Erik Alicea, Author at KEYTLaw

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So far Erik Alicea has created 30 blog entries.

Why You Should Consider a Pet Trust in Your Estate Plan

Estate Planning for Pet Owners

If you’re a pet owner, your pets are likely part of your family. You ensure they’re fed, loved, and cared for every day, but have you considered their future if something happens to you? Estate planning isn’t just for your human loved ones—it’s also for the companions who rely on you. In Arizona, pet trusts provide a reliable and secure way to protect your pets after you’re gone.

A pet trust can make all the difference in ensuring your pets’ well-being and avoiding potential complications. Let’s explore what pet trusts are, how they work, and why they’re an essential part of estate planning for animal lovers.

What Is a Pet Trust?

A pet trust is a legal arrangement that ensures your pets are provided for if you pass away or become incapacitated. In Arizona, these trusts are enforceable by law and allow you to set aside funds specifically for your pets’ care.

Here’s how it works:

Funding the Trust: You allocate money from your estate to the pet trust, ensuring there are resources to meet your pet’s needs.
Appointing a Trustee: The trustee manages the funds and oversees how they are spent on your pet.
Designating a Caregiver: You choose a caregiver who will take physical custody of your pet and care for them as instructed.

The combination of a trustee and a caregiver provides a checks-and-balances system, ensuring your pet receives the care you envisioned.

Why Not Just Use a Will?

While a will can designate who inherits your pet, it has limitations when it comes to ensuring your

The Risks of Sharing Your Property Title with Your Child

Your home is more than just a valuable asset. It’s a place where memories are made and where years of hard work have been invested. Naturally, you want to ensure that it transitions smoothly to your child when the time comes.

At first glance, adding your child to the property title may seem like a simple way to avoid probate. However, this decision can trigger a chain reaction of unexpected consequences, from financial risks to legal complications. Before you take this step, it’s important to understand the potential pitfalls and explore better alternatives.

1. Tax Troubles: Capital Gains and Gift Tax Implications

When it comes to transferring property, taxes can have a major impact on your child’s financial future. Adding their name to your home’s title might feel like a straightforward solution, but it can create tax burdens that are anything but simple.

Capital Gains Tax: A Costly Surprise

If your child inherits your home after your passing, the tax basis (the value used to calculate gains for tax purposes) is adjusted to the property’s market value at the time of your death—a provision known as the “step-up in basis.” This adjustment can save your child tens or even hundreds of thousands of dollars in capital gains taxes if they decide to sell the property.

However, by adding your child to the title now, they inherit your original purchase price as the basis. For example, if you bought your home decades ago for $150,000 and it’s now worth $600,000, your child would owe taxes on the $450,000 gain when selling the home. This financial burden can be completely avoided with proper planning.

Gift Tax Consequences

Adding your child to the title might also trigger gift tax implications. Transferring a portion of your

The Importance of Proper Asset Titling in Estate Planning

Estate planning is about more than drafting a will or creating a trust; it’s about ensuring your legacy is protected and your loved ones are spared unnecessary legal and financial hurdles. One critical yet often overlooked aspect of estate planning is asset titling—the process of aligning asset ownership with your estate plan by transferring assets into your trust or naming beneficiaries. Proper asset titling can make the difference between a smooth transition of assets and a lengthy, costly probate process.

This guide explores why asset titling matters, the consequences of neglecting it, and actionable steps to secure your estate and protect your family.

Why Asset Titling Matters

Proper asset titling is a cornerstone of effective estate planning because it determines how your property and financial accounts are distributed upon your death or incapacity. Incorrectly titled assets can derail even the most well-thought-out estate plans, often leading to unintended outcomes.

Avoiding Probate

The primary goal of asset titling is to avoid probate—a court-supervised process to validate a will and distribute assets. While probate ensures legal compliance, it can also be time-consuming, expensive, and emotionally taxing for your family. By properly titling your assets, you ensure they transfer directly to your intended beneficiaries without court intervention.

What Happens When Assets Are Not Properly Titled?

When assets are not titled to align with your estate plan, they may become subject to probate or even pass to unintended recipients. This can create complications and unnecessary delays for your loved ones.

Real-Life Example

Consider a bank account held solely in your name. If you pass away without a named beneficiary or trust ownership, your heirs will need to go through probate to access the

Planning for Your Business’s Future: Estate Planning and Buy-Sell Agreements

As a business owner, you pour time and effort into building your company. But what happens if you become incapacitated or pass away? Without a plan in place, your business—and your loved ones—could face significant uncertainty. Succession planning and buy-sell agreements are critical tools to ensure your business continues to thrive while protecting your family’s financial future.

Why Every Business Owner Needs Estate Planning

If you own a business, estate planning is essential. Without a will or trust, your assets, including your business, may be distributed according to Arizona’s intestate succession laws. This could result in unintended outcomes, such as your company passing to someone who cannot manage it effectively.

Estate planning allows you to determine:

Who will inherit your business interest: A will or trust ensures your business is transferred to the right person without requiring probate.
What happens during incapacity: If you become incapacitated due to illness or injury, a comprehensive estate plan provides guidance on who will manage your business.
How your family is supported: Life insurance can provide financial stability for your loved ones if your business cannot operate without you.

The Role of Buy-Sell Agreements in Business Succession

A buy-sell agreement is a contract between business owners that outlines what happens if an owner dies, retires, divorces, or experiences another triggering event. It ensures a smooth transition of ownership and prevents disputes.

Common triggering events include:

Death: Specifies whether the deceased owner’s interest will be bought by the company or other owners.
Disability: Allows for a buyout if an owner

Understanding the Role of a Trustee in Arizona

A trustee plays a vital role in the administration of a trust, ensuring that its terms are executed properly and that the beneficiaries’ interests are protected. Selecting the right trustee and understanding their responsibilities can prevent costly mistakes and family conflicts. Here’s what you need to know about trustees, their legal duties, and how they help protect your trust and its assets.

What Does a Trustee Do?

A trustee is responsible for administering a trust according to its terms. Their duties begin after the trust creator’s passing and can include:

Notifying Beneficiaries: Trustees must inform beneficiaries of their role and provide them with a copy of the trust agreement. This ensures transparency and allows beneficiaries to understand their rights.
Safeguarding Assets: Trustees must take possession of trust assets to prevent waste or misuse. Proper management is essential to preserving the trust’s value.
Managing Creditor Claims: In Arizona, trustees notify potential creditors of the trust administration. This allows creditors to file claims within a four-month period, after which the trustee can settle valid claims and move forward with distributions.
Distributing Assets: Once obligations are fulfilled, trustees distribute remaining assets to beneficiaries as outlined in the trust agreement.

In some cases, a trustee may have ongoing responsibilities, such as managing assets for a minor beneficiary until they reach a certain age.

Why Is Choosing the Right Trustee So Important?

A trustee has fiduciary duties, which means they must act in the best interests of the beneficiaries and the trust. This is one of the highest legal standards, and failure to meet it can

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