GILBERT ESTATE PLANNING

If you pass away without a Revocable Living Trust or Will, your estate may end up in probate court where a judge will choose your personal representative and state statutes will determine the distribution of your assets. Of course, neither the judge nor the state have an interest in minimizing estate administration costs or protecting your family’s privacy. Probate court is time consuming and expensive. Also, it is open to the public, which means creditors, predators and others will have access to all information about your estate. The benefits of having an estate plan far outweigh its initial costs.

People are living longer, which means more people are getting Dementia and Alzheimer’s. Unexpected incapacity impacts your personal and financial affairs. Decisions such as who will handle your finances and make other decisions on your behalf are extremely important. A Revocable Living Trust can include incapacity provisions where you choose a person you trust to manage your financial affairs. Without these provisions, there is a high probability that a conservator will be appointed through a probate court (often called “Living Probate”). This process can be costly, time-consuming and, may not be attuned to your wishes.

It can be a delicate balance to hold: preserving assets for children from a first marriage and—at the same time—ensuring your new spouse will have the assets needed to maintain his or her lifestyle. Balancing the two often requires coming to terms with realistic expectations for all. Ignoring these issues often leads to Will contests and Trust litigation. Blended family planning can bring peace of mind to the entire family.

After you pass away, it is possible your spouse may remarry. In the event of remarriage, I can help you protect your assets and your children’s inheritance from your surviving spouse’s next spouse.

Giving an inheritance outright to your child might sound good at first, but it ignores potential problems. For example, what if your child is too immature to handle the responsibility of a large sum of money? What if your child has financial problems that put the inheritance at risk to creditors? What if your child marries a “gold digger”, is addicted to drugs or alcohol, gets divorced or remarried? You may need to protect your children’s inheritance. A structured trust can leave a lasting legacy for your children and grandchildren.

The current federal Estate Tax (“Death Tax”) is approximately $11.2 million per individual and $22.4 million per married couple. Arizona does not have a state Estate Tax. The Estate Tax in Oregon is $1 million and Washington is $2 million.

While the Estate Tax may not apply to most people in Arizona, you never know when the tax laws will change. They often do with each new president. I can build “just-in-case” estate tax provisions into your trust.

I almost always include estate tax planning for clients in Oregon and Washington.

There is no asset protection with “Revocable” trusts because you maintain control of your assets and you can revoke or amend the Trust at any time. However, asset protection is possible for any inheritance you leave to a beneficiary. This is accomplished by using irrevocable trusts such as a QTIP Trust, Special Needs Trust, or other structured trust. I assist my clients with asset protection from creditors, lawsuits, bankruptcy trustees or divorce.

You are in complete control of your Revocable Living Trust. You may revise it during your lifetime to accommodate a change of circumstances. I recommend reviewing your estate plan every two to three years or upon any major change in circumstances such as marriage, divorce, purchase of real property, or any change in your relationship with a personal representative or successor trustee.

A funded Trust means the Trust holds the title to the assets at death. A Trust may be partially or completely funded. Assets may be funded in several ways, including deed transfers, legal assignments and re-titling the name of an account. For instance, a residence can be transferred to a Trust by executing and recording a transfer deed with the county recorder. An interest in an LLC may be assigned to the Trust. Bank accounts can be titled in the name of the Trust. The failure to execute Trust transfer deeds, legal assignments, or change in account names, results in a partially or wholly unfunded Trust. An unfunded Trust will likely end up in probate court, which defeats one of the purposes of the Trust. Funding is included in my Revocable Living Trust package.