Very few of you will have an estate tax problem under the current laws. The federal estate tax exclusion is $5,250,000, and for couples with proper planning, at least $10,500,000. And Arizona does not have an estate tax. Many pundits, accountants, financial planners and attorneys, and their clients, have concluded that there is therefore no longer a need for a living trust in estate planning. Many more have opined that for those who do have a trust, the typical A/B split for married couples upon the first death is no longer necessary.
Attorneys, accountants and advisors who are most familiar with the workings of trusts, during the lives of the creators, and upon their deaths, would take a much different view. They would think that hasty statements that trusts are no longer necessary are irresponsible.
Regardless of the possibility or absence of estate taxes, trusts for married couples and single individuals, if properly drafted and maintained, can assist with the following matters:
- Protection against conservatorship and guardianship if a person becomes incapacitated.
- Protection against the time, exposure and expense of death probate upon death.
- Protection against capital gains taxes upon the death of a married person.
- Protection against the requirement to spend down all but $2,000 of a person’s assets if he or she has to go into a nursing home.
- Protection against a new spouse acquiring some or all of an estate if a surviving spouse remarries.
- Protection for a surviving spouse and for children or other beneficiaries against creditor claims, claims from current or divorced spouses, the required spend-down to qualify for long-term care, spendthrift tendencies, substance abuse problems, and immaturity in handling assets transferred to them.
Not all trusts have all of these protections. In fact, very few do. If you make the investment in a trust (and for most people, it is a good decision), it is important to have it created by a firm who understands how to provide for these protection and to put them in place as appropriate.
Contributed by MH Phoenix, Cave Creek and Flagstaff Estate Planning Attorney, B. West Hunsaker.
What the Attorneys of Morris Hall 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. The attorneys also help those in Arizona and New Mexico to apply for and receive Medicaid assistance and Veterans Benefits. Our Arizona offices are located in Phoenix, Mesa, Scottsdale, Cave Creek, Tucson, 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.