I am often asked “How do I know if my trust is up to date?” A lawyer’s typical answer is, “It depends”. Everyone has different circumstances and needs that must be addressed in his or her estate plan. There are about 15 key issues that I look at when reviewing a trust to see if it is effective in light of the current law and clients’ circumstances. These vital points are critical elements in determining if the trust will accomplish what is necessary and intended to protect clients while alive and to provide protection to a surviving spouse, family members and other beneficiaries upon the client’s death.
Here are some of the provisions I want to be sure are covered:
1 - Is your trust a Qualified Trust pursuant to IRS Code Section 401(a)(9), and thus able to protect your IRA and 401k from extra income taxes?
2 – Is your trust in compliance with the Arizona Trust Code?
3 – Does your trust provide for a Special Co-Trustee?
4 – Does your trust include the new Certification of Trust?
5 – Does your trust have Decanting provisions allowing for necessary modifications after death or incapacity?
6 – Does your trust provide for a double step-up in tax basis for capital gains tax savings for your beneficiaries?
7 – Are your Health Care documents in compliance with those recommended by the Arizona legislature including the Mental Health Care Power of Attorney and new Health Care Power of Attorney?
If the answer to any of these questions is no, then you need to come in and have your trust reviewed.
Contributed by MH Cave Creek, Phoenix and Flagstaff Estate Planning Attorney B. West Hunsaker.
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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.