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  • Home
  • About Tom
  • Estate Planning
    • How to Plan Your Estate (Start Here)
    • Revocable Living Trust
    • Inheritance Protection Trust
    • Financial POA
    • Health Care POA
    • Living Will
    • Asset Protection Planning in Arizona
    • Intro to Arizona Domestic Asset Protection Trusts
    • Asset Protection Exemptions in Arizona
    • Protect Home from Creditors in Arizona
    • Car/RV/Mobile Home Titling
  • Fees
    • Estate Planning Fees
    • Estate Administration Fees
  • Scheduling
  • Recent Law Updates
  • Office Info
  • New Client Forms
  • More Articles
  • Bouman Law Firm Blog
  • Probate & Trust Administration
    • How to Administer an Estate (START HERE)
    • Probate in Arizona
    • Small Estate Affidavit
    • Final Arrangements & Organ Donation
    • Trust Beneficiary Notices and Trustee Reports
    • Annuities
    • Debts of Decedent
    • Transfer Real Estate of Nonresident
    • Tax Filings for Estate
    • Duties of Trustee
  • Make a Payment
  • Buy a Book
  • Legal Disclaimers

BOUMAN LAW FIRM blog

When does using a Revocable Living Trust make sense?

7/27/2016

 
Many people mistakenly assume that the Revocable Living Trust is only for the very wealthy.  However, in Arizona, a probate action is required whenever someone dies with more than $100,000 of equity in real estate or more than $75,000 in personal property.  Anyone with assets titled in personal name valued higher than these amounts should consider the potential benefits of a Revocable Living Trust versus the costs of establishing one.
 
The best candidates for a Revocable Living Trust are:
  • Persons owning real property in more than one state.
  • Persons wishing to disinherit a potential beneficiary, or when privacy is important.
  • Small business owners, especially if operations would continue after the owner’s death.
  • Married persons with children from a prior relationship.

What are the disadvantages of using a Beneficiary Deed to avoid probate?

7/20/2016

 
There are several arguments against the use of Beneficiary Deeds:
  • Fails to account for potential incapacity of owner.  A Beneficiary Deed fails to address the possibility of the owner becoming incapacitated.  For this reason, the owner should certainly have an up-to-date financial power of attorney, and consider titling the property in a revocable living trust instead.   
  • Fails to deal with unusual situations.  A Beneficiary Deed does not permit the level of customization sometimes needed for unusual or unexpected situations.  For example, a Beneficiary Deed is not able to deal adequately with the possibility of minor, disabled, or irresponsible beneficiaries.     
  • Eliminates many planning options.  For example, the property owner may wish to transfer the property into an asset-protected trust for benefit of the beneficiary, rather than grant outright ownership.  Beneficiary-controlled inheritance trusts can provide substantial creditor and divorce protection, which a Beneficiary Deed cannot.

New Rules in Effect for NFA Firearm Purchases

7/13/2016

 
As of today - July 13, 2016 - rule 41F goes into effect for purchases of NFA firearms such as suppressors (silencers) and SBRs.  For purchases going forward the process is essentially the same for individuals and trustees of gun trusts.  So one of the key benefits of using a gun trust is now lost:  simpler registration process.  But there are still benefits to using a gun trust rather purchasing a NFA firearm individually. 

  • Expands list of eligible possessors of NFA items.  A Gun Trust may expand the list of eligible persons who may possess, use, or transport a NFA firearm.  Any current trustee is eligible including the initial trustee and any later named co-trustees.  For example, you might establish a Gun Trust and later add your spouse and child as co-trustees.
  • Prevents accidental felonies.  A Gun Trust may authorize a current trustee to grant temporary use and possession of NFA firearms to successor trustees, beneficiaries, and other persons while in close physical proximity to the trustee.  For example, a trustee lets a friend borrow the trustee’s NFA firearm while both are at the shooting range.  This may be permitted by the trust document assuming the friend is not a “prohibited person” under the law.  Also, a properly drafted Gun Trust will strictly prohibit unauthorized use and handling of NFA firearms during the initial trustee’s lifetime and after death, and educate all persons involved about relevant laws and regulations.  This will help prevent the trustee and the trustee’s family from committing accidental felonies.       
  • Estate planning.  Upon incapacity or death of the initial trustee, a successor trustee is pre-designated to manage the trust and possess and distribute firearms without any probate or other court interference.         
  • Inheritance protection.  Upon incapacity or death of the initial trustee, a Gun Trust may provide long term protection of the trust property from creditors of the beneficiaries and in the event of a beneficiary’s bankruptcy or divorce.

Is a Living Will the same thing as a Do-Not-Resuscitate Order?

7/8/2016

 
No.  In Arizona, a Pre-hospital Medical Care Directive (aka “Do-Not-Resuscitate Order” or “DNR”) deals exclusively with response by medical personnel to cardiac or respiratory arrest.  The directive must be printed on orange paper and signed by the patient’s doctor and an independent witness.  It is recommended that the patient wear a bracelet to alert paramedics to the existence of a DNR Order. 

A DNR Order is a medical document.  A Living Will declaration is a legal document.  In effect, a Living Will declaration authorizes the implementation of a DNR Order by the patient's health care agent, or if none, by the patient's health care surrogate as determined by Arizona law. 

How to purchase a NFA firearm using a Trust after July 13 (under new Rule 41F)

7/7/2016

 
After identifying the NFA firearm to be purchased, the trustee sends Form 4 (in duplicate) to the ATF with payment of the transfer tax (usually $200 per firearm) and a copy of the entire trust document.  The trustee must also include a Form 5320.23 (“Responsible Person Questionnaire”), two Form FD-258 fingerprint cards, and one passport-type photograph for each responsible person (any current trustee).  The trustee must also send a copy of Form 4 and a duplicate Form 5320.23 to the chief law enforcement officer (usually the sheriff) in the place where the trustee resides.  Other responsible persons for the trust (any other current trustees) must also send a duplicate Form 5320.23 to the chief law enforcement officer where they reside.  If purchasing from a dealer or broker, they should help complete this process as part of the sale.  It is important not to list the NFA firearm on a list of trust property (some trust forms use a Schedule A) until after the ATF has issued the tax-paid stamp approving the transfer.

NFA Gun Trust update

7/6/2016

 
A new draft version of Form 4 for transfer of a NFA firearm was released by the ATF.  The new form includes reference to the definition of responsible person.  I interpret the definition to include current trustees, not successor trustees or beneficiaries.  If your NFA gun trust was prepared prior to release of the new Rule 41F in January 2016, I suggest you have your document reviewed to see whether it unintentionally expands the definition of responsible person to more than just current trustees.  Although not urgent, this issue should be reviewed prior to purchasing a new NFA firearm. 

New rules for purchase of NFA firearms effective July 13

7/1/2016

 
Rule 41F goes into effect July 13 regarding purchase of NFA firearms.  After July 13 both individuals and responsible persons for trusts (current trustees) will have to undergo background check, photograph, fingerprints, and send form to CLEO.

    Author

    Thomas J. Bouman
    Attorney at Law
    Tucson, Arizona

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