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Updates & Improvements to Estate Planning for 2015:

As we are about to ring in a new year it is out with the old and in with the new and so it is with estate planning. There have been significant changes in estate planning in the last few years that affect how we do estate planning for the future. The following are some of the recent developments that have necessitated revisions to existing estate plans:

United States Supreme Court ruling regarding IRA’s- June 2014

For the longest time it was understood that retirement accounts that were passed on to the next generation were protected assets from creditors. In a unanimous decision in June of this year the Supreme Court of the United States declared that when a retirement account is passed on to the next generation the account loses its asset protection. Considering retirement accounts can make up a large portion of one’s estate and the primary goal of most people who create estate plans is to ensure something is passed on to their loved ones to help them achieve their goals, it is now more important than ever to make sure your estate plan is up to date and consists of a Living Trust that can protect these valuable assets from future creditors.

Double Step-up in Tax Basis:

With most living trusts, when a spouse dies, the trust will split into two new trusts called an A/B trust. This is done for many reasons including- minimization of taxes, creditor protection and divorce protection for the surviving spouse. The downside to these trusts has always been that when the surviving spouse dies only half of the assets- those in the A trust- will receive a step up in tax basis, thus eliminating any capital gains taxes in the A trust. The B trust did not get a step up in tax basis upon the survivor’s death. This made it so that any capital gains that accrued in the B trust from the time of the first spouse’s death to the second spouse’s death were due when the assets were liquidated upon the second spouse’s death. We now have new and improved language in all of our trusts that allows the kids/loved ones to receive a full step up in tax basis in both the A and B trust when the surviving spouse dies. This eliminates any and all capital gains taxes when the second spouse dies and allows us to continue to enjoy all of the wonderful benefits of an A/B trust without the downside that used to go along with them.

Beneficiary Trusts:

Often the number one goal for most clients is to ensure that their hard earned assets are going to go to whom they want, when they want and how they want with the least amount of expense and delay and the greatest amount of privacy. With new improvements to living trusts we are able to ensure that those hard earned assets are going to be protected for those that you love.  We can leave the estate in a vehicle known as a beneficiary trust for the loved one, which will allow the estate to be protected long after you are gone.


The estate tax exemption amount for 2015 is going to increase to $5.43 million per person from $5.34 million. The annual gift tax exclusion amount is staying put where it is currently at -$14,000 per year per person.

Scottsdale and Glendale Estate Planning Lawyer David Eastman - VA Accredited AttorneyContributed by MH Scottsdale, Arrowhead and Phoenix Estate Planning Attorney and Partner, David T. Eastman.

About Morris Hall:
At Morris Hall, we have focused our legal practice on estate planning for over 40 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, 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.

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