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The Total Return Unitrust: Many Happy Returns

There are many types of trusts used to maximize a variety of benefits or accomplish goals relating to any number of parties to a trust.  The Total Return Unitrust (TRU) is intended to balance the interests of a current trust beneficiary and remainder beneficiaries, while allowing the trustee to maximize the amount of trust income paid out to the current beneficiary.

Many state TRU statutes allow conversion of an existing trust into a TRU.  Arizona statutes provide such an option under certain circumstances. In addition, a TRU must be consistent with applicable federal tax laws and regulations. Federal law requires certain types of trusts to pay out all income to a specific beneficiary.  As noted, TRUs are typically used to maximize payments to an income beneficiary while preserving reasonable growth for remainder beneficiaries. However, in some circumstances, it may be desirable to use a TRU to minimize income payments.  To this end, under certain conditions, the IRS will allow a trustee to convert a trust into a TRU without adverse gift, estate, income, or generation-skipping transfer tax consequences. This strategy can minimize a current beneficiary’s income where there are estate tax concerns, all while preserving more of the trust assets for remainder beneficiaries.

At Morris Hall, we are happy to review the provisions of your current trust to determine if it accomplishes your estate planning goals.

 Phoenix, AZ Estate Planning Attorney Andrea ClausContributed by MH Phoenix Estate Planning Attorney Andrea Claus.

Morris Hall 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, Gilbert, Fountain Hills, Scottsdale, Cave Creek, Prescott, Flagstaff, Sedona, Tucson, Sonoita, Arrowhead, Avondale, Goodyear and Tempe.  In New Mexico we serve the areas of Albuquerque, Santa Fe, Las Cruces, Rio Rancho, White Rock, Alamogordo, Truth or Consequences and more.  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.

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