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Bouman Law Firm is a registered subscriber to the Arizona Healthcare Directives Registry (“AzHDR”), an online registry for secure storage and sharing of your health care power of attorney and living will declaration.   The registry was established by the Arizona Department of Health Services and is currently administered by Contexture, a nonprofit organization that provides strategic, technical, and administrative support.  Contexture includes the registry as an integrated component of the Arizona Health Information Exchange.  This gives participating Arizona health care facilities instant access to your health care directives when they are needed most.   The registry is free to Arizona
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Congress recently passed SECURE Act 2.0.  The updated law includes countless items that affect financial planning and tax planning, however there isn’t much that affects estate planning.  Only 2 items are worth noting here:1.  The age for required minimum distribution increased from age 72 to age 73. 2.  There are no more mandatory lifetime distributions from Roth 401(k) accounts.
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The IRS recently issued proposed regulations regarding the treatment of tax-deferred retirement accounts after the SECURE Act of 2019.  Here are 2 highlights relevant to estate planning:

  • The age of majority will be defined as age 21.  This means that a minor child of the deceased account owner may elect stretch IRA treatment for pay-out of required minimum distributions until age 21 and then use the usual 10-year liquidation rule until age 31. 
  • The 10-year liquidation rule will require a beneficiary to take required minimum distributions based on the beneficiary’s life expectancy during the 10-year liquidation period if the deceased

  • Continue Reading New IRS Regulations for Retirement Accounts after SECURE Act

    The FDIC recently approved a rule to change how it calculates the amount of insurance is available for bank accounts held in trusts.  Effective 4/1/2024, a trust account will be insured up to $250,000 per beneficiary, not to exceed five, regardless whether the trust is revocable or irrevocable or how the trust allocates inheritance among beneficiaries. For example, a joint living trust for a married couple with 2 children might qualify for up to $1,000,000 of FDIC deposit insurance.  But a joint living trust for a married couple with 5 children would only qualify up to $1,250,000. The new rule is intended
    Continue Reading FDIC Insurance Rules for Trusts are Changing

    A revised 2022 edition of the Arizona Estate Administration Answer Book was recently published by Barnes & Noble Press.Practical Answers to Common Questions for Any Size Estate in ArizonaThe Arizona Estate Administration Answer Book is your best resource for understanding practical issues that commonly arise when responding to the death of an Arizona resident or property owner.  Each chapter provides advice and explanations to help you wade through the complex, and often bizarre, legal requirements associated with estate and trust law in Arizona.  Written in easy-to-read question and answer format, the Arizona Estate Administration Answer Book covers a comprehensive list
    Continue Reading Arizona Estate Administration Answer Book

    A DocuBank membership provides 24/7 access to your health care directives.  You will receive a wallet card instructing medical providers how to instantly acquire copies of these documents, plus any other health-related information you choose to make available.  DocuBank also offers an online SAFE to store copies of your estate planning documents in one secure place. NEW for 2022:Most estate plans prepared by Bouman Law Firm include a 1-year complimentary membership to DocuBank (others qualify for a discounted rate). Click here for more information.
    Continue Reading DocuBank (Instant Access to Vital Documents)

    First, the good news:  On 1/1/2022 the Arizona homestead exemption amount increases from $150,000 to $250,000.  The homestead exemption, which is automatic in Arizona, is intended to protect an Arizona resident’s primary residence (“homestead”) from creditors.  But the new law includes several intricacies that make it more complex than it initially appears.  For example, the new law requires any existing judgment liens (recorded in the same county) to be paid when the homeowner either sells or refinances the residence.  The prior law stated that a homeowner with less than $250,000 equity could still refinance a home loan without having to
    Continue Reading Important Law Change: Homestead Exemptions in Arizona

    No, because the LLC must have a legitimate business purpose.  A business purpose would include providing a service, product, or usable space to an unrelated person or company.  Every small business provides a service or product, or both, to the general public, while investment real estate provides a place to live or do business.  Your personal residence does not have a business purpose and neither does your personal investment brokerage account.          Arizona residents qualify automatically for a homestead exemption, which protects up to $150,000 of equity even if a judgment creditor forces a sale of the home.  For homeowners with
    Continue Reading Will a LLC protect an Arizona resident's personal residence and non-retirement brokerage investments?

    Many people I meet would benefit from an irrevocable asset protection trust, a strategy generally assumed to be too complicated and too expensive.  But I am not referring to families with vast inherited wealth or the Mark Zuckerberg-type entrepreneurs.  So how do you know if an asset protection trust might be right for you?  Consider the value of these assets you may own:

  • The amount of equity in your personal residence above $150,000;
  • The value of your financial investments (savings, brokerage accounts, notes receivable, etc.) not held in a retirement account;
  • The value of your investment real estate (other than

  • Continue Reading What is an Irrevocable Arizona-based Hybrid Asset Protection Trust?

    In May 2020 the executive council for the Probate and Trust Section of the State Bar of Arizona approved a proposed statute permitting the creation of Arizona qualified spendthrift trusts.  This type of self-settled trust is more commonly known as a domestic asset protection trust.  The proposed statute (A.R.S. 14-10821) would establish a framework for Arizona residents to protect personal assets from future claims in a manner consistent with and subject to Arizona fraudulent conveyances laws.  If enacted, Arizona would become the 20th state to allow self-settled spendthrift trusts.  
    Continue Reading Arizona Domestic Asset Protection Trusts – Coming Soon?

    In order to be successful as an estate planning lawyer, I must break down complex topics to manageable teaching points.  Here are a couple examples:There are 3 tools in the estate planning toolbox for transferring assets upon death:1- Beneficiary designation2- Will3- TrustThere are no more tools.  Every estate plan will use a combination of these tools and each has its advantages and disadvantages.  My job is to determine which tool is best suited for each asset, while making sure the client is comfortable using the tool. There are 3 ways to leave inheritance to a beneficiary:1- Outright2- Restrict3- ProtectThe outright
    Continue Reading The Estate Planning Toolbox

    The SECURE Act, signed into law on December 20, 2019, is the most impactful legislation to affect estate planning in decades.  Although the SECURE Act includes many positive changes in regard to tax-deferred retirement accounts, it no longer permits most non-spouse beneficiaries (e.g., children) to withdraw an inherited retirement account over the beneficiary’s life expectancy (aka “stretch IRA”).  Instead, the default law now requires the entire account to be withdrawn and liquidated by the end of the 10th year after the death of the account owner (“10-year liquidation rule”).  This change has major implications when considering whether to name an
    Continue Reading Updating your Estate Plan in Response to the SECURE Act

    The SECURE Act, signed into law on December 20, 2019, is the most impactful legislation to affect estate planning in decades.  Although the SECURE Act includes many positive changes in regard to tax-deferred retirement accounts, it no longer permits most non-spouse beneficiaries (e.g., children) to withdraw an inherited retirement account over the beneficiary’s life expectancy (aka “stretch IRA”).  Instead, the default law now requires the entire account to be withdrawn and liquidated by the end of the 10th year after the death of the account owner (“10-year liquidation rule”).  This change has major implications when considering whether to name an
    Continue Reading Updating your Estate Plan in Response to the SECURE Act