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Attorney David Eastman

Planning for your frequent flyer miles. How Anthony Bourdain did it.

By | Attorney David Eastman, Celebrity Estates | No Comments

 

 

 

 

 

Anthony Bourdain did something most American's fail to do- he created an estate plan and laid out exactly who he wanted to get what when he died. I think that most of us would have imagined that he would have had a larger estate than he did with his success he had later in his life, but it is not about how much you have when you pass on but rather what you do with it when you pass on. He made sure his one and only child was provided for and he did something most of us forget to do - he planned for his frequent flyer miles. Your estate plan should include provisions regarding what you want to have happen to your frequent flyer miles when you pass away. Each airline has different rules and regulations on what can be done with these valuable assets upon the owner's demise so you need to read the contract very carefully, but most of them should allow for you to pass on these miles to your loved ones after you die. Some clients have passed these miles on to some great charities like Make-A-Wish, thereby allowing the charity to grant wishes to children who are terminally ill. There are many planning opportunities with these types of assets. If you have not planned for your frequent flyer miles come in and see us and we can talk about how you can leave these to your loved ones.

 

You can read the full story about Anthony Bourdain's estate plan here https://www.forbes.com/sites/megangorman/2018/07/06/why-anthony-bourdains-estate-plan-reflected-the-two-most-important-parts-of-his-life/

For more information on estate planning or to find seminars in your area, visit us at morristrust.com or call 888-222-1328.  

Phoenix Trust Attorneys Explain Trust Administration

By | Attorney David Eastman, Trust Administration | No Comments

Phoenix trust attorneysA well thought out estate plan will typically include more than just a Last Will and Testament. Although every estate plan is as unique as the individual who created the plan, a common addition found in many plans is a trust agreement. Trusts are frequently used in estate planning because of their flexibility and because of the numerous and varied estate planning goals that can be served using a trust. If you decide to include a trust in your estate plan, one of the most important decisions you will need to make during the creation of your trust is who to appoint as the Trustee of your trust. The Trustee of a trust is responsible for administering the trust as well as managing and investing trust assets. To help ensure that you appoint the right Trustee for your trust, the Phoenix trust attorneys at Morris Hall PLLC explain some trust administration basics.

The Importance of Appointing the Right Trustee

One of the most common mistakes a Settlor (the creator of a trust) can make is to appoint the wrong person as Trustee. This often happens when a Settlor appoints someone close to them, such as a spouse, close friend, or relative as the Trustee based solely on their relationship to the individual instead of on the individual’s ability to perform the job of Trustee well. Ultimately, this can lead to the failure of the trust if the Trustee ends up in over his/her head and doesn’t seek the help and guidance of a professional in time. To avoid making this common mistake, make sure you have a firm understanding of what is expected of a Trustee and then take the time to choose the right person for the job.

What Is Involved in Trust Administration?

Appointing the right Trustee begins with understanding the duties and responsibilities involved in administering a trust, such as:

  • Following trust terms -- the Trustee of a trust is required to abide by the terms of the trust, as created by the Settlor, unless a term is illegal, impossible, or unconscionable. This requires the Trustee to understand the terms and to have the ability to follow a term even if the Trustee doesn’t personally agree with the term.
  • Managing trust assets – this could require something as simple as monitoring and filing bank statements or something as complex and time-consuming as handling the maintenance and upkeep of real property or a business.
  • Investing trust assets – ideally, the assets held in a trust are income producing assets. This, however, requires the Trustee to invest those assets wisely. A Trustee must always use the “prudent investor standard” which dictates conservative investments wherein the trust principal is never at risk.  Moreover, because a Trustee is in a fiduciary role, he/she must be more careful with trust assets than the Trustee would be with his/her own assets.
  • Keeping detailed records – because a Trustee is managing assets intended to benefit a third party, and receives a fee for that management, very detailed records should always be kept.
  • Communicating with beneficiaries – a Trustee is responsible for keeping beneficiaries informed of all trust business in a timely manner.
  • Resolving conflicts – if a conflict arises the Trustee must defend the trust in any litigation. If the conflict is among beneficiaries, a Trustee should act as a mediator to try and resolve the conflict.
  • Paying taxes – a trust is a separate legal entity, meaning taxes must be prepared and paid each year by the Trustee. Even if a Trustee hires a CPA to prepare the trust taxes each year, the Trustee should have sufficient financial skills to understand the tax return and any obligation the trust has for paying gift and estate taxes.
  • Distributing assets – the Trustee is responsible for distributing trust assets to the designated beneficiaries according to the terms of the trust. 
  • Making discretionary decisions – typically, a Trustee has some degree of discretion. Some Settlors give a Trustee only a token amount of discretion in case of an emergency while others provide a Trustee with the discretion to make major trust decisions.

Contact Arizona Probate Lawyers

For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about probate avoidance, contact the experienced Arizona probate  lawyers at Morris Hall PLLC by calling 888-222-1328 to schedule your appointment today.

 

Summary of Potential Tax Law Changes Under President Elect Trump:

By | Attorney David Eastman, Estate Planning | 2 Comments

We live in uncertain times. There is no certainty in what President Elect Trump will do when it comes to the tax code, but he has stated that he would like do the following:

  • Eliminate the estate tax entirely.
  • Eliminate the gift tax entirely.
  • Presumably, eliminate the Generation Skipping Transfer tax entirely.
  • Disallow a step-up in basis for the assets of decedents with estates over $10 million.

However, we don’t know if this will be a high priority or whether Democrats would filibuster such changes.

As far as income taxes go, he has proposed the following: 

  • Cap deductions at $100,000 for individuals and $200,000 for a married couple filing jointly.
  • Increase the standard deduction to $15,000 for individuals and $30,000 for married filing jointly.
  • Reduce the federal tax brackets from 7 to 3, with rates of 12%, 25%, and 33%.

Current estimates are that Trump’s tax plan would:

  • Reduce taxes for low income earners by an average of 1.2%.
  • Reduce taxes for highest income earners by 10.2%.

According to a piece in Fortune, Trump’s plan would add $5.3 trillion to the federal deficit over 10 years.  

 

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

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, Green 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.

 

Tragedy Can Strike at Any Time

By | Attorney David Eastman, Estate Planning | No Comments

We all know the old saying- there are two things in life we can be certain of- death and taxes. We all know we are going to die; we just don’t know when we are going to die. We all hope it is a long way off, but it could happen to any one of us any day.

I had a good friend of mine that recently returned from a bicycling race he did back east. The trip took him through Washington DC, New Jersey and New York. He was riding for fallen officers. Officers that had lost their life protecting and serving the Phoenix Community. He arrived home late Saturday evening on September 17th. As some of you may be aware, pipe bombs exploded in New Jersey and New York on September 17th injuring dozens of people. Needless to say he is very glad he made it home safe and sound, but reality has hit him pretty hard as to how close he could have come to something very tragic happening. He told me he was in both of the exact same vicinities where the bombs went off just days before.

We all hope to live to a ripe old age and just die in our sleep with no pain or discomfort. Reality is most of us will never do that. Death and serious illness or injury come very unexpectedly most times. It is important that we are prepared for when that time does come. The best way to do that is to have our affairs in order today. Do not procrastinate. There is no time like the present time to plan for things in life we know are certainties. We all know we are going to die; it’s just a matter of how prepared for it you’re going to be.

Some simple steps to take to be prepared:

  • Get your estate plan in order
  • Review your life insurance policies and long term care insurance policies
  • Look into a prepaid burial plan
  • Make a list of your assets and where to find your important legal documents
  • Make a list of all of your monthly bills and who to contact if you should die
  • Make a list of your credit card companies and how to contact them
  • Make a list of the important people that should be contacted if you die

Take the Boy Scout motto to heart- BE PREPARED.

 

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

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, Green 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.

 

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.

 

Christmas Present from Our Legislatures:

By | Attorney David Eastman, Estate Planning | No Comments

If you are philanthropically minded and want to make a charitable donation before the end of the year Congress just passed the Protecting Americans from Tax Hikes Act of 2015, which now makes it possible for you to contribute to a public charity of your choosing up to $100,000 from your IRA. There are some strings attached in order to take advantage of this wonderful gift Congress has given to us:

  • You must be 70 ½ or older;
  • You cannot give more than $100,000;
  • It must be to a public charity directly from your IRA;
  • It cannot come from a 401k or other retirement plan, unless you first move it to an IRA.

By making the charitable donation this way- directly from the IRA to the charity- you don’t have to realize on the income for income taxes purposes on the amount distributed to the charity and you would qualify for the charitable deduction.

So if you are in the spirit of giving during this time of year Congress has just given you a great opportunity to make a donation to your favorite charity from your IRA or Roth IRA.

If you miss out on taking advantage of this charitable donation this year- fear not- Congress made it applicable for not only 2015, but for all future years as well.

 

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

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.

 

Thanksgiving

By | Attorney Andrea Claus, Attorney David Eastman, Holidays | No Comments

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On October 3, 1789, President George Washington named Thursday, November 26, 1789 an official holiday of “sincere and humble thanks.” In the midst of the Civil War in 1863, President Abraham Lincoln issued a proclamation in which he declared the fourth Thursday of every November to be a day of Thanksgiving.

“I do therefore invite my fellow citizens in every part of the United States, and also those who are at sea and those who are sojourning in foreign lands, to set apart and observe the last Thursday of November next, as a day of Thanksgiving and Praise to our beneficent Father who dwelleth in the Heavens.” ~ Abraham Lincoln

For many Americans, Thanksgiving is a day devoted to eating, watching football, eating, shopping, and if there’s still room – eating some more. Although traditional meals and activities like football may be the first things people remember about this holiday, Thanksgiving and all its precursors were based on the principle of gratitude. Whether it was being grateful for a harvest or for the end of a war, or for the relief of a city under siege or for freedom, the underlying purpose was an expression of thankfulness.

As we celebrate this Thanksgiving, let us express gratitude for the family and friends we hold most dear. Let us take a step back from the festivities and food, and reflect upon our freedoms and the sacrifices made to secure that freedom. Let us be grateful for the bounties of life that we enjoy and endeavor to impart some of our substance to those less fortunate.  Simply put – let us all be thankful!

Happy Thanksgiving from Morris Hall, PLLC.

Penny Wise and Pound Foolish; Doing Your Estate Plan on the Cheap:

By | Attorney David Eastman, Estate Planning, Living Will, Other, Preparedness | No Comments

Most of us work very hard to accumulate our nest eggs. Sacrifice of time and energy, is often made to acquire the assets that we have. To ensure that these hard earned assets will be distributed where we want, how we want, and be managed by whom we want, it is critical to have the necessary legal documents in place.

To save a few bucks, people often look to “do-it-yourself” software programs to create their personal estate plans. Be very careful of these shortcuts. As the old adage states: Penny wise, pound foolish. Don’t work your whole life acquiring your nest egg simply to leave it to chance that everything will work out when you are incapacitated or dead.

A 2011 ConsumerReports.org article described that after testing LegalZoom estate planning documents and other software programs similar to LegalZoom, it was determined that “…unless your needs are very simple - say, you want to leave everything to your spouse with no other provisions - none of them are likely to meet your needs.” Consumer Reports found issues throughout the LegalZoom documents and found them unsatisfactory to use in most instances.

Preparing one’s own estate planning documents through an online legal document service can be a risky proposition. Estate planning has many nuances. It often addresses complex and technical points of law, and covers a broad range of issues even if a person does not have substantial assets. As stated in the disclaimer on its website, LegalZoom and its services are not a substitute for the advice of an attorney; it does not apply the law to the facts of a particular situation, and the information on its website is not guaranteed to be correct, complete, or up-to-date.

An experienced estate planning attorney adds significant value to the process to help ensure that a costly mistake, which may not be discovered until a crisis develops, doesn’t occur. A qualified attorney stays current on developments in the law, which helps ensure the plan is current and drafted effectively, and meets the individual’s objectives and needs.

Developing a relationship with a good estate planning attorney allows you to have a trusted advisor who can provide guidance on your most important lifetime decisions and to assist your family when you are gone.

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

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.

Do I need an A/B trust?

By | Attorney David Eastman, Estate Planning, Other | No Comments

I had an interesting conversation today with one of our clients.  The sole purpose of them coming in to see me was to discuss whether they needed to have an A/B trust in place, which is what we had created for them.  I asked what prompted them to ask that question and the response back to me was that they had attended a seminar where an estate planning attorney here in town had advised them that they did not need an A/B trust any longer and they really needed to restate their whole trust. I asked what his reasons were for them not needing an A/B trust any longer and they informed me that his answer was that there was a new and better way of doing things and nobody needs an A/B trust any longer.

Often times at my seminars I tell the audience there are bad mechanics, bad doctors, and bad dentists, and then I ask them, in a half sarcastic tone, are there any bad attorneys? They usually all start laughing, knowing full well there are bad attorneys. Unfortunately, there is some bad advice being given out there, and telling a client that they do not need an A/B trust can be bad advice.

So why would a client need an A/B trust? There are many reasons, but the one that seems to be focused on most is to avoid or minimize paying an estate tax. The argument can be made that since there is a $5 million estate tax exemption, indexed for inflation, there is no need to have an A/B trust, if an estate does not exceed this amount. This is being shortsighted in my opinion. If the sole reason for doing an A/B trust was for tax reasons then there may be an argument to not have an A/B trust, but the reality is there are other reasons to do an A/B trust that have nothing to do with taxes.

One of the reasons why an A/B trust is so good is because we can protect up to half of the estate value in the B trust when one spouse dies from future creditors of the surviving spouse.  This seems like a pretty important and relevant goal considering there are approximately 1 in 12 Americans that are involved in some type of litigation.

Another important reason for doing the A/B trust is to protect the decedent’s heirs in the event the surviving spouse gets remarried. If this happens then we can ensure that the estate of the decedent is passed on to his/her heirs instead of the new spouse that the surviving spouse just married. We can also protect up to half of the estate in the event the surviving spouse gets divorced from the new spouse. This can be a very significant protection to both the surviving spouse and the deceased spouse’s heirs considering 50% of all marriages end in divorce.

Finally, one of the other reasons we recommend doing the A/B trust is that in addition to there being a federal estate tax there are also state estate taxes, and most state estate tax exemptions are less than the federal estate tax exemption.  Currently the state of Arizona does not have a state estate tax, so Arizona is still a good state to die in, but things could change. Arizona could adopt a state estate tax or you could end up moving to a state that does have a state estate tax when your health starts to decline and you want to be closer to your kids. By having an A/B trust in place it will mitigate any state estate taxes as well as federal estate taxes.

 

It is crucial that you meet with an attorney that knows what they are doing when it comes to estate planning.  Unfortunately there are many people out there that profess to know how to do estate planning, but lack the skill and knowledge to give good sound advice when it comes to these important matters.  The people that end up paying for that bad advice are the general public.  The attorneys at the law firm of Morris Hall have been doing estate planning for over 40 years in Arizona.  We belong to a nationally recognized institution, the American Academy of Estate Planning Attorneys. We have given numerous seminars to both the private and public sector on various estate planning topics.  If you are interested in sitting down with one of our estate planning attorneys for a free consultation please feel free to give us a call.

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

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.

Tom Brokaw’s Living Will:

By | Attorney David Eastman, Guardianship, Healthcare documents, Living Will | No Comments

The purpose of this blog is to recommend every American to outline directives for doctors to follow if they were ever in a Terry Schiavo situation.  If you are unfamiliar with the Terry Schiavo case, a quick summary here will suffice:

 

Terry Schiavo suffered a cardiac arrest in her home in Florida in 1990.  She suffered major brain damage as a result. Her doctors diagnosed her as being in a persistent vegetative state. From 1998 to 2005, her husband and parents engaged in a fierce legal battle over whether to keep her on life support or not.  The legal fees to settle this matter were in excess of $1 million. Finally, on March 18, 2005, after 14 appeals and numerous motions, petitions, and hearings in the Florida courts; and after five suits in federal district court; struck down legislation by the Supreme Court of Florida; enactment of federal legislation (the Palm Sunday Compromise); and four denials of certiorari from the Supreme Court of the United States, the feeding tubes were removed.

Everyone in a persistent vegetative state should have the right to decide how they want their life to end.  We should never have the courts or the government interfering with this life decision.  The best way to insure that your wishes will be carried out, should you be in a Terry Schiavo situation, is to have a Living Will in place.

A Living Will is a physician’s directive that tells doctors whether you do or don’t want to be kept on life support if you are in a persistent vegetative state.  A Living Will would have prevented the courts and government from meddling in Terry Schiavo’s personal matters, had a Living Will been prepared prior to her cardiac arrest.

 

Once you have created your Living Will, it is critical to then talk to your loved ones about your wishes and how you want those wishes carried out. It is also vital that your loved ones know where your Living Will and other estate planning documents are kept. In an article titled, Do Your Clients Have the Same Problems as Tom Brokaw?, Randi Siegel, President of DocuBank, talks about where and how these documents should be kept so they can be accessed by your loved ones in times of emergency.

To be kept on life support is a personal decision.  It is a decision that you should make while you have the mental capacity to make such decisions; it should not be made by some government official or judge. Please take the time to have this important document created for you and your loved ones.  Please call us to schedule an appointment so we can create a living will for you and your loved ones.

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

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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.