Elder Law Issues

When dividing a trust or estate among beneficiaries, most of our clients want an equal distribution among their children (or nephews and nieces, or whomever). Sometimes they ask for an equal division among, say, their three children and their favorite charity. But the basic goal can usually be summed up by the concept of “equal division.”

But that ignores the reality that the value of different assets can be different to the beneficiaries. In other words, retirement accounts are usually worth less to family members than they are to charities. And they are worth less to some family members than to others.

Real estate, valuable personal property, even stock and bond investments, can all mean something different to the different beneficiaries. Are there tax consequences related to any of the assets they might inherit? Then the value will be different based on the level of their income taxation — and maybe by what state they live in.

It can be impossible to truly make “equal” divisions. Even “equitable” divisions can be challenging, since what makes sense today may turn out to be a terrible idea two years from now.

It can be really hard to figure out how to divide assets among several intended beneficiaries. We can help you think through the choices for your own situation, but recognize that you will need to revisit your plans every few years. Join us for this discussion of the issue.

As a widow (or widower), you recently brought out your old estate planning binder to update its contents. You’re surprised to find that the trust you and your late spouse created is supposed to split into two separate trusts — and you never did any such thing. Are you in trouble? Will there be costs?

OR: your spouse died several years ago, and you haven’t heard from your stepchildren since shortly after the funeral. Now you want to amend the trust you created together, but can you? What is this “A/B Trust” language in the correspondence you got from the lawyer way back when?

OR: your second parent recently died, and you are trying to figure out how to handle the trust they created. When you look at the document, you see that there are supposed to be two separate trusts. What do you have to do to catch up with old requirements?

You’re working on your estate planning documents. One of the more important parts of your plan: the special needs trust for your child (or grandchild, or niece/nephew) who has a disability. But what should you expect will be transferred to that special needs trust — either now or at your death?

We review some of the funding choices you will need to consider. Should retirement accounts go into the special needs trust? Or, perhaps, only liquid assets? What about your home?

As we explain, there are no easy answers. Furthermore, the correct answer for your situation may change over time. You should get good, personalized advice from a qualified special needs planning authority.

We have some advice and direction about whether your car (or motor home, or boat, or other vehicle) should be titled to your trust. It’s based on our own recent experience.

As always, our advice is specific to Arizona law. Your mileage may vary. See what we did there?

We explain some of the issues that come up while we are researching your deed (usually for your home) when helping you with estate planning.

Thinking of naming a professional trustee, personal representative or agent? We discuss some of the questions you might ask a prospective fiduciary.

One reason often give for establishing a living trust: trust contests are harder to maintain than will contests. Still, they do happen. Join us for a discussion of what the challenge to a trust might look like.

It’s the end of the year. We’ve posted our newsletter summarizing 2022. Now we’re looking forward to 2023. Join us for a rumination on the passage of time.

Required minimum distribution (RMD) rules are complicated. One set of rules affects those who accumulated an IRA, 401(k) or other retirement account. Another set of rules — well, two sets of rules, actually — affect those who inherit those same retirement accounts after the owner’s death. Did we say two sets of rules? Maybe there are three. Or more.

This week we explain some of the intricacies of RMD rules for inherited IRAs. Our bottom-line advice: talk with a qualified authority (and that might not be the IRA custodian) about your particular situation.

Alternative Dispute Resolution (ADR) can provide alternatives to court proceedings. It might include mediation, or arbitration, or a simplified trial proceeding of some kind. But does alternative dispute resolution have any place in your will or trust?

It might. One way people often try to limit disputes is to include an “in terrorem” clause. Such clauses are sometimes called “no contest” provisions. But maybe you’d like to force any contestant to use a simplified, low-conflict approach to dispute resolution. Consider an ADR provision in your will or trust. Or, for that matter, in your financial or health care power of attorney.