Thomas J. Bouman
Attorney
Author
Speaker
Tucson, Arizona
ESTATE PLANNING, TRUST & PROBATE ADMINISTRATION, ASSET PROTECTION
Practical Information about Wills, Trusts, Powers of Attorney, LLCs, Probate, and Trust Administration in Arizona
Provided by Bouman Law Firm, Tucson, Arizona
ON SALE NOW: ARIZONA ESTATE ADMINISTRATION ANSWER BOOK
Practical Answers to Common Questions for Any Size Estate in Arizona
By: Thomas J. Bouman, Arizona Attorney
SEE BELOW FOR MORE INFORMATION AND HOW TO PURCHASE
The Arizona Estate Administration Answer Book is your best resource for understanding practical issues that commonly arise when responding to the death of an Arizona resident or property owner. Each chapter provides advice and explanations to help you wade through the complex, and often bizarre, legal requirements associated with estate and trust law in Arizona. Written in easy-to-read question and answer format, the Arizona Estate Administration Answer Book covers a comprehensive list of legal and non-legal matters including:
Written in easy-to-read question and answer format, the Arizona Estate Administration Answer Book covers a comprehensive list of legal and non-legal matters including:
•Who has authority to make the final arrangements?•Where are the military cemeteries in Arizona?•What if a bank refuses to permit access to the safe deposit box?•What if the will was signed in another state?•Who is entitled to information about the deceased person’s assets?•When is a probate action required?•What debts are the survivors responsible for?•What options are there for transferring money to a minor child?•What if the property owner was not an Arizona resident?•Will the State take the home if the deceased person was on ALTCS?$19.95ISBN 978-0-557-57184-0
ISBN 978-0-557-57184-0ALSO AVAILABLE AT iBOOKSTORE FOR iPAD. Go to iBookstore through iTunes app.
THIS MONTH'S FEATURED "WHAT YOU SHOULD KNOW" ARTICLES
"What You Should Know" topical Q&As. Brief and to the point.
By: Thomas J. Bouman, Arizona Attorney
SEE ARTICLES PAGE ON WEBSITE FOR ENTIRE LIST OF ARTICLES
ESTATE PLANNING (Click on title below to view article)
1. What is a Credit Shelter Trust?2. May the surviving spouse act as trustee?3. What if the surviving spouse needs the money?4. What if the surviving spouse gets remarried?5. What happens when the surviving spouse dies?6. How is the Credit Shelter Trust funded?7. Which funding method is better?ESTATE SETTLEMENT (Click on title below to view article)
1. May a Trustee keep all trust matters private from the beneficiaries?2. What are the requirements of a Trust Beneficiary Notice?3. What are the requirements of a Trustee's Report?4. What is the format of a Trustee's Report?ASSET PROTECTION (Click on title below to view article)
1. What are Asset Protection Exemptions?2. What are drawbacks of relying on Asset Protection Exemptions?3. What are some of the Asset Protection Exemptions?4. Is life insurance protected by law?5. Are retirement account assets protected by law?ESTATE TAX LAW UPDATE
Read my letter to clients about recent changes to the estate tax laws.
Effective January 1, 2011, the “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010,” signed by President Obama, brings back the federal estate tax after a one year hiatus. The new law includes an exemption of $5 million, plus unlimited deductions for transfers to a surviving spouse or charities. The tax rate is 35%.
Unfortunately, the 2010 Tax Relief Act fails to provide any long-term certainty for estate tax planning. The law expires December 31, 2012, presumably to be addressed again after the 2012 presidential election.
A major feature of the 2010 Tax Relief Act is the new concept of “exemption portability.” This feature allows married couples to share their estate tax exemptions, making it simpler to shelter up to $10 million from estate taxes. For example, if Husband dies in 2011 with a $2 million estate, then Wife may have an $8 million exemption ($5M for Wife + $3M unused by Husband).
At first glance, the portability feature provides an attractive alternative to the traditional use of a Credit Shelter trust (aka Bypass trust) during the lifetime of the surviving spouse. In fact, it may be the best choice in many situations. However, a closer look reveals many reasons to continue with traditional planning rather than rely on portability of the unused exemption.
1.In order for Wife to claim the additional unused exemption upon Husband’s death, she will have to file a federal estate tax return (when it would otherwise be unnecessary).
In order for Wife to claim the additional unused exemption upon Husband’s death, she will have to file a federal estate tax return (when it would otherwise be unnecessary). 2.A Credit Shelter trust provides asset protection for the surviving spouse (outright distribution does not).
A Credit Shelter trust provides asset protection for the surviving spouse (outright distribution does not).3.A Credit Shelter trust protects the deceased spouse’s children in the event of remarriage by the surviving spouse.
A Credit Shelter trust protects the deceased spouse’s children in the event of remarriage by the surviving spouse. 4.Any appreciation of assets in a Credit Shelter trust is exempt from estate tax, but the “portable” exemption amount is not inflation-adjusted.
Any appreciation of assets in a Credit Shelter trust is exempt from estate tax, but the “portable” exemption amount is not inflation-adjusted. 5.Many states (not Arizona) have a separate estate tax, but do not provide the same portability offered by the federal tax system.
Many states (not Arizona) have a separate estate tax, but do not provide the same portability offered by the federal tax system.6.The portability feature is only applicable if both spouses die before December 31, 2012 (unless Congress extends the law).
The portability feature is only applicable if both spouses die before December 31, 2012 (unless Congress extends the law). Whether you are married or single, if your current net worth – plus the value of life insurance death benefits – is more than $1 million, I suggest we review your will or living trust this year in light of the new tax law. If you are married, it is important to review any formulas used in your will or living trust that would be used to allocate funds to a Credit Shelter trust upon the death of the first spouse. The new $5 million exemption amount and portability rules may give us opportunity to simplify the tax planning components of your estate plan.
I also want to counsel you not to overemphasize estate tax planning. This is only one component of a comprehensive estate plan, which includes a wide array of non-tax objectives. However, the changing tax landscape should serve as a reminder that you should revisit your estate plan regularly.
If you would like to discuss this further, or if you would like to schedule time to come and review your estate plan with me, please contact my office at (520) 546-3558.
Disclaimers
I present the information on this web site as a service to legal consumers, my clients and other Internet users. While this site does provide information on law-related topics, it does not provide legal advice. Moreover, due to the rapidly changing nature of the law and my reliance on information provided by outside sources, I make no warranty or guarantee concerning the accuracy or reliability of the content at this site or at other sites to which we link.
Web site visitors who wish to send initial information to an attorney by e-mail must understand that this information is not yet protected by attorney-client privilege. Likewise, initial responses to your inquiries are for courtesy only. Pursuant to attorney ethics rules, the initial exchange of information does not constitute an attorney-client, or even attorney-prospective client, relationship. This relationship can only be entered formally; i.e., with terms in writing.
Legal services and published materials are provided by Thomas J. Bouman, PLLC, an Arizona professional limited liability attorney (doing business as Bouman Law Firm). Thomas J. Bouman is the managing attorney. Bouman Law Firm provides legal services to residents of the State of Arizona, and nonresidents with property interests in Arizona. The physical office of Bouman Law Firm is located at 7650 E. Broadway Blvd. #108, Tucson, AZ 85710. Its eastside Tucson location is especially well-suited for persons residing in the following zip codes: 85710, 85715, 85749, 85750, 85748, 85730, 85747, 85711, 85718, 85712, 85641 and the following areas: Tucson, Vail, Rita Ranch, Benson.
Copyright 2000-2012 by Thomas J. Bouman. All rights reserved.
