On behalf of John Dorris of Dorris Law Group posted in Estate Planning on Wednesday, September 16, 2015.
Some Arizona residents are uncertain about the best manner in which to pass their assets on to their intended beneficiaries. By understanding how certain laws have changed, people may then be able to make more-informed decisions about the types of estate planning tools they should use.
Life insurance policies and retirement plans allow people to name beneficiaries to them. This lets the proceeds pass directly to the named beneficiaries of them without the need to go through probate. Revocable grantor trusts are a way to pass other types of assets to beneficiaries without probate. With these, the person grants their assets to the trust, then serves as the trustee of it while they are still living. When they die, their successor trustee then distributes the assets to the beneficiaries according to the trust’s mandates.
In the past, when two spouses had individual trusts and one died, the trust would normally go to the surviving spouse. When that spouse later died and passed the assets on to the children, the estate tax exemption would then apply to the entire combined estate. Now, however, the IRS has portability rules, which allow the surviving spouse to add any unused part of their deceased spouse’s exemption to their own when they pass away.
People who are in the process of thinking about how to pass their assets to their beneficiaries may want to consult with an estate planning attorney. There isn’t a one-size-fits-all approach to estate planning, and an attorney may be better able to advise their clients about the most appropriate tools for them to use, depending on their estate needs and goals. In some cases, it may make sense to allow the estate to go through probate with a will. In others, people may need to choose tools that better protect their assets from creditors or other assorted needs.