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Mark Moritz, Esq.

Mr. Mark Moritz is an attorney in Chandler specializing in estate planning with an emphasis on ‘non-boilerplate’ situations.  In addition to his law degree from Arizona State University, he has also earned the designations of Chartered Life Underwriter (CLU) and Chartered Financial Consultant (ChFC).   He was the past Chairman of the Probate and Trust Section of the Maricopa County Bar Association on top of being member and past president of various estate planning organizations.

2. Estate Planning (Who’s going to get my stuff when I die?)

• Wills
• Beneficiary Designation: Life insurance proceeds, retirement plans, annuities, etc.
• Right of Survivorship: Bank accounts, brokerage accounts, mutual funds, automobiles and real estate
• Transfer on Death/Pay on Death: Bank accounts, brokerage accounts and mutual funds
• Deed: Real estate
• Trust                 

3.  With a Will, you can dispose your property on death; appoint a personal representative (executor as called in other states); name a guardian for minor children; and direct payment of debts and taxes. The Will is the “deuce of clubs”.  If there is ever a conflict between the Will and any other methods of distribution such as designated beneficiaries for IRAs, the term in the Will is no longer effective. 

(a)  A holographic (handwritten) Will is valid in Arizona provided that the entire document is in the testator’s handwriting and signed by the testator.  No witness is required in this case.  Typed Will is also valid but it must be signed by the testator with two witnesses’ signatures and preferably notarized (even though it is still legal if not notarized.  Having the Will notarized saves the trouble of calling the witnesses to court when there’s a need to verify their signatures).  

Guests enjoying their lunch during the workshop

(b) Same requirements as above apply if you want to make amendments (codicil) to your Will. 

(c ) Bequests can be specific (in the form of dollar amount or property), percentage or residual of your estate.  

(d) Federal estate tax exemption is now $5,120,000 and the rate is 35% on the excess but note that the exemption is scheduled to decrease to $1,000,000 on January 1, 2013.  However there is unlimited transfer of wealth to the surviving spouse with no estate tax due. The problem will arise when the second spouse passes away and the estate is larger than the exemption amount.

 4.   If there’s no Will (intestate distribution), the estate will go to your spouse and then your children (as defaulted by Intestate Succession Law in Arizona).  Nothing will be left for survivor of unmarried couple living together or for charities.  Without a Will, a bond is required on the personal representative unless the heirs formally agree that a bond is unnecessary.  You can waive the bond requirement in a Will. 

5.   Revocable Living Trust:  It can help to save estate taxes for married couples with estates larger than the exempt amount by doubling the exemption amount and is also useful for attaching “strings” for distributions.  Distribution can be clearly split for his/her kids (from previous marriage).  You can also set up irrevocable trust so that the principal is protected from the beneficiaries’ creditors and finally, unlike a Will, it avoids the probate procedure.  However, avoidance of probate is restricted only to assets in the trust.  If you do not fund your trust, the assets outside the trust are still subject to probate. 

Grace Lau, CEO of PacWest Financial Management delivering her opening address at the workshop

6.   Life Insurance:  Assets are distributed to the beneficiaries and are not subject to probate.  If the owner of the policy is not the deceased, there will also not be any estate tax.

 7.   Retirement Plan/IRA/Annuity: You can designate beneficiary/ beneficiaries apart from your Wills and Trusts.  This is the best way to defer tax by stretching out the IRAs for the younger beneficiaries. 

8.   Real Estate Deed: Community Property Right of Survivorship – CPROS (for married people only) and Joint Tenancy Right of Survivorship – JTROS (for either married or unmarried people).    A word of caution: Do not have JTROS between the parent and a child.   The disadvantage is that if the child is to be sued the parents’ house can be lost along with all the other assets to his/her creditors.  A better way to do it will be through a beneficiary deed and name the children as heirs to the house. 

9.   Transfer on Death/Pay on Death: This is applicable to bank accounts, brokerage accounts and mutual funds and is an efficient form of distribution upon death.  Those assets will not be subject to probate. 

10. Do not name the estate/trust as the beneficiary of an IRA.  You can lose the option to stretch the IRA.  Specific language needs to be in the trust so it can be treated as the conduit to create an inherited IRA. 

11. Distribution of tangible properties can be listed on paper, signed and attached to the Will. 

12. There are other Complex Planned (or Split Interest) Gifts to Charity.  Some of them are:

•   Charitable remainder trust
•   Charitable lead trust
•   Charitable gift annuity    

 Disclaimer: The writer or PacWest Financial Management, Inc. is not responsible for the legality and accuracy of this article.  Readers should seek advice from their attorneys or financial advisors prior to taking any action with regard to the above mentioned. 

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“To control risk, one needs to keep a diversified portfolio,” Lau said.

Some of her favorites include HSBC Holdings (HBC), Johnson Controls (JCI) and Novo Nordisk (NVO).

Grace Lau, PacWest Financial Management, Phoenix

The year was 1949.  A young Chinese couple left China for Hong Kong because the communist took over the country.  The first of four children was born in 1950.  It was always the mother’s dream to send her children to America to attend college.  She was one year away from college graduation and could not finish because of the war.  The dad was in the same situation.  The mother also wanted her kids to be far away from China so they would not be at risk to communism.  It was a distant dream.  The family earned just enough to get by but how could the parents afford a college education for even one, no less than four children? 

In August of 1969, I arrived at University of Wisconsin Eau Claire to go to college here.  I was able to come because of a four-year tuition scholarship. My mother borrowed money to buy the plane ticket and to pay for one year of room and board.  I knew the family financial resources were greatly depleted because of those expenses.  The next sister would be graduating from high school one year later and she wanted to come to America too. 

Everyone on campus was so kind to me.  The university provided a host family.  I quickly met some of the professors in the biology department, including Dr. Jerry Foote and Dr. Roy Saigo and Mrs. Barbara Saigo.    They extended their hospitality by inviting me to their homes for the holidays, babysitting their children and attending functions organized by the Chinese students on campus.  I am so honored to have both the Footes and the Saigos here.  Thank you for your loving support during the years I was at Eau Claire.  You were my family in Wisconsin.  

Mrs. Dolly Rounds, a retired teacher in Eau Claire, also took special interest in this group of Hong Kong students.  She has now passed away and a few of my Hong Kong friends that attended Eau Claire and I have formed a scholarship fund in her honor.  The funds are for students to go abroad to learn culture of other countries because Mrs. Round had a strong interest of the international students. 

In the four years at Eau Claire, not only did I receive an excellent education, I also found abundant work. After settling in Thomas Hall upon arrival, I started looking for work on campus the  next day.  Without much trouble I was hired in the dish room right here in the Davis Center at an hourly rate of $1.15.  I was so happy to have a job. Along with the summer job at Wisconsin Dells I save up enough money and sent home $600 the next year so my sister Flora can also come to school here.  She won the international scholarship too and earned a PhD from Iowa State University after graduation from this university.  She has been working in the food industry and is a senior executive with Sara Lee in Chicago.  Because of her work schedule she cannot be here today. 

When I graduated from Eau Claire in May of 1973, I managed to earn enough to not only pay for the room and board for three of the four years but had a $1700 savings.  I think that was the beginning of my later career in money management. 

In the later years, two more siblings came to America and finished their post secondary education on the east coast.  My parents moved to America too.  Because of the generous scholarships Eau Claire gave me and my sister that changed the fortune of a family of six. The next generation has benefited also.  I cannot express enough gratitude towards University of Wisconsin, Eau Claire.  Of course it was more than money.  The school gave me a great education and everyone was also so kind, supportive and encouraging.

That support is still continuing today with three of my previous professors in attendance at the luncheon, after my graduation 38 years ago.  

Although I feel honored to be the recipient of the Presidential Award, the award is not about me. It is about giving me an opportunity to come back to Eau Claire to say thank you to the school and to my professors.    Without the help of the school I would not have been able to have a college education.  The Lau family would be in a different place on a different path.  A mother’s dream would have been left empty.  I feel very grateful towards the university and everyone that was in my life when I was here. After I left Eau Claire I continued the path of higher education and hard work and I helped others whenever I was given the opportunities. That is my effort in paying back for what I have received in this country.   It is also my intention to pay back the university in some way and I will be working towards that goal.

 Thank you!