When choosing the direction to take in estate planning, it’s important to consider the impact on income tax basis. This article examines the nature of basis and follows an example from acquisition of property to death and looks how basis is adjusted along the way. Since the property is included at death, the basis receives a step-up to the value of the property at death. Upcoming articles will examine how common estate planning strategies impact income tax basis.
Perhaps the largest part of most Americans’ wealth is in their qualified plan or IRA. Planning for these assets is one of the most important parts of the estate plan, for many reasons. This article will discuss the importance of beneficiary designations.
Trusts can be very flexible. One of the ways to add flexibility is by using powers of appointment. This article will examine what a power of appointment is and how it may be used to add flexibility to a trust. An upcoming article will examine the tax consequences of powers of appointment.
What’s the right direction for you in planning for future medical expenses? The odds are even that you’ll need long-term care (LTC) after age 65, at least for a while. Here are possible paths for covering those potential costs.
The new tax law doubled the estate tax exclusion through 2025. This article looks at the exact amount of the new exclusion (it’s not what you thought) and how it might be useful. The article also examines why there’s no reason not to take advantage of the newly-doubled exclusion.
Perhaps you would prefer to take a charitable deduction this year. Maybe you have higher income this year, or the reduced ability to take a deduction next year. A donor advised fund may make sense for you. A donor advised fund allows a deduction this year, even though distributions will be made to public charities in future years. Read on to learn more about a donor advised fund.
If you are one of the millions of Americans who has struggled to get a small business off the ground, you likely have a small fortune invested in your business, in terms of money, time, energy, and concern. You probably went to the trouble and expense to purchase a variety of business insurance policies to protect your investment in the event of a natural disaster, theft, or accident. How will your business survive, though, if something happens to you? Have you planned for the potential tax consequences of passing your business down to the next generation? Have you even assured that your business will pass to your desired beneficiaries? If you prefer that the business be sold and the profits used to support your family when you are gone, are you certain your loved ones will receive a fair price for the business? All of these questions can be answered by including Phoenix business succession planning in your comprehensive estate plan.
Why Do I Need to Incorporate Business Succession Planning into My Estate Plan?
Business succession planning is necessary if you care to protect your financial – and even emotional – investment in your business, as well as to ensure that it makes a successful transition to the next generation. To illustrate the importance of business succession planning, ask yourself the following questions:
Common Strategies for Business Succession Planning
The best way to ensure that your business is protected if something happens to you, and that it is handled according to your wishes upon your death, is to include business succession strategies in your overall estate plan. Some common options include:
Contact a Phoenix Business Succession Planning Lawyer
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about business succession planning , contact an experienced Phoenix estate planning lawyer at Morris Hall PLLC by calling 888-222-1328 to schedule your appointment today.
Clients often want the simplest estate planning solution possible. However, the simplest solution is doing nothing. Usually, doing nothing does not result in the desired outcome.
Caring for a spouse with dementia can be emotionally, physically, and financially draining. As one, Arizona man found out, it can also lead to a frustrating and expensive battle in probate court if you did not plan ahead for the possibility of incapacity. The good news is that with proper advanced planning, you can avoid finding yourself in the same situation at some point in the future.
Bob’s Story
According to an interview conducted by azcentral.com, Bob McGuire and his wife Linda moved to Surprise, Arizona a few years ago after Bob retired from the Navy. After Linda was diagnosed with dementia about a year ago, the medical expenses began to add up. To help cover those expenses, Bob attempted to access a modest Individual Retirement Account (IRA) of Linda’s; however, Bob was denied access because the account was in her name only. Given that Linda is no longer able to give her legal consent due to dementia, Bob’s only recourse was to petition for guardianship and conservatorship over his wife, a process he thought would be fairly simple and straightforward. Thousands of dollars in court costs and legal fees later, Bob may end up losing one-fourth of the value of the IRA in his attempt to get access to it.
Navigating Probate Court
Probate court handles the administration of Wills and estates, but also oversees adult guardianship and conservatorship. Currently, Maricopa County probate court has about 22,000 active cases and the court has seen an annual increase of six to seven percent a year in recent years. As part of the guardianship process, the law requires the court to appoint an attorney to represent the interests of the proposed ward (the incapacitated person). That attorney is entitled to a fee for his/her services. That fee, along with all the other legal costs and fees associated with the process, can make petitioning for guardianship an expensive, and time consuming, endeavor.
Could the Need for Guardianship to Access the IRA Have Been Avoided?
Given the amount of time and money Mr. McGuire has been forced to invest in the guardianship process, the obvious question is “Could the need for guardianship to access the IRA have been avoided?” The simple answer is “yes.”
A well thought out and properly drafted estate plan typically includes an incapacity planning component because the reality is that incapacity can strike anyone at any time. Although every incapacity plan is unique, some common incapacity planning tools and strategies that could have helped Mr. McGuire’s access the IRA without the need to petition for guardianship include:
Contact an Arizona Estate Planning Lawyer
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about guardianship, incapacity planning, or probate avoidance, contact the experienced estate planning lawyers at Morris Hall PLLC by calling 888-222-1328 to schedule your appointment today.
Clients often want the simplest estate planning solution possible. While keeping it simple is an understandable goal, the simplest solutions are not often the best. This article shows a couple simple solutions for estate planning and why, in most circumstances, a living trust is at the center of a more robust estate plan and more likely to provide the desired protections.
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