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Arizona Estate Planning Lawyer
Practicing in the area of estate planning, wills and trusts, Hilltop Law Firm offers comprehensive solutions that allow our clients to choose the best option for their specific needs.
As an expert in assisting his clients with estate planning that meets their goals within their means, Cy Hainey and his team are equipped to assist folks in any situation with preparing for the financial futures of their loved ones.
Preparing Legal Wills In Arizona
Depending on your situation, a will could be the most important document in your life.
If an individual dies without a will, Arizona law dictates how an individual’s wealth must be distributed.
Age Requirements When Making Your Last Will and Testament
To create a valid will, the individual creating the will must be at least 18 years old and of sound mind.
The individual who has created the will and signing off on the final draft must be able to comprehend the extent of their property and be aware of who his or her heirs are.
The individual creating the will must also comprehend that by executing a will, he or she is giving clear and direct instructions to who inherits upon his or her death.
Requirements For Wills Under Arizona State Law (Ariz. Rev. Stat. § 14-2502)
Arizona law requires that the will be in writing, signed by the individual creating it(Testator) and two witnesses
If the testator is unable to physically sign, then he or she may direct someone else to do so, while in the testator’s presence.
Arizona Law requires that each witness physically observe the testator sign the will or have the signature on the will verbally verified by the testator
When signing the will, the Testator and another witness must be present while the two witnesses sign their signatures.
Requirements Of Valid Witnesses To Wills (Ariz. Rev. Stat. § 14-2505)
A witness to a will must be mentally competent.
Generally, lawyers recommend that witnesses not be named as a beneficiary in the will.
This demonstrates that the witness is a disinterested person not seeking personal gain as beneficiary of the will.
The use of an interested witness does not invalidate the will.
Holographic Wills Under Arizona Law (Ariz. Rev. Stat. § 14-2503)
Arizona law allows for holographic wills, or handwritten wills.
A holographic will is valid in Arizona, witnessed or not, if the signature and the material provisions are in the handwriting of the testator.
A will may be simultaneously executed, attested and made self-proved by its acknowledgment by the testator and by affidavits of the witnesses if the acknowledgment and affidavits are made before an officer authorized to administer oaths under the laws of the state in which execution occurs and are evidenced by the officer’s certificate, under official seal, using special language.
Administering a Trust May Be Easier Than Probate
Although a trust requires administration, a trust may help avoid probate issues.
When Seeking The Counsel of Arizona Trust Attorneys
Trustees interested in seeking the counsel of an experienced Arizona Trust Attorney should take the following steps to ensure speedy assistance.
- Have Trust Assets Inventoried and Appraised
- Ensure Any Required Estate Taxes Have Been Paid
- Notify All Beneficiaries
- Fulfill All Trustee Obligations Under Az Trust Law
- Exercise Full Powers Available To Preserve The Trust
Negligence By Representatives & Trustees
Unfortunately, it is quite common for representatives or trustees to jeopardize the trust by failing to act in properly administering the estate.
These oversights can sometimes be intentional, in the event that a representative or trustees may benefit from leaving estate assets unsold for extended periods after the decedent’s death.
Creating a Revocable Living Trust in Arizona
Most Arizonans look to establish revocable living trusts in the interest of avoiding probate in the future.
While a will indicates how an individual’s assets should be divided through probate court, beneficiaries receive direct transfers from the trust without ever going through probate.
Creating a revocable living trust provides beneficiaries with their portion of your assets much faster than going through probate, while substantially reducing the associated legal costs over the life of the trust.
Revocable Living Trusts Provide Expanded Control
In the interest of expanding control over how or when beneficiaries claim their portion of assets,revocable living trusts allow for stipulations to be applied giving these directions.
The author of the trust can direct the trustee to wait until specific time frames or benchmarks have been met before distributing the assets to beneficiaries.
Often holders of trusts direct that their beneficiaries only receive income made from investments, maintaining the principal value of the trust for future family members.
Securing Your Assets Through IRA Trusts
Utilizing an IRA Trust as part of an estate, individuals can be confident that the trust will coordinate the distribution and administration of their IRA assets after their death.
An IRA Trust typically benefits individuals with tax-deferred retirement accounts in excess of $100k.
Extensive contingency planning post-death with asset protection as well as savings through income-tax rules make IRA Trusts very useful to preserving an estate.
Key Benefits of Establishing an IRA Trust
- Larger Inheritances for Beneficiaries Through Income Tax Deferral
- National Asset Protection on inheritance from judgements, creditors, bankruptcy, and ex-spouses
- Holder of the Account can establish a contingency plan for all IRA assets if the beneficiary dies prematurely, faces divorce, or has mental incapacity for an extended period.
In an IRA Trust, the account holder maintains control over all IRA investments, choice in beneficiaries, and distributions during their lifetime.
When To Adopt a Special Needs Trust Into Estate Planning
Often critical to ensuring a beneficiary with a disability can inherit and still receive benefits from the Government, Special Needs Trusts are designed to ensure the continuation of both.
A Special Needs Trust (often referred to as a supplemental trust) provides funds to a beneficiary that suffers from a disability, in a way that also preserves their ability to receive critical Government benefits.
Most often, parents with a child that has special needs will set up a Special Needs Trust to ensure their child receives a distribution of their assets at the time of their death.
Because the child does not own or control these assets, the Trust does not put the child’s eligibility for Medicaid or Supplemental Security Income (SSI) at risk.
Individuals with a disability are most likely in need of lifelong assistance, especially in regards to their health care.
As the vast majority of people with disabilities may never be employed, receiving continued health insurance under Medicaid ensures their consistent care.
If a disabled individual inherits assets directly from his or her parents, this will likely disqualify the individual from receiving any further Medicaid benefits.
This ensures continued coverage of SSI and Medicaid, regardless of the dollar value a trust has, as the Government does not count these funds as belonging to the beneficiary.
Tackling Future Health Care Costs Through Medicaid Planning Trusts
To maximize savings and prevent assets being used for health care or nursing home costs, a Medicaid Trust works as a cost saving option.
An irrevocable trust, Medicaid Trusts hold assets of an individual who may ultimately be in the care of a nursing home at some point in the future.
In most cases, a properly constructed Medicaid Trust names a child as trustee, though it may also be a friend, relative or independent party.
A Medicaid Trust benefits from being the only trust that has exemption from rules on trusts than jeopardize Medicaid eligibility.
To ensure Medicaid does not disqualify any assets included in a Medicaid Trust, the assets must be transferred into the trust at a minimum of five years prior to going into the care of a nursing home or seeking long-term care.
Understanding How a Medicaid Trust Works
Medicaid Trusts are irrevocable.
A future Medicaid recipient has the ability to use the assets within the trust, such as a home.
Because these assets are being held within the Medicaid Trust rather than by the recipient, they are free be to used without fear that the government will consider the assets when qualifying the citizen for Medicaid.
A Medicaid Trust also provides that in the event of a recipient’s death, the assets can be passed on to beneficiaries named in the trust.
Establishing a Medicaid Trust acts as an excellent way to avoid spending away one’s assets in order to qualify for Medicaid.
Charitable Trusts Provide For Your Family While Giving To Charity
These allow a donor to establish assets set aside for one or more charities.
Charitable Trusts come in two types, Charitable Remainder Trusts and Charitable Lead Trusts.
Considered split interest trusts because assets are divided between a charitable beneficiary and non charitable beneficiary.
The maker of a Charitable Trust has the power to choose either depending on their respective goals in regards to estate planning or asset preservation.
Both types are similar because the assets are divided between a charity and non charitable party in either distinction.
Differences Between CRTs and CLTs
The main distinction between a CRT and CLT appears in how the income interest gets distributed.
In a CRT, individuals receive the income interest, while charities are provided the remainder.
With CLTs, the income interest goes directly to the charity during an individual’s lifetime or for a set duration of years, and individuals receive the remainder of the assets at the end of the trust term.
Asset Protection Trusts: Domestic and Offshore
Legally referred to as a Trust Deed, an Asset Protection Trust allows the value of an item to be held by one or more trustees.
Duty-bound to fulfill the intentions of the Trust’s settlor, trustees act in a fiduciary role for the beneficiaries of the trust.
An Asset Protection Trust ensures that creditors do not assume possession over any assets held within the Trust.
Asset Protection Trusts can be established for both Domestic and Offshore holdings.
Choosing Your Asset Protection Trust - Offshore or Domestic
Gaining popularity with estate planning attorneys, Domestic Asset Protection Trusts are fairly new in regards to estate planning.
Many clients are more interested in Domestic Asset Protection Trusts because their name sounds more appealing to some, but their efficacy leaves many estate planning experts with doubts.
Offshore Asset Protection Trusts have a long history in estate planning, with many case law examples building their credibility.
In addition to strengths in having a long case law history, Offshore Asset Protection Trusts are proven effective and beyond the reach of local courts, none of which can be said of Domestic Asset Protection Trusts.
Establishing Your Disclaimer Marriage Trust
In the interest of creating flexibility in planning for asset protection of a surviving spouse and ensuring that the assets of the deceased spouse gets passed on to the original beneficiaires as intended, Disclaimer (Marriage) Trusts achieve these goals.
A Disclaimer Trust provides the surviving spouse up to 9 months in order to execute a valid disclaimer, typically prepared by an attorney for the surviving spouse to sign.
Despite the grief that naturally occurs during the death of a spouse, this should be done sooner rather than later after their passing.
The urgency of getting the disclaimer done comes through the many ways a surviving spouse might make this disclaimer invalid if too much time exists between preparing a valid document.
A surviving spouse waives the rights to change any disclaimed benefit or asset in any way until they have been moved into a Disclaimer Bypass Trust.
The surviving spouse may also opt to have the assets come to the outright rather than establishing a Disclaimer Bypass Trust.
Disclaimer Trusts have become more popular as a level of uncertainty has risen as to how the Federal Estate Tax Exemption may change in the future.
Healthcare Power of Attorney in Arizona
Several situations in life can prevent an individual from making his or her own decisions in regards to their healthcare and best interests.
Arizonans must prepare for being unexpectedly incapacitated by designated an individual they trust to act on their behalf as their healthcare power of attorney.
As a Healthcare Power of Attorney, the designated party acts as an agent in the event of an emergency to make critical health decisions on his or her behalf.
The Powers of Attorney for Healthcare are authored prior to the actual necessity of an emergency and only become effective in the event that the principal becomes incapacitated and unable to make their own healthcare decisions.
While Healthcare Powers of Attorney cover major medical crises, agents are not empowered to admit the principal into a mental health care facility as an inpatient.
In order to admit the principal into an inpatient mental health care facility, Mental Health Care Power of Attorney would be required.
Enacting Mental Health Care Power of Attorney in Arizona
Often created at the same time as Healthcare Power of Attorney, Mental Health Care Power of Attorney can also be established at a later date under Arizona State Law.
A Valid Healthcare Power Of Attorney must clearly outline the principal’s intentions to pass authority over health care decisions to a specific person.
This declaration must be signed by the principal while outside of duress and of sound mind.
An adult that has no relation to the principal in regards to being a relative or heir that has no involvement in the principal’s healthcare must bear witness to the signing of these documents.
Know Your Rights In Arizona
Speaking with Cy T. Hainey and his team at Hilltop Law Firm will give you a clearer picture of the options available to you in relation to your Estate Planning needs.
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