Estate Planning

The United States can hold parties to asset transfers, both transferors and transferees, personally liable for outstanding debts owed to the United States by a debtor.

In July 2011, Arizona’s Legislature enacted, and Governor Brewer signed, the current version of A.R.S. § 28-2055(B). This statute provides that a person (called a grantor) can designate a beneficiary to whom ownership of a motor vehicle will be transferred upon the death of the grantor via a beneficiary deed.

Arizona life insurance beneficiaries who are deemed to have “insurable interests” in the lives of another, other than those effecting the insurance or their legal representatives, are “entitled to [life insurance] proceeds against the creditors and representatives of the person effecting the insurance.

A qualified personal residence trust, or QPRT, can reduce the federal estate tax associated with transferring property to heirs, reduce the federal gift tax associated with such transfer, and, provide asset protection.

An Arizona living trust is an arrangement in which a person, called a settlor, transfers his/her assets to a revocable trust for the benefit of others upon the settlor's death. Living trusts are commonly used as an alternative to wills in order to direct the distribution of a person's assets after his/her death and to avoid probate. In contrast, an Arizona testamentary trust is created by a decedent's will upon his/her death. Unlike living trusts, testamentary trusts are not created to avoid probate.

An Arizona living trust is a means of structuring the transfer of a decedent's assets upon his/her death in a manner that aims to avoid probate completely or minimize the size and complexity of a particular probate.

Minority discounts are a generally accepted practice used in determining the fair market value of non-controlling, minority interests in corporations. Such discounts are also often deemed valid by the Internal Revenue Service (IRS) when calculating the federal estate and/or federal gift taxes that are associated with interfamilial transfers of interests within a corporation.

Over the last several decades it has become routine practice to provide in a married couple’s estate plan for the division of the estate of the first spouse to die into two portions which are then to be held in two separate trusts. One portion is the amount that is exempt from federal estate tax (the “exclusion amount”) and the other is the excess, if any, for which the marital deduction is claimed. The result is no estate tax on the death of the first spouse, regardless of the size of the estate. Furthermore, because the exclusion amount is kept separate from the survivor’s estate it is not taxed when the survivor dies.

Many people believe that estate planning is only for those who have significant wealth, however, estate plans can benefit everybody because they enable people to specify how the assets they leave behind will be distributed, specify steps they would like taken to prolong their lives, designate another to act on their behalf for non-healthcare-related matters if they are incapacitated, and provide for loved ones after their deaths in a supervised manner that is consistent with their desires.