The new tax law increases the estate tax exemption to $11,200,000 for 2018. Portability option and Credit Shelter trusts can protect up to $22,400,000 for married couples. This eliminates the estate tax as a concern for almost everyone (at least for now). The estate tax exemption will be inflation-adjusted for 8 years, then is scheduled to revert back to 2017 levels (adjusted for inflation) in 2026.
The major issues in estate planning will continue to be incapacity planning, mental health and end-of-life issues, inheritance protection, and determining the best way to leave tax-deferred retirement accounts to heirs and beneficiaries.
I'm currently working on the formatting for a new book, tentatively named Arizona Successor Trustee Answer Book. Hopefully to be released privately in January 2018. I think it's going to be an excellent resource.
New ownership of my office building complex just re-painted the exterior of my building from orange to white. I will update the office photos on this website ASAP.
My general advice is to sign new financial powers of attorney about every 5 to 10 years. Many financial institutions commonly reject older power of attorney documents as a matter of internal policy.
My general advice is to sign new health care powers of attorney at least every 10 years. The health care directive forms in Arizona regularly adapt to law changes, so regular updates are appropriate.
If a client begins to show signs of diminished mental capacity, then annual updates to the powers of attorney are appropriate.
Although many states permit self-settled asset protection trusts, Arizona law does not. But you can still establish an Arizona irrevocable trust with asset protection features:
You may contribute assets to an irrevocable trust for benefit of your children. The trust assets will be protected under Arizona law from the creditors of you and your children. Unless you need to exclude the assets from your taxable estate for estate tax purposes, you may serve as trustee and also retain a power to redirect the assets to different beneficiaries upon your death. This is called a testamentary limited power of appointment. The trust assets will be included in your taxable estate, but they will get a full step-up in income tax basis upon your death.
If you are married, you may include your spouse as a lifetime beneficiary of an individual irrevocable trust as long as contributions are separate property. This would permit your spouse to have continued access to the trust assets during your lifetime.
You can also give an independent trust protector the power to move the trust to a state that permits self-settled asset protection trusts, which would permit the trust protector to add you as a beneficiary.
Although I support the passage of Arizona Senate Bill 1439, which protects physicians, nurses, and other health care workers from employment discrimination if they choose not to participate in medical treatments or procedures that could end a patient's life, it is worth noting that this may make it more difficult in some cases for a health care agent to fulfill a patient's wishes as expressed in a living will declaration.
The definition of discrimination includes taking or threatening any adverse action including, but not limited to, termination of employment, transfer, or demotion, and adverse administrative action.
Sen. Katie Hobbs, D-Phoenix, who opposed the bill, told the Arizona Republic that, "A hospital could say it's the policy of this institution that we are not going to provide morphine doses to alleviate pain if the morphine dose could shorten the life of the individual in our care."
Senate Bill 1439 was passed and signed into law by Governor Doug Ducey in March 2017.
I am currently only accepting new estate settlement projects if I drafted the deceased person's will or living trust.
In 2016 the IRS released proposed regulations to the Section 2704 valuation rules, which would end the longtime practice of discounting the fair market value of closely-held business entities for gift and estate tax purposes. But President Trump's January 20 freeze on all pending regulations put a halt to that. While possible the Trump administration chooses to revise the regulations, I find it more likely that the administration will abandon the proposed regulations altogether. This would avoid the loss of a major benefit of using family limited liability companies for estate planning.
No. There is a sample form available, but it is not a prescribed form. It is perfectly fine to sign a Living Will using a different form or even no form at all.
There are, however, specific rules for how a Living Will must be signed and witnessed. A valid Living Will must be signed in the presence of at least one witness or a notary public. The Health Care Agent is not an authorized witness, nor is anyone involved with providing health care to the signer.
President-elect Trump has proposed a repeal of the estate/death tax for all, but his plan would limit the step-up in income tax basis to $10 million.
Trump has proposed a 15% income tax rate for all businesses, including LLCs and S-corps. This could be a huge tax cut for high income self-employed.
Thomas J. Bouman