Legal Question in Wills and Trusts in Arizona

Re: trust fund

When a person is incapacitated, as you describe him to be, he cannot establish a trust or transfer property or take any other action which requires a person to be legally capable.

There is no difference in the tax consequences whether or not a trust was created, and any action to make gifts would be for nothing, because any action taken at this time would be "in contemplation of death."

Upon the death of the brother, the power of attorney ceases to be of any force or effect. The brother's assets will probably be required to be probated and will be distributed ultimately to your husband at the end of the probate.

Re: trust fund

To be technically correct, the power of attorney "lapses" upon death, and your husband has no authority under a power of attorney upon his brother's death. It does not become "mute."

There are other options, but these might depend upon the wording of the power of attorney. Since this estate was not set up to avoid probate, I presume it was a do-it-yourself project. Estate planning can be very straightforward when done by a professional who knows what he or she is doing. It can have many pitfalls for the uninitiated.

See an estate attorney, and present all will, power of attorney and other estate documents, including deeds to any real estate. Only after reviewing all facts can a proper analysis be done.

We offer free, no obligation initial consultations. There may be other alternatives to attempting to establish a trust. Depending upon the size of the estate, probate may not be necessary. There may also be other issues you need to address with the care and finances of the incapacitated person.

Best regards,

James D. Jenkins