Moore Law Firm

Moore Law Firm

9949 W. Bell Road
Suite 201
Sun City, AZ 85351
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Sun City Estate Planning Blog

How to utilize a trust when dealing with blended family issues

Blended families are common across Arizona. Within these families, children from previous relationships are brought into the familial fold, sometimes with open arms and sometimes with conflict. Regardless of the relationship that forms between these individuals, matters can be complicated, especially as it relates to estate planning. Those who take a basic approach to this process can find that the distribution of their assets can be complicated, which may lead to an outcome that was never intended in the first place. In other words, without competent estate planning, those who are part of a blended family may lose control over their estate and its distribution once they pass away.

One reason is because inline succession isn't clear-cut. Say, for example, that an individual decides to leave all of his assets to his wife. Once she takes control of that property, she may have no intention of leaving any portion of it to her deceased husband's children from another marriage. This means that she can disinherit those children and be within her legal right to do so. This may be counter to the husband's intention of leaving assets to his wife with the understanding that his children would later be provided for.

The marital trust can be crucial part of an estate plan

Most people who engage in estate planning simply want to make sure that their loved ones are financially cared for after their passing. There are many ways to do this, of course, which is why individuals who find themselves in the midst of this process should carefully and thoroughly consider which options further their interests and the interests of their loved ones the most.

One commonly used estate-planning vehicle is the marital trust, also known as an "A" trust. Here, an individual funds a trust, which is managed for the benefit of that individual's surviving spouse. This means that money earned from the trust will be payable to the surviving spouse. In some instances, a surviving spouse may even receive distributions of the trust's principal. The trust then details to whom the assets will be distributed upon the surviving spouse's death.

The basics of estate execution and trust administration

Serving as the executor of an estate or the administrator of a trust carries significant responsibilities. When those responsibilities are improperly handled, legal action can be taken against an executor or administrator. Therefore, before agreeing to serve in this position, an individual should fully understand what it entails.

An estate executor and trust administrator are fiduciaries, which means that they must make decisions that further the best interests of the estate or trust. The first step in this process is to assume control of, inventory, and evaluate, all assets at hand. This may sound like an easy enough process, but it can actually be quite challenging. Some accounts may require a certain type of letter from the court along with a birth certificate, and professional appraisers may need to be hired to provide a clear and accurate assessment of assets' value.

Protect your disabled child with a special needs trust

While it is important for everyone to create an estate plan as they grow older, doing so is particularly important for you if you have a disabled or special needs child who will require considerable care in your absence. Providing lifelong care for your disabled child can cost millions, and one effective method of making sure your child has access to what he or she needs involves creating what is known as a special needs trust.

Creating a special needs trust, which you can fund using life insurance, among other avenues, gives you an opportunity to provide for your disabled child without limiting his or her ability to obtain assistance through other methods.

When should an individual revisit an estate plan?

Sadly, many Arizonans view estate planning as a burdensome, depressing endeavor that is better left for later. However, estate planning has considerable significance. After all, the terms laid out in an estate plan, or the lack of an estate plan, will dictate how one's estate is distributed, which may or may not be in line with the deceased individual's wishes. This means that loved ones may be left without the financial support they expected and the deceased individual intended.

While merely taking the first step to engage in estate planning can be a big one, it should not be the end of the estate planning journey. Instead, individuals need to be prepared to maintain their estate planning documents, including wills and trusts. Neglecting to do so can be just as catastrophic as failing to create an estate plan in the first place.

Tracking personal property during estate planning

Estate planning can be an enormously complex endeavor. This is especially true when an individual identifies a number of heirs and beneficiaries and there are significant assets with which to deal. However, while passing down retirement accounts and homes can be relatively easy, the matter can become even more detail-oriented when dealing with personal property.

One reason why dealing with personal property during estate planning can be challenging is because it is often hard to track. Property can be misplaced or lost, and family members can even snatch them up unbeknownst to the owner. In order to better track this property, individuals should consider keeping an inventory that includes appraisals and other property-related documents, such as letters of authentication. This way, the executor of an estate can easily identify property and its location prior to distributing assets in accordance with an estate plan.

What to consider when choosing a health care proxy

While a lot of estate planning focuses on the nuts and bolts of leaving assets to loved ones, it can also include matters related to end of life care. This is why it is important to give due considerations to legal documents like health care directives. A health care directive names an individual who will take on the responsibility of making health care decisions in the event that the document's creator becomes unable to communicate his or her wishes.

When choosing someone to act as a health care proxy, an individual must consider a number of factors. Of course, the individual chosen should be trustworthy, especially considering he or she might literally have an individual's life in his or her hands. This individual may have to make challenging decisions in accordance with your wishes, not their own, so they also need to be steadfast and assertive. The named individual should also live relatively close so that they can act quickly if called upon.

When do trusts no longer function?

The creation of a trust can have a profound impact on its identified beneficiaries. If handled correctly, these estate planning tools can provide financial resources for years to come. The assets contained within those trusts can provide money needed for a beneficiary's education, a beloved pet's care, to further a charitable purpose, or provide a beneficiary with some extra cash to spend on whatever he or she desires. Trusts don't last forever, though, which is why this week we'll briefly look at how trusts can end and what happens when they do.

There are a limited number of ways that a trust can end. One way, of course, is when the trust's assets are depleted. If a trust only contains cash and all principal and interest has been distributed to a beneficiary, then the trust has no further purpose and will end. The same holds true when pieces of physical property are held in trust. A trust containing a house, for example, will end when the house is no longer in existence, such as if it is destroyed in a fire or natural disaster.

4 important characteristics of a health care power of attorney

One of the most important estate planning decisions you will make is selecting your health care power of attorney. A health care power of attorney, also known as a health care proxy, is an individual you designate to make medical and health decisions on your behalf in the event you are unable to do so yourself. 

Naming this person can bring you peace of mind and resolve family conflict. But it can be tricky to narrow down your choice to one person. Here are a few characteristics to keep an eye out for when deciding on your power of attorney.

Transfer on death accounts may play important role

Many Arizonans share accounts with a spouse or other loved one. While these accounts can become subject to legal proceedings like divorce, they can also play a pivotal role in estate planning. Generally speaking, a jointly-held account will transfer to the other owner upon one owner's death. But what happens when that second owner passes away? Without an estate planning document to dictate that, the assets in that account may be subjected to the probate process. This can be costly, time-consuming, and leave assets vulnerable to claim by those who the deceased may not have wanted to be involved.

This is where transfer on death provisions can prove beneficial. These accounts can transfer assets to a named beneficiary upon an individual's death, thereby bypassing the probate process. While these transfer on death accounts, also known as totten trusts, are often utilized when all parties to a jointly held account pass away, they can also be used to transfer portions of an account upon the death of just one of the account holders. However, a spouse is still entitled to a fair share of those assets.

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Moore Law Firm
9949 W. Bell Road
Suite 201
Sun City, AZ 85351

Phone: 623-207-9153
Phone: 623-207-9153
Fax: 623-977-7237
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