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Estate taxes

Phoenix Estate Planning Attorneys Explain the Lifetime Exemption

By | Estate taxes | No Comments

Phoenix estate planning attorneysA well thought out estate plan does much more than simply decide what happens to your estate assets at the end of your life. It also protects those assets and helps them grow over the course of your lifetime. One of the many factors a successful estate plan must take into consideration is the impact federal gift and estate taxes will have on your estate. Fortunately, every taxpayer is entitled to make use of the lifetime exemption which limits your estate’s exposure to gift and estate taxes. The Phoenix estate planning attorneys at Morris Hall PLLC explain the lifetime exemption and its effect on your estate.

The Federal Gift and Estate Tax

The federal gift and estate tax is effectively a tax on the transfer of wealth that is collected from your estate after you die. Every estate is potentially subject to federal gift and estate taxes. The tax applies to all qualifying gifts made during a taxpayer’s lifetime as well as all estate assets owned by the taxpayer at the time of death. To illustrate how the tax works, assume that you are single and made qualifying gifts during your lifetime valued at $5 million. In addition, at the time of your death, you owned assets valued at $12 million. The combined total of $17 million would be used to determine your estate’s exposure to federal gift and estate taxes. The federal gift and estate tax rate fluctuated historically; however, the American Taxpayer Relief Act of 2012 (ATRA) permanently set the rate at 40 percent. Without any deductions or adjustments, that $17 million estate would owe $6.8 million in federal gift and estate taxes.

Incorporating the Lifetime Exemption

Whether you leave behind an estate valued at $17,000 or $17 million, losing almost half of it to federal gift and estate taxes would certainly not be desirable. Moreover, it would discourage people from saving, and passing down, wealth to future generations. The good news is that the tax doesn’t apply to all estates once the lifetime exemption is incorporated into the calculations. Every taxpayer may deduct the lifetime exemption amount from his/her estate before the federal gift and estate taxes are calculated. In other words, your estate will only owe federal gift and estate taxes if the combined value of lifetime gifts and assets owned at the time of death exceeds the lifetime exemption amount.

Like the tax rate, the lifetime exemption amount fluctuated until ATRA set exemption amount at $5 million, to be adjusted for inflation each year. For 2018, the lifetime exemption amount would be $5.49 million for an individual and $10,980,000 for a married couple; however, President Trump signed tax legislation into law that changed the lifetime exemption amount for 2018, and for several years to come. Under the new law, the exemption amounts are now $11,200,000 for individuals and $22,400,000 for married couples. These exemption amounts are scheduled to increase with inflation each year until 2025. On January 1, 2026, the exemption amounts are scheduled to revert to the 2017 levels, adjusted for inflation.

Using the example above for a single person, the $17 million estate would only owe taxes on $5.8 million after the lifetime exemption is deducted. The tax due to Uncle Sam would be reduced from $6.8 million to $2.32 million thanks to the lifetime exemption.  For a married couple with a properly drafted estate plan, there would be no estate taxes.  

Although almost all gifts made during your lifetime count toward your lifetime exemption limit, there is one notable exception that you should make use of if you have an estate that is likely to be subject to federal gift and estate taxes. The yearly exclusion allows each taxpayer to make annual gifts valued at up to $15,000 (for 2018) to an unlimited number of beneficiaries without those gifts counting toward the lifetime exemption. Married couples can combine their exclusion and make gifts valued at up to $30,000. Over the course of several years, you can transfer a significant percentage of your wealth out of your estate without being taxed for those transfers using the yearly exclusion.

Contact Phoenix Estate Planning Attorneys

For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about the lifetime exemption, or about federal gift and estate taxes in general, contact the experienced estate planning attorneys at Morris Hall PLLC by calling 888-222-1328 to schedule your appointment today.

Asset Protection – It Works

By | Asset Protection, Bankruptcy, Estate Planning, Estate taxes, Trust Administration | No Comments

If I told you an inheritance can be left to whomever you want, without the fear that it could be taken by a lawsuit, bankruptcy or even divorce, would you want that benefit included in your plan? In today’s litigious society, asset protection is a critical component in anyone’s estate plan.

Our clients make sure the inheritance they leave their loved ones is protected. With a properly drafted trust, you can rest in peace knowing that the money you left behind will be used by your loved one, and not unintended people who could possibly take it from them.

We recently won a case for the son of a client because our client had the right language in his trust. I first met our client several years ago to review and update his estate plan. He did not think, at that time, that any of his children were going to be in any financial trouble. After our conversation, he made clear that the assets (his home and some savings) were to go to his children, and not to any future creditor (either a plaintiff in a lawsuit or bankruptcy trustee) because we discussed that risk and the need for assets protection. These were not current issues, but proper planning is using foresight to plan for life’s uncertainty.

Unfortunately, we had to utilize his plan a little sooner than we had hoped. Our client passed last year. After we were hired to assist with the administration of the trust we learned that one of our deceased client's sons was going through a bankruptcy. The trust we drafted was going to be put to the test.

We were asked by the son's bankruptcy counsel in another state to appear in the bankruptcy proceeding and defend the language in the trust document we had drafted for the bankruptcy debtor's father. We prepared our oral arguments and drafted a brief explaining to the judge how the trust works, and that the bankruptcy trustee was not entitled to any of the inheritance. The judge ultimately agreed. Every single penny of the inheritance was protected from the bankruptcy because of language we included in our trust document. And once the bankruptcy is settled, our client’s son will be able to use the inheritance to rebuild his financial life; because it is available to him, just as his dad intended.

And asset protection is not only for the rich. We frequently hear clients refer to their estates as "modest," but as the case we just went through tells us, even a modest inheritance of $50,000 can be worth protecting. Especially when you consider your heirs potentially losing the inheritance you leave them to an unintended third-party, it might seems more valuable, and perhaps worth more effort to protect. But to have this kind of asset protection in place, you have to plan ahead of time.

Come and talk with one of our estate planning attorneys and see how we can make asset protection a cornerstone to your plan.

james-plitz

 

 

 

Contributed by Morris Hall Attorney and Partner James P. Plitz

 

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 New Mexico offices are located in Albuquerque, Las Cruces and Santa Fe. Our Arizona offices are located in Phoenix, Mesa, Scottsdale, Carefree, Tucson, Oro Valley, Green Valley, Prescott, Sedona, Flagstaff and Arrowhead. 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.

Happy 100th Birthday to the Federal Estate Tax

By | Estate taxes | No Comments

Yes, the Federal Estate Tax has turned 100. In 1916, the members of congress voted in the Revenue Act of 1916.  This introduced the modern-day income tax and also included what is known today as the Federal Estate Tax.  For 2016, that tax carries an exemption of $5,450,000 per individual.  Over the years, there have been many changes to the U.S. estate tax and in fact, many candidates for Congress and the President of the United Sates have actually asked for a complete repeal of the estate tax.

Andrew Mellon, who was at one time Treasury Secretary, believed that the estate tax would hurt our economy and was a strong advocate for complete repeal of the estate tax. With the higher exemption, fewer Americans now find themselves subject to the estate tax upon their demise.  However those who are fortunate to have an estate in excess of the exemption are still asking that the tax be repealed or at least lowered as they feel it is not a justified revenue source.  Congress has not been keen on the complete repeal of the tax but it appears that this years presidential candidates favor lowering the exemption.  Decisions of this magnitude will mostly not be known until the elections are over and our new president is in office.

 

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.

 

Community Property. Is Arizona a Good State To Die In?

By | Estate taxes | No Comments

If you must choose between having your estate plan prepared in a community property state or a separate property state, you should choose community property every time. Arizona is one of only nine community property states. The other community property states are: 1) California, 2) Nevada, 3) New Mexico, 4) Idaho, 5) Washington, 6) Wisconsin, 7) Texas, and 8) Louisiana. The main reason to do your estate planning in a community property state is to minimize taxes.

There are all sorts of taxes that you need to be aware of when establishing an estate plan, they include income tax, inheritance tax, gift tax, estate tax, generation skipping transfer tax, state estate tax, excise tax, and capital gains tax. Doing your estate planning in a community property state can significantly decrease and often times even eliminate the amount of capital gains taxes when death occurs.

 

In a community property state, capital gains tax on community assets can be eliminated by receiving a full step up in tax basis when a loved one dies. I think an example would best illustrate what I mean by a step up in tax basis. Let’s assume that you and your spouse purchased some property in Arizona back in 1970 as an investment for $10,000.  That initial $10,000 payment is what the IRS calls your cost basis in the investment. Let’s say that same community asset is worth $110,000 today. Your original cost basis in the property is $10,000, but now that it has appreciated to $110,000, you have a $100,000 gain in the property. If you sell the property this year for $110,000, then you owe a capital gains tax on the $100,000 gain. In the alternative, had you not sold the property this year, but instead held on to it and died this year leaving it to your spouse, and then your spouse sold it for the $110,000, he/she would not have to pay any capital gains tax. In this scenario, the IRS would have allowed the surviving spouse to step up the cost basis in the property from the original $10,000 cost basis in 1970 to the date of death fair market value of $110,000, effectively wiping out any gain in the property.

How would this same scenario play out in any other state that is not a community property state? When the first spouse dies the surviving spouse only gets a half step up in tax basis on the property. Remember the original cost basis was $10,000 in 1970 and now today it is worth $110,000, which means a $100,000 gain. In a separate property state the survivor would only get a step up in basis on half the value ($50,000) and therefore would have to pay capital gains tax on the other half ($50,000). This is not great planning.

 

In addition to receiving a full step up in basis, Arizona currently does not have a state estate tax or inheritance tax. Although these tax advantages may change in the future, their present benefits make Arizona a great state to die in.

The attorneys at Morris Hall, PLLC have been practicing estate planning for over 40 years. We would love to help you create your estate plan in the wonderful Wild West state of Arizona.

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

 

Estate Planning and Taxes – One Size Fits All?

By | Estate Planning, Estate taxes | No Comments

Taxes are a big reason to plan.  But it is not the only reason.  The key thing is to have an estate plan that deals with the issues and goals that are personal to you.

Some people have taxable estates, and most will not. Some people have children, and some won’t.  Some people are not married, in relationships or on their fifth marriage, while others are in their one and only marriage.  An estate plan needs to be customized to fit each person’s particular situation.

Additionally, other factors such as federal and state taxes and asset protection must be considered when developing an estate plan.

Taxes impact all of us.  There are two main taxes that need to be considered are income tax and estate tax.  Income tax, including capital gains tax, hits the growth in your assets.  We pay this all the time.  With proper estate planning, these taxes can be mitigated, deferred or even wiped out altogether.  The estate tax issue has changed over the years, and currently, for most of us is a non-issue. In 1995, the federal estate tax exemption was only $600,000 per person. In 2016, the federal estate tax exemption is $5,450,000 per person. What this means is that if an individual’s estate at death is less than the exemption amount, there will be no tax imposed. With proper planning, the exemption is doubled for a married couple. So, in 2016, a married couple’s exemption is $10,900,000.

We hope our children are never sued, have to go through bankruptcy or get a divorce.  But that is not the society we live.  So a proper estate plan should incorporate asset protection.  Terms can be incorporated into your plan that protect what you leave to your loved so that they can use and enjoy it, not some greedy plaintiff.  Unfortunately we live in a litigious society and planning is necessary to ensure your hard earned estate is distributed to who you want, when you want, with the least possible expense and the greatest amount of privacy.

It is important to get the advice to have a customized plan put in place just for you.  If you already have an estate plan, come see one of our estate planning attorneys to have it reviewed – we tell our clients to review every three years. If you don’t have an estate plan, make an appointment today – now is the time to begin planning since we don’t know what tomorrow holds.

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

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.

 

 

A Life with Alzheimer’s

By | Estate Planning, Estate taxes, Other | 3 Comments

Alzheimer’s disease and other forms of dementia have a devastating impact on people’s lives.  According to the World Alzheimer Report 2015, there are over 46 million people suffering from dementia.  That is a staggering figure.  Even worse is the future view – it is estimated that there will be over 131 million people suffering from dementia by the year 2050.

Thankfully, I have not had to experience, first hand, the emotional impacts of living with or suffering through dementia.  It takes the strength of Hercules to be the support and the stability for a loved one suffering from the disease.  I recently read an article by CNN discussing one man’s struggle as he was diagnosed with early onset Alzheimer’s.  The article imparts interesting insight into the mindset of those whose memories are fading.  Alarmingly, most people do not consult with their doctors as warning signs emerge.

As an estate planning attorney, I see the struggles of families trying to do what is best for their loved ones.  Many times, it is the person suffering who is the biggest hurdle.  He or she is gripping onto the control they once knew, and the fear of losing it makes them grip tighter; they almost become their own worst enemy.

As I put together estate plans that help give legal authority for a trusted friend or family member to step in to assist in these times, I try to emphasize and remind my clients to “store these thoughts” as to the “why” and the “when” their son or daughter will step in to help them.  I stress that the plan is in place to help make that difficult time easier by allowing the person they chose to continue to pay bills and find the care and support they need to continue to live their life.

It is a difficult time.  I hope that I am fortunate enough to not have to experience it firsthand.  I am thankful that each of my family members have a plan in place so we will be able to legally support each other if Alzheimer’s befalls any one of us.

Make sure your plan is in place.  Getting the right advice and having the right pieces in your plan is critical to making that difficult time just a little easier.  Call us today, and one of our estate planning attorneys will review and discuss what you need in your plan.

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

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.

 

 

Who Needs an Estate Plan?

By | Estate Planning, Estate taxes, Other | No Comments

The simple answer is everyone.

Once you understand the need for estate planning, it’s important to find the right attorney.

Would you go to a patent attorney to file for divorce? Of course not, because the patent attorney does not practice divorce law and is not keeping up with family law changes.

When planning your estate, finding an attorney who practices estate planning law will give you peace of mind that your estate is planned thoroughly and up to date with ever changing estate laws.

In addition to estate taxes, a well-drafted estate plan also considers income taxes. For example, if you gift appreciated assets (stock, real estate) during your life, the beneficiary will not receive a stepped up basis. The end result for the beneficiary could result in capital gains taxation upon the sale of these appreciable assets.

Planning with an estate planning lawyer can ensure that the myriad of potential tax (income, estate, inheritance and capital gains) issues and your estate is planned thoroughly and without mistakes.

Estate planning is important for anyone over 18 years of age, single or married, and with a minimal estate size. Having a proper estate plan will provide for your family in case of your disability, allow for control of distribution of your assets at your death, protect your assets from possible creditors, keep taxation to a minimum, and control who will be in charge of your health care wishes.

You’ve worked hard for your estate and tax and legal factors regarding your plan should be dissected by a qualified estate planning attorney to ensure your estate is passed to who you want, when you want, and with the least possible cost, and the most possible protection.

 

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

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.

 

Some of the Most Interesting Gifts

By | Celebrity Estates, Estate Planning, Estate taxes, Other | No Comments

Robin Williams is blocking an Aladdin sequel even after he died.  His will has provisions that Disney cannot use his voice from outtakes from the original movie until 25 years after he passed (so the year 2039!).  When drafting an estate plan (a trust or a will), there are countless ways to distribute your possessions (or postpone them).  Recently, I had the opportunity to read some of the worst, or should I say “interesting” distributions that was specified in a will or trust.  The question becomes not whether you “can” put something in your plan, but whether you “should.” Most people we meet with want to minimize problems after they pass, but without the right guidance in drafting their plan, these strange distributions or requirements create the biggest problems.

Let me describe some of these interesting bequests:

  1. Upon a certain gentleman's death, he requested that the doctor drive a wooden stake through his chest. It wasn't because of vampire fears, but simply to ensure he was dead.  He further insisted that the casket not be nailed down, just in case he needed a means to “escape.”
  1. One famous singer decided that, at the time of her death, her cat would live in a lap of luxury. The cat was 13 years old, at that time of her passing.  It was fed only baby food imported from the US, and lived in a seven foot tree house.
  1. TM Zink was a man that admittedly hated women. At the time of his death, he had a small estate of roughly $100,000.  He asked for the amount to be placed in a trust for 75 years.  At the end of that time, it was to be used to open a womanless library.  The library was to feature no written works, art, decor with any relation to a woman or speak of one.  The family contested the request and the court did overturn it.
  1. Jack Benny was a lovable guy. His sweetness survived him.  In his will, he arranged that his widow receive a long stem rose to be delivered every day for the rest of her life.  She lived another nine years.
  1. One of our famous magicians notated 10 words that he claimed he would communicate with his wife from the grave. For 10 years, his wife held séance’s and finally gave up after never making contact with him.
  1. Gene Rodenberry, creator of Star Trek, asked that his ashes be launched where no man has gone before. Some of his ashes have made a trip around earth. In 2016 there is a plan for the remainder of his ashes to be launched into space, along with his wife’s.  (interesting side note, one of his daughters was disinherited because she started to contest his will, and the Court of Appeals felt that was enough to trigger the “no contest clause”)
  1. Sandra (Ilene) West a wealthy socialite had insisted that she be buried in her night gown, sitting in her Ferrari.  Her brother-in-law was to receive $2 million if the request was carried out, but only $10,000 if it was not.  After unsuccessfully fighting the request in court, he buried her as she requested. However, he encased everything in cement to deter thieves

 

  1. Mark Gruenwald, a writer and editor for Marvel Comics insisted that his ashes be mixed with the ink to be used in the printing of upcoming comics. He received his wish!
  1. Napoleon Bonaparte requested that his hair be set aside and used for bracelets. These bracelets were then sent to his relatives.
  1. Leona Helmsley left $12 million to her dog, Trouble, along with a list of very detailed instructions. In the end, the court reduced the amount to only $2 million, but the Maltese was still very well cared for in a Miami Beach resort.

Just because you can put it into your plan, does not mean you should.  Provisions that you are able to put into your trust can vary widely.  Some can be very difficult to administer as well as very costly.  Through our office, you can get the advice and counsel as to what the effect would be if you choose to distribute in an uncommon way.  What we want you to do is make a choice that would result in a good estate plan, both for you while you are alive, and when you are gone.

dan-morris  Contributed by Morris Hall PLLC Phoenix Estate Planning Attorney and Senior Partner, Dan R. Morris.

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.

 

Death & Taxes: Plan for Both

By | Attorney Andrea Claus, Beneficiaries, Death Probate, Estate Planning, Estate taxes, Taxes | No Comments

Most folks don’t look forward to planning for two of life’s guarantees: death and taxes.  However mundane or morbid you view this task, there is planning to be done no matter what your station in life. When properly planned the harshness of both death and taxes can be mitigated.

Through my experience as an estate planning attorney, I have outlined five basic areas that you need to consider when implementing your plan:

  1. Select an estate administrator: The administrator is the person who is in charge when you pass. This should be a responsible person with the time and acumen to carry out your wishes.
  2. Select your beneficiaries: These are the people and/or charities that will get your stuff upon your death. If you do not designate beneficiaries via a trust, will, TOD designation, or other method, the state will dictate who gets the stuff from your estate.  Whatever planning tool you use should be accessible by your estate administrator.  Used properly, that the right tool can minimize taxes and provide asset protection to your beneficiaries; it is a good idea to discuss your strategy with an estate planning attorney.
  3. Asset inventory: This is a list of all the stuff you own (like bank accounts, life insurance policies, real estate . . .). When you die, your estate administrator will need to know what you have and who to contact to collect and distribute.  Creating a list of physical and non-physical items that you own will ensure that no asset is left uncollected.  This inventory should be accessible by your estate administrator upon your death.
  4. Asset review: After the inventory is complete, the beneficiary designations and/or titling of all accounts or policies should be reviewed to ensure that they are in line with your wishes. This is also a good time to consolidate assets for ease of management, if you’re able.  Bringing the account statements, deeds and policies to your estate planning attorney will help you align your wishes with how the titling and beneficiaries read.
  5. Create a debt list: Much like the assets inventory, you should make a list of your debts. If the administrator knows what debts will need to be settled upon your death, distribution of your estate can be accomplished more quickly and efficiently.

These five basic considerations can make life easier for your loved ones and for your administrator.  Your asset inventory and debt list are also a good tool to help you get a grip on your current expenses.  Discussing your goals with an estate planning attorney and reviewing your plan is the best way to ensure you’ve addressed all issues unique to your estate.

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

 

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

We Must Be Shopping at Different Places

By | Estate Planning, Estate taxes, Other | No Comments

The Social Security Administration (“SSA”) recently has reported that there will be no cost of living adjustment in 2016 for Social Security recipients.  Their reasoning being that the cost of living has increased, so one’s 2016 dollar will be the same as it was for 2015.

As a Social Security recipient, I disagree.  Even though the price at the pump has decreased, my household has received significant increases in the cost for groceries, medical care and housing costs including real estate taxes.  I personally see, and fell, these increases in my personal budget.  It makes it difficult to accept SSA’s assertion of no inflation in 2015.

SSA also announced that associated figures will also stay the same in 2016.  That is, there will be no increase in the maximum amount of earnings recipients are allowed without impact to their Social Security income, and the amount of income current employees and employers pay Social Security taxes on also will not change.  The maximum taxable income for Social Security remains at 118,500 per wage earner.  The maximum a Social Security recipient under full retirement age can earn without incurring a penalty stays at $15,720 annually.  The Social Security tax for 2016 will remain at 7.6%.

Though this is not a “good news” report, it is important for those of us receiving Social Security benefits to be aware of what we can expect to continue to receive in 2016.  Our belts will need to be strapped a little tighter, but with some planning, we will continue to enjoy our retirement!

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.