Having the right Successor Trustee

We can make things easier for our family when we are ill or upon our death, when we effectively use a Revocable Living Trusts are very useful for assuring access to assets due to illness or death. One way is to be sure that you have the right persons named as your Successor Trustee to take care of your assets when you cannot. If you have named a financial institution to be a Successor Trustee, make sure that your assets meet the financial minimum. If a bank will not serve as Successor Trustee because your assets are under the minimum, you want to be sure you have listed a trusted person or another financial institution. The Successor Trustee does not have to be a financial wizard, but just someone who is responsible and will hire the right professionals to assist you.

Get more than just paper when your estate plan is done.

Estate planning needs to be more than just a stack of paper. Legal services should be that-- service, including information, advice and a somewhere to call when you have questions how to use your documents. So I provide legal services, and most follow calls are answered without charge, unless new research or documents are needed.

LLC interests can be held as joint tenants with right of survivorship

If you have an LLC but do not have a trust a new law, A.R.S. 29-732.01, allows LLC interests to be held as joint tenants with right of survivorship or community property with right of survivorship. The Operating Agreement must provide for the right of survivorship. This new law avoids probate if you own interest in an LLC but do not have a trust. However, I still recommend a trust when you own an LLC because the trust will avoid court involvement if you become incapacitated and avoid probate upon the death of both you and your spouse or joint tenant.

Beware of Scam related to Deeds used for a trust

From time to time, there are scams where companies send official looking bills to people who recently recorded deeds to their trust or otherwise. If you receive a bill regarding a deed processing notice, property transfer service or other official looking agency, other than the county assessor's office, these likely are not real. Feel free to contact me with any questions before you send any money.

Increase in the maximum value of assets to avoid probate

The Arizona legislature has passed a law effective on September 12, 2013, which increases the amount of assets which would require a probate. You can avoid probate only if the assets you hold in your name do not exceed $100,000 of real property or $75,000 in personal property (cash, accounts and tangible personal property). This is increased by $25,000. If more than $5000 of wages are to be paid then probate is needed. This amount was not increased Therefore, be sure to utilize your pay on death designations, transfer on death designations or title your assets in your trust.

“State of celebration” for same sex couples.

The IRS has ruled that same-sex couples legally married in a jurisdiction that recognizes same-sex marriages, will be treated as married for federal tax purposes. The ruling applies even if a same-sex couple moves to a jurisdiction that does not recognize same-sex marriages. Therefore, the IRS in a revenue ruling, 2013-17, have adopted a “state of celebration” approach for the treatment of same-sex marriages. For example, if a same-sex couple marries in California, a state that recognizes same-sex marriages, and moves to Arizona, a state that does not recognize same-sex marriages, the same-sex couple will be treated as married for federal tax purposes because they were married in a jurisdiction that recognizes same-sex marriages. Revenue Rule 2013-17 applies to all federal tax laws in which marriage is a factor, including filing status, personal and dependency exemptions, standard deductions, and employee benefits. Take care though, Revenue Rulings do not have the same force of precedence as court cases – the IRS can change its position at any time.

If you have an LLC you need a trust.

If you are a Member in an LLC, or own stock in a corporation, you need to be sure your ownership interest is titled in the name of your trust. There is no "pay on death" designation effective for Member's interest or ownership in your business so, even if the owner is your spouse, you will still need to have a probate on your death, unless ownership is titled in your trust. For married couples, if only one of you is really working the business, then your Operating Agreement or Bylaws can be amended to designate that one as the "designated Co-Trustee" to do the daily business.