted, it will only need to be updated when something in your life or the law changes.  Wait!  Before you stop reading: the law does not change all that often.  Your estate planning attorney (especially if you have a Morris Hall attorney) will let you know of any changes to law impacting your estate plan.  This means you won’t bear the responsibility of keeping up with the federal and state laws yourself. Whew!  I know, you were about to log off the internet and go see your dentist, because - for a brief moment- that sounded like more fun.  We know when changes to law occur and we notify our clients if and when an update to their estate plan might be necessary.

With regard to filing a tax return, some of us have actually read the Internal Revenue Code and have a working knowledge of various aspects of federal and state tax law, such as income tax (capital gains, withholding, self-employment, etc.).  Many of us even have a surface understanding of what we can and cannot do on our income tax returns, including which business expense deductions are generally allowed (versus advisable); or which transactions are deductible as business expenses (versus which should be amortized or depreciated).  Even if you think you understand the tax code, you are in the minority.  Very few individuals truly know how to apply tax law to employee income or business bookkeeping, let alone translate it into accurate reporting on a tax return.  There is a reason we hire tax professionals to prepare our income tax returns; the tax code (both federal and state) is complicated.

Estate planning is the same:  it is complicated.  You may have some basic understanding of some basic techniques to transition assets to others when you pass.  But, like with the income tax, there are nuances that require both a breadth and depth of knowledge of the laws and the applications of those laws.  Not every attorney can do that for you.

Most attorneys don’t devote their practice to understanding the intricate aspects of estate planning.  Further, most attorneys practice estate planning as part of a larger practice area.  How are those attorneys able to manage so much responsibility and understanding while still drafting accurate and up-to-date estate planning documents?  We focus our entire practice on estate planning, so we know how much effort it takes to practice estate planning exclusively.

Does your CPA specialize in tax?  If she is currently an internal audit specialist but still supplements her practice by preparing individual tax returns, she might not be spending much of her time or energy on current updates to the tax code and revenue reports.  Although you probably get a tax return filed on time, are you sure you didn’t miss out on a refund, or under-report your income or under-pay your tax liability?  These kinds of oversights could result in an audit, penalties and/or additional tax assessments.

Comparatively, we leverage our expertise to provide the best advice to you regarding the good and bad with your current estate plan and help devise the best plan for your individual circumstances.   You may have a surface understanding of a particular area of estate law, but the many nuances  can lead to a variety of outcomes; not all favorable.  But that’s normal, you, the client, would not study and stay abreast of all of the intricacies of the law that could impact your estate plan.  Why would you?  There’s life to live out there!  More importantly, you never want to wonder what might happen if your plan is not updated, or what might have been overlooked by your original attorney.

If I knew everything there was to know about income tax, I would likely be alone… on a deserted island... with an adding machine… You get the picture - the income code is too complicated to know it intimately; and you still want to have friends!  If you knew everything about estate tax, you would not likely be reading this article, and you would have no need for an estate planning attorney, but then again, you might also be alone… on your deserted island.

Make an appointment with a Morris Hall attorney today, so we can help you devise a plan or review your existing plan.  Because we actually do spend a lot of time reading the tax code and other such truly riveting reading material, we are constantly striving to be the best.  We figure we ought to make good use of what we’ve learned studying estate planning while you are out enjoying your life, just like you should be.

Incidentally, we are fine here at Morris Hall, islands can be lovely this time of year.

Leslie 2 x 3 copy  Contributed by Morris Hall, PLLC Albuquerque Estate Planning Attorney, Leslie M. Thompson.

About Morris Hall, PLLC:
At Morris Hall, PLLC we have focused our legal practice on estate planning for over 45 years.  Along with estate planning, our attorneys help clients and their families with matters of probate, trust administration, wills, power of attorneys, business planning, succession planning, legacy planning, charitable gifting and other important legal aspects.  We also have divisions in financial, real estate and accounting to help you incorporate all of your planning together, ensuring that everything works perfectly for your needs and situation. Our Arizona offices are located in Phoenix, Mesa, Scottsdale, Carefree, Tucson, Oro Valley, Prescott, Sedona, Flagstaff and Arrowhead.  Our New Mexico offices are located in Albuquerque, Las Cruces and Santa Fe.  Contact us today at 888.222.1328 to schedule an appointment!

This blog should be used for informational purposes only.  It does not create an attorney-client relationship with any reader and should not be construed as legal advice.  If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.

 

 

Spring Cleaning: Shred or Keep?

By | Estate Planning, Other | One Comment

It’s my favorite time of year – spring! And that means it’s time to get busy and do some spring cleaning.

What does spring cleaning and estate planning have to do with each other?

Getting one’s affairs in order with planning, also means getting organized with “cleaning” out the filing cabinets, drawers, safe deposit boxes and any other areas where important papers are kept.

When I visit with families and discuss their estate planning options, I always ask this question during our discussion – “If something tragic were to happen to you tomorrow, would the family be able to step into your life and know how to locate your asset and income sources?”

Typically the answer across the table is “No, they would have no idea.” More interesting is that even with married couples, the answer is the same.

It’s crucial that we begin sharing the location of where important papers are kept. But even more critical is that our filing cabinets and other storage areas of important papers are continually kept with current documents.

Before tragedy hits, it’s a perfect time to organize those location spots and shred old life insurance policies or bank statements that were closed years ago. During an emotional time, those that you leave behind don’t need to spin their wheels tracking down assets that no longer exist.

Wendy-Harn-Photo  Contributed by Morris Hall, PLLC Oro Valley and Tucson Estate Planning Attorney and Partner, Wendy W. Harn.

What the Attorneys of Morris Hall, PLLC Can Do For You:
The attorneys at Morris Hall have 100’s of years of combined experience ensuring that families’ assets are protected from probate, unnecessary taxes, creditors, ex-spouses and Medicaid spend-down.  Our Arizona offices are located in Phoenix, Mesa, Scottsdale, Carefree, Tucson, Oro Valley, Prescott, Flagstaff and Arrowhead.  Our New Mexico offices are located in Albuquerque, Las Cruces and Santa Fe.  Contact us today at 888.222.1328 to schedule an appointment!

This blog should be used for informational purposes only.  It does not create an attorney-client relationship with any reader and should not be construed as legal advice.  If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.

Perilous Times in America:

By | Estate Planning, Preparedness | One Comment

We live in perilous times in America today, but don’t worry I am confident.   After listening to all of the current candidates rhetoric, whomever is elected will solve all of our problems. If that were only true. Unfortunately, we have our issues in the United States today. We love to sue each other. There are over 15 million lawsuits filed in our court systems every year. We love to divorce each other. We have the highest divorce rate in the world. There are over 1 million bankruptcies filed each year in the United States. We have generations of children being born with a feeling of entitlement.

Is there a way to protect our loved ones, after we are gone, from some of the stress and hardship that comes with some of today’s issues?  Wouldn’t we all want to offer that protection? We have all worked too hard, scarified too much, spent too much time, energy and effort accumulating the nest egg’s we have.   Don’t have it destroyed after we are gone if something terrible should happen to our loved ones.

There is a way to offer security to our loved ones after we are gone We can leave their inheritance, our hard earned nest egg, in a trust for them. If properly drafted these trusts can allow them access to the principle and income, if that is what you wish, and can continue on into perpetuity. This allows your legacy to continue on for your grandkids and great grandkids. With these Dynasty Trust’s we are able to offer protection from your loved ones creditors, divorces, and lawsuits they may be involved in after you are gone.

Our loved ones may be facing different challenges that we have going forward, but there is a way to help guard against them with proper estate planning.

dave-eastman  Contributed by Morris Hall, PLLC Arrowhead, Scottsdale and Phoenix Estate Planning Attorney and Partner, David T. Eastman.

 

Morris Hall, PLLC Can Protect You in Today’s Litigious Society:
We live in a litigious society, where over 1 million lawsuits are filed every year in America alone.  Financial predators are looking for ways to take funds from others and often use litigation as their means to do so.  At Morris Hall,  we provide your assets and your loved ones with important protections that can prevent financial predators from taking advantage of you.  We do this through proper and current estate planning techniques.  With an MH living trust, we can also protect your property, assets and loved ones from probate, estate taxes, gift taxes, creditors, Medicaid spend-down, conservatorship or guardianship proceedings, ex-spouses and more.  A living trust also keeps your asset and beneficiary information private and secure to avoid giving financial predators information to use against you and your family.  Without a living trust, this information will be made public.  For those living in Arizona, we serve the areas of Phoenix, Mesa, Scottsdale, Carefree, Prescott, Flagstaff, Tucson, Oro Valley and Arrowhead.  In New Mexico we serve the areas of Albuquerque, Santa Fe and Las Cruces.  Contact us today at 888.222.1328 to schedule an appointment with an attorney in your area!

This blog should be used for informational purposes only.  It does not create an attorney-client relationship with any reader and should not be construed as legal advice.  If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.

 

 

 

Should you plan your “Estate?”

By | Estate Planning | No Comments

We hear all the time, “I am too young to put a plan in place;” or, “I don’t have enough to worry about planning.”  However, both those statements misconstrue what estate planning actually is.

First, you need to know that you, in fact, do have an estate.  It may be a large estate or a small estate, but your estate is what you own, and who you care about.  Google “everyone has an estate” and see the pages and pages of results.  You can read my prior blog here; or if you want to hear me talk about, I did a video here.

Planning for your estate, then, is simply the thought process that leads to memorializing your wishes.  This will help mitigate problems for you and your loved ones.  Even if you’ve not engaged in this process, you have an estate plan.  Your State of residence has generously provided you a plan via their laws and their court system.  And we know that the State’s plan is always the perfect fit for your situation (note the sarcasm).

So, are you too young to plan?  The answer is: “No.”  Once you’re an adult (age 18), you should have, at  minimum, a Financial Power of Attorney, Health Care Power of Attorney, Living Will and an Authorization to Disclose Health Information (aka “HIPAA”).  For all you parents and grandparents: as your 18 year-old son or daughter heads off to college this fall, it is  important  they have these minimum planning documents in place.

As you acquire more assets and/or start a family, other documents become necessary to mitigate future issues.  Estate planning is about peace of mind.  You are never too young to plan.  If you care about anyone, you put a plan in place.

So, when do you have enough money to plan?  If your goal is make things easier for those who need to care for you, then it really does not matter how much money you have – you need a plan.  The type of plan will vary with the size of your portfolio (Bill Gates will have a much more complex plan than you or I), but planning is the grant of power and the direction on what is to be done with whatever assets you may have.  A proper plan also deals with incapacity (e.g. if you were to end up in a coma).

We have seen many poorly planned estates (or no plan at all) have to give up the $1,000 property because the cost to “get” the property out of the estate was more than the property was worth.  That is a terrible conversation to have with the family of the person who has passed.

It is important for everyone to have an estate plan.  The size and complexity of the plan will vary with each person’s circumstances.  Sitting down with one of our estate planning attorneys to go through your situation will help you put in place the best plan for you.

 

jim-plitz  Contributed by Morris Hall, PLLC Albuquerque, Santa Fe and Las Cruces Estate Planning Attorney and partner, James P. Plitz.

Why Choose Morris Hall, PLLC:
You have a number of options when it comes to estate planning, so why pick Morris Hall?  First off, estate planning and asset protection are a very complicated endeavor and you should only trust someone who focuses exclusively on those matters.  Also, Morris Hall is a proud member of The American Academy of Estate Planning Attorneys (AAEPA) which provides us additional support, advanced training, tools and information that is not available to others – which means that we can better protect your assets and your loved ones.  We are one of only three firms in Arizona that belong to the AAEPA and are the only firm in New Mexico that has been granted membership.  If you have assets and loved ones that you want to protect, you are in good hands with Morris Hall.  Contact us today at 888.222.1328 to schedule an appointment

This blog should be used for informational purposes only.  It does not create an attorney-client relationship with any reader and should not be construed as legal advice.  If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.

 

Is The Estate Tax Irrelevant?

By | Estate taxes | No Comments

How often do you hear comments regarding the tax rates on the super-wealthy?  Depending what side of the aisle you are on, you might think the government should tax more or tax less, but rarely have I heard the comment, “Income tax does not apply to me.”  We all know that we are going to pay an income tax, the question centers around how much.

As an estate planning attorney, it is more concerning to hear comments with regard to the estate tax, “The estate tax does not apply to me, so I don’t need to plan.”  Estate tax planning represents a very small percentage of the work we do for clients.  Since we have to fill up the rest of the work week with actual work for people such as you, what do you think we do?

We don’t draft wills, at least not in the traditional sense.  We create personalized solutions that go beyond the estate tax.  With most frequency, we advise our clients to consider a living trust structure that will maximize protection of assets for those you care about..  A living trust also avoids probate, and if you haven’t had to file a probate proceeding for a loved one – you are fortunate.  It is typically expensive and stressful, and court proceedings are a matter of public record.  The plan ensures your assets are protected for the benefit of your kids or your favorite cause, ultimately to ensure your assets don’t end up in the wrong hands (only you know who that is).

 But is the estate tax irrelevant to your plan?  It might be true that the estate tax is not applicable (your estate will probably not pay estate tax when you die) if we are talking about the current federal estate tax exclusion amount, which in 2016 is $5.45 million dollars.  For married couples the exclusion can be $10.9 million dollars.  That means under the current estate tax rate, you and your spouse have to own more than $10.9 million in assets to pay estate tax when you die.   So, yes, it is true that most U.S. citizens will not pay estate tax…unless Congress changes the estate tax code in the future.

Most people fixate on the estate tax exemption amount and continue to assure themselves, falsely, that the law does not apply to them.  I have had clients recently tell me with certainty that “the estate tax exemption amount will not change.”  I don’t see that particular forecast in my crystal ball (but if you are really interested, maybe you should try an appointment with a celebrity medium like Tyler Henry https://twitter.com/tyhenrymedium who will likely be able to clarify a lot more than just the future of the estate tax regime!).  I cannot say with any certainty that the estate tax exemption amount will or will not be lowered in the future, but if it is, have you already planned for it?

As estate planning attorneys, our task is to plan and mitigate future possibilities and risks.  When we draft a comprehensive estate plan our goal is to ensure your wishes with regard to your assets are upheld.  Once we have valued your estate to determine whether the estate tax is likely to apply to your estate at any point in the future, we use our knowledge and estate planning tools to apply all related laws to protect you, your family and your assets.  Come see one of our estate planning attorneys to develop or update your plan today.

 

Leslie 2 x 3 copy   Contributed by Morris Hall, PLLC Albuquerque Estate Planning Attorney Leslie M. Thompson.

 

About Morris Hall, PLLC:
At Morris Hall, PLLC we have focused our legal practice on estate planning for over 45 years.  Along with estate planning, our attorneys help clients and their families with matters of probate, trust administration, wills, power of attorneys, business planning, succession planning, legacy planning, charitable gifting and other important legal aspects.  We also have divisions in financial, real estate and accounting to help you incorporate all of your planning together, ensuring that everything works perfectly for your needs and situation. Our Arizona offices are located in Phoenix, Mesa, Scottsdale, Carefree, Tucson, Oro Valley, Prescott, Sedona, Flagstaff and Arrowhead.  Our New Mexico offices are located in Albuquerque, Las Cruces and Santa Fe.  Contact us today at 888.222.1328 to schedule an appointment!

This blog should be used for informational purposes only.  It does not create an attorney-client relationship with any reader and should not be construed as legal advice.  If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.

Too Young to Die

By | Estate Planning, Preparedness | One Comment

A high school friend’s husband died the other day.  I am mad.  Though I am feeling old, I am actually in the prime of life, and people my age should not die.  Unfortunately, what should happen and what actually happens are two different things.

I am mad at my friend’s situation – a forty-two year old with two young daughters and a loving wife should not be taken from this world.  His presence is needed to help shape the minds and values of his young girls, and to give life-long support to his wife, my friend.

I am mad at the injustice, the unfairness of it all – by all accounts he was a truly good man.  He was loved by all those he encountered.  He was not someone who “deserved” this fate.

I am mad at the viciousness of cancer – he fought a valiant fight, and for a time looked to be ahead, but the cancer came back stronger, ripping away the rest of his life.

I am mad that his, and all the other similar stories that we hear, that go unheeded – we all know people who were taken too soon.  As you think of those people, those friends, those loved ones, the one common theme is that “it won’t happen to me.” I know this because of my job.  I know this because very few families put an estate plan in place, in general, even fewer if under the age of 55.

Death and loss are not easy.  There are no actions or magic words that make the pain of loss “all better.” However, by putting together plans, by helping clients prepare for the inevitable, we have the opportunity to make a difficult time easier, more manageable.  We get to help give families the peace of mind they deserve.  We get to help prepare people for one of life’s few certainties, no matter when that may happen.

Although today I am mad, I know the work we do for those who do listen to those stories make a difference in their lives.  It makes me feel good.

jim-plitzContributed by Morris Hall, PLLC Albuquerque, Santa Fe and Las Cruces Estate Planning Attorney, and Partner James P. Plitz.

About Morris Hall, PLLC:
At Morris Hall, PLLC we have focused our legal practice on estate planning for over 45 years.  Along with estate planning, our attorneys help clients and their families with matters of probate, trust administration, wills, power of attorneys, business planning, succession planning, legacy planning, charitable gifting and other important legal aspects.  We also have divisions in financial, real estate and accounting to help you incorporate all of your planning together, ensuring that everything works perfectly for your needs and situation. Our Arizona offices are located in Phoenix, Mesa, Scottsdale, Carefree, Tucson, Oro Valley, Prescott, Sedona, Flagstaff and Arrowhead.  Our New Mexico offices are located in Albuquerque, Las Cruces and Santa Fe.  Contact us today at 888.222.1328 to schedule an appointment!

This blog should be used for informational purposes only.  It does not create an attorney-client relationship with any reader and should not be construed as legal advice.  If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.

 

Morris Hall Ranked Number One Estate Planning Firm by Ranking Arizona

By | E-Alert, Other | No Comments

Phoenix – The law firm of Morris Hall, PLLC (MH) has been ranked by Ranking Arizona as number one for 2016 in two categories, Estate and Trust Law Firm in Arizona and Law Firm with Twenty or Fewer Attorneys.

 

Ranking Arizona is Arizona’s largest opinion poll, with categories of services determined by the staff of Arizona Business Magazine. The ranking is determined by voting throughout the year by the general public for outstanding performance in a variety of services and industries.

 

MH has dedicated its practice to estate planning for over 40 years, and for the last 20 years has engaged exclusively in estate planning and supporting areas of the law.  The firm is a member of the American Academy of Estate Planning Attorneys.  As a result of this membership and its exclusive estate planning practice, MH takes pride in providing the best estate planning strategies, documents and service available.  

 

“We are honored to once again be ranked #1 by our clients and the communities that we serve,” stated Dan Morris, senior partner of MH. “There is no greater privilege than being selected to help ensure the happiness and well-being of clients and their families and beneficiaries. It is a responsibility that we take very seriously.”

 

With 10 attorneys and 40 paralegals and support staff members, MH offers a very personal level of trustworthiness, reliability, compassion and concern.  With estate planning there is no such thing as a typical client; MH structures its documents and services to the particular needs of each individual, The desire and focus of the attorneys and staff at MH is to provide peace of mind and security for every client, that they know that their estate plan will protect them while they are alive, and will support their beneficiaries when they are gone.

 

About Morris Hall, PLLC:
At Morris Hall, PLLC we have focused our legal practice on estate planning for over 45 years.  Along with estate planning, our attorneys help clients and their families with matters of probate, trust administration, wills, power of attorneys, business planning, succession planning, legacy planning, charitable gifting and other important legal aspects.  We also have divisions in financial, real estate and accounting to help you incorporate all of your planning together, ensuring that everything works perfectly for your needs and situation. Our Arizona offices are located in Phoenix, Mesa, Scottsdale, Carefree, Tucson, Oro Valley, Prescott, Sedona, Flagstaff and Arrowhead.  Our New Mexico offices are located in Albuquerque, Las Cruces and Santa Fe.  Contact us today at 888.222.1328 to schedule an appointment!

 

This blog should be used for informational purposes only.  It does not create an attorney-client relationship with any reader and should not be construed as legal advice.  If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.

 

Is It Time to Update my Estate Plan?

By | Attorney David Eastman, Estate Planning | No Comments

There have been some significant changes in the estate planning realm in the last few years. If you have not updated your estate plan in the last 3 years it may be time for a tune up. Often we are asked in our firm how often an estate plan should be updated. The answer to that is - it depends. It depends on your goals and what it is you are trying to achieve with your estate plan. It depends on whether things have changed in your life since the plan was originally put into place. The real question is not how often it should be updated, but how often should it be reviewed by an estate planning attorney? Our recommendation is at least every 3 years you should have a review of your estate plan with your estate planning attorney. This will ensure that things are up-to-date and working accordingly. Below are a few of the important changes that have taken place in the last 3-6 years.

 

Medicaid Triggers – If you need to go to a nursing home or need other long-term care, Medicaid triggers allow your Trustee to allocate the assets in a manner to help prevent everything you own from being spent-down in order to qualify for Medicaid.  Without the Medicaid triggers in your Trust and Property Power of Attorney, your assets will have to be spent-down before you can qualify for Medicaid. .

 

Beneficiary Trust – We hardly ever want an outright distribution to beneficiaries.  If beneficiaries get assets in their own names, they are subject to the loss of all their assets in the event of a bankruptcy, a claim by a creditor, or an ex-spouse in a divorce. Furthermore, if a beneficiary has a substance abuse problem or is not acting in a responsible manner, he or she could waste the legacy you left behind for them.  If your Trust is properly drafted, distributions to your beneficiaries are kept in an irrevocable trust and can be protected from the above perils.

 

HIPAA – Authorization to Disclose Protected Health Information – No one has the surety of obtaining your personal health information, which is now “protected” under the Health Insurance Portability and Accountability Act, unless they have the proper HIPAA form. This is a form proscribed by federal law.  It needs to be in the proper format in order for your agents and family members to have access to your medical information if they need to make decisions about your health care or to exercise your elections under your Living Will.

 

Mental Health Care Power of Attorney – If you need the highest level of mental health evaluation and do not have a Mental Health Care Power of Attorney, you are facing the necessity of a court order, which comes only after the court appoints potential strangers to be your attorney, physician and social worker.  The process in the courts is very expensive, time consuming and invasive.  The Mental Health Care Power of Attorney allows the evaluation without court involvement.

 

Decanting and Special Co-Trustee Provisions – The decanting provisions of the Arizona Trust Code provide greater ability for the survivor to have the trust amended after the first death.  They also give your beneficiaries better flexibility and protection with their separate beneficiary trusts after you are both deceased.  Upon the first death, the decedent’s share is placed into an irrevocable trust, known as the Family Trust, or commonly, the B trust.  The survivor cannot make changes to this trust, even if there are changes in the law that would make changes necessary or advisable.  When you are both gone, your beneficiaries cannot make changes to their beneficiary trusts.  If the survivor or the beneficiaries could make changes, the trusts would not be irrevocable, there would be no protection from creditors, ex-spouses, bankruptcy, and the estate could be subject to estate taxes.  If there are changes in the law that must be addressed in the irrevocable trusts and your trust contains the decanting powers and special co-trustee provisions, the survivor or beneficiary, as the case may be, can create a new irrevocable trust with all the necessary provisions, and a special co-trustee can decant, or pour, the assets from the existing irrevocable trust into the newly created trust that contains all of the necessary updates.

 

Arizona Trust Code Reporting Requirement - Under the Arizona Trust Code, once a trust becomes irrevocable (the Family or B trust upon the first death), the trustee has the obligation to give a detailed annual accounting to all of the beneficiaries.  This includes all money earned or spent by the trust, and a valuation of all assets, among other matters.  If any of the beneficiaries is a charity, the trustee may also have to provide the annual report to the Arizona Attorney General’s office.   It is possible to amend your trust to avoid this invasive and expensive requirement.

 

New Certification of Trust – Most estate plans include an old Certificate of Trust, a one or two page document that is proof that you have a trust.   If you opened an account at a bank or brokerage firm or elsewhere, the Certificate should have sufficed to prove to the institution that you have a trust, and should have given enough information for the institution to open the account in the name of the trust.  However, we have found that many institution are requiring a complete copy of the trust.  There is no legal requirement for such a demand; the institutions do not need an entire copy; they do not understand your trust when they get it; they probably don’t know what to do with it; and now your information could be in their database.  If you have the new Certification of Trust with the provisions and formatting set forth under the Arizona Trust Code, all you need to provide as proof of your trust, absent a showing of real need, is a copy of the first and last pages of your trust with the Certification.  This helps protect your privacy.

 

Community Property Agreement – If you convert all of your jointly held assets to community property, they get a full step-up in tax basis upon the first death.  If the survivor needs to sell an asset, he or she will not have to pay any capital gains tax on gains accrued since the asset was acquired.  There are only nine community property states in which this is available, and fortunately, Arizona is one of these states.  Recent Supreme Court decisions have made it possible for a properly drafted Community Property Agreement to convert IRAs, 401(k)s and other retirement assets to community property, giving much better flexibility and protection to the surviving spouse.

 

Special Formula General Power of Appointment – Although a proper Community Property Agreement will provide a full step-up in tax basis of assets on the first death, there will almost always be capital gains taxes upon the second death.  As the family, or B Trust is irrevocable, it takes the cost basis as of the first death.  Upon the second death, the increased value of the assets in the B trust from the date of the first death trigger a capital gains tax when sold by the beneficiaries.  It is now possible to wipe out any capital gains taxes in the B trust after the surviving spouse passes away This can now create a step-up in tax basis of all assets on the second death and allow your beneficiaries to avoid capital gains taxes.

 

Qualified Trust – You must be very careful how you coordinate any IRA, 401k, 403b, pension plan or other qualified (tax deferred) assets with your trust.  If you simply make your trust beneficiaries the named beneficiaries of your retirement plans, they will not have the same protections of the beneficiary trust discussed above.  If you make your trust the beneficiary of the qualified plans, and it is not a qualified trust, it will cost your beneficiaries up to 40% in federal and state income taxes.  This becomes an extremely important issue.  To receive all the protection for beneficiaries without exposing them to extra income taxes, you must include in your trust the technical provisions of IRS Code Section 401 (a)(9) and the corresponding regulations.  Adequately drafted qualified trusts, with proper funding, are very rare.

 

Discretionary Distribution – Upon the passing of the first spouse, the survivor is typically the trustee under both the survivor’s trust and the family /B trust.  And typically, the intention of the couple is that the survivor will have full access to all assets in both trusts.  Almost all trusts provide that upon the death of one spouse, the survivor shall receive all the income from the B trust.  However, if the survivor gets in a wreck and gets sued, a judgment creditor stands in his or her shoes, and if there is a mandatory distribution of the income from the B trust to the survivor, the creditor can get it.  Likewise, if the survivor has to go into a nursing home or receive other long-term care, he or she could have to spend all of the B trust assets before qualifying for Medicaid.  It is now possible to give the survivor, as trustee, discretion to take from the B trust anything necessary for health, education, maintenance and support, all the income, and even an annual percentage of the B trust assets; if this is done at the discretion of the survivor, or other trustee, it offers much more protection from other persons or entities.

 

If you would like additional information on any of these changes please feel free to give us a call. If you have not been in to see your estate planning attorney in the last three years do not procrastinate. Make your appointment today to have your estate plan reviewed. Many of these changes could end up saving your loved ones thousands of dollars when you become incapacitated or pass away.

 

dave-eastmanContributed by Morris Hall, PLLC Arrowhead, Phoenix and Scottsdale Estate Planning Attorney and Partner, David T. Eastman.

 

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This blog should be used for informational purposes only.  It does not create an attorney-client relationship with any reader and should not be construed as legal advice.  If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.