Cavanagh Email is down for a bit

I am sorry for any inconvenience but Cavanagh Law Firm is switching servers and it is taking longer than we thought. So we are hoping to be back up some time this after noon June 17, 2013. Please call at 623-815-7451, or contact me through facebook.

How much trouble can probate really be?

Your accounts, whether in a bank or investment institution, and your real property all have legal title requirements. Financial institutions and title companies will not release assets unless the legal requirements are satisfied. If you die with assets in your name, and if those assets total more than $50,000, then a probate court filing will be necessary. The pleadings are lengthy and must be mailed to all of your legal heirs-- whether you want them to receive any money or not. You can avoid the extra cost and time of a probate, by utilizing transfer on death designations or a trust. If minor children involved, the court costs can be several thousand dollars every year. Thus, be sure to have your assets properly titled so courts, banks and title companies do not make things difficult when you or your spouse or loved one dies.

Ever been ill? Who has legal rights to mske sure your doctors or health care providers take good care of you? Hsve a healthcare power of attorney and thete will be certainty that the right petson has the tights to help you.

Who should be you Personal Representstive? I suggest you change the question to "who would you trust to handle your finances if you were sick?" That is the same petson you can trust to handle your finances at feath.

Just a Simple Will?

I can appreciate the desire to have simple documents and a "simple will." Yet, we live in a complicated world, where we have bank accounts, investment accounts, IRAs, doctors, hospitals and then-- if we do not have the right estate planning documentation, we have courts. Therefore, a simple Will does not always meet our objectives. We still need powers of attorney for finances and for health, and to utilize a trust or pay on death designations. Perhaps, most importantly, there is the need for advice-- how to use estate planning documents and avoid court if you get sick or incapacitated. I give my clients advice, not just paper. The articles on my website gives some ideas of the issues I cover.

Who should be the beneficiary of an IRA

Normally, when a client has a trust, I like to have the first beneficiary be the trust and the contingent beneficiaries be the humans. Then, if one of the humans beneficiaries predecease the participant, then the trust will distribute that deceased child’s share per terms of trust and if that includes a minor beneficiary, we can avoid court involvement with a conservatorship because the minor’s share will be held in trust. Conservatorship have gotten very expensive to keep going with all the new court rules. Also, you cannot imagine how many conservatorships I have had to seek because of an IRA for a minor grandchild which exceeds $10,000 (even if it is just a few hundred dollars over). If all of the children or beneficiaries under the trust are over the age of 18, then the Trustee can disclaim the IRA within 9 months and the human contingent beneficiaries can take the IRA. Also, by having the trust be the beneficiary, we allow for a continuity of distribution. If the participant has a charitable interest , then the trustee can use the IRA to distribute to the charity which does not have to pay income tax on distributions, and the children can receive assets which are not subject to income tax (like other investments).

American Taxpayer Relief Act- Where Things Stand

Whether living in the metro Phoenix area or the Sun City Peoria area, most of my clients are interested in the following highlights: All the individual "Bush era" tax rates are retained with the addition of a new top rate of 39.6% imposed on income over $450,000 for married taxpayers filing jointly or $400,000 for single taxpayers. The capital gains and dividend rate has increased to 20% for those taxpayers in the top bracket and remains at 15% for the middle brackets and zero for taxpayers in the 10% and 15% brackets. The estate and gift tax exclusion amount remains unified at $5 million indexed for inflation (in 2012 it was $5.12 Million) but the top rate increases from 35% to 40% effective January 1, 2013. Also, the "portability" election, allowing the surviving spouse to utilize the deceased spouse's unused exemption, has been made permanent. The threshold amount for the extra income taxes passed as part of the Healthcare Reform Legislation did not change. The employee portion of the Medicare tax, normally 1.45% of covered wages, increased by 0.9% on wages exceeding $250,000 for married taxpayers filing jointly. There is an additional Medicare tax on investment income on individuals with modified adjusted gross income greater than $250,000 for married taxpayers filing jointly. The 3.8% tax is on the lesser of the taxpayer's net investment income or the excess of the taxpayer's modified adjusted gross income in excess of $250,000 for married taxpayers filing jointly. Net investment income includes interest, dividends, annuities, royalties, rents, capital gain and passive activity trade or business income.