Posts tagged ‘probate’

December 17, 2012

Now You Can Transfer Vehicles Upon Death Without Probate

The Arizona Legislature recently made it a little easier for residents to transfer ownership of their vehicles upon their death, regardless of the value of the vehicle.  Many people in the process of planning their Estate succession want to avoid “Probate” if at all possible.  Unfortunately, many individuals have been given the wrong impression that “going through Probate” means that the government is going to take a large portion of their hard-earned assets in taxes and fees and that it will be months, if not years, before assets are available to the beneficiaries of the Estate.  In reality, “Probate” means “to prove” the Will, and it is not an excessively expensive nor necessarily lengthy process.

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August 5, 2011

Credit Card Debt Collection upon the Death of a Loved One

Some people have a “zero balance” on their credit cards.  Many people, on the other hand, carry at least some debt on their credit cards and pay the monthly charges which may exist at the end of each monthly cycle.  Whether you are a person in the former category or a person in the latter category, everyone should know what happens to existing credit card debt when someone passes away as credit card companies may attempt to collect on the debt of a loved one who has recently passed away.

Generally, credit card debt does not go away when a person dies.  Family members, however, are most often not directly responsible for paying an outstanding balance that may exist.  Instead, the remaining debt is paid out of the decedent’s estate.  Depending on the amount of outstanding debt, it may be helpful to consider how credit card debt will be handled when creating an estate plan.

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November 23, 2010

Do I Need a Trust?

Many people contact our law firm to ask our opinion as to whether they need to have a Trust? They may have friends or family members that have established a Trust or they may have received an advertisement from a financial planner or attorney warning them that if they do not establish a Trust they may lose their assets by having to go “through Probate”. The advertisements imply that your failure to put your assets in a Trust will allow the State to take a large portion of your estate. The truth is, for most residents of Arizona, they do not need a Trust, and establishing a Trust may not save them any money in the long run.

There are certain situations where a Trust is indeed advisable, and in some cases, very important to establish. If you are a married couple and the value of your estate is likely to exceed $1 million there may be significant tax advantages to establishing a Trust since there is a chance that the Federal Estate Tax may make apply to Estates starting at $1 million as of January 1, 2011 (unless Congress acts and the President signs a bill raising the limits before the New Year.) A Trust can double the exemption amount available to married couples resulting in significant tax savings. Another circumstance that may warrant a Trust is when you have a blended family and each spouse wants to make sure that certain of their assets are left to their respective children. A third circumstance where a Trust is helpful is when a person owns properties or other assets located in multiple states and he or she wishes to avoid multiple probate on each state where the assets are located.

One common fallacy that many clients have is the belief that, by placing assets in a Trust, they protect those assets from creditor’s claims. Since most people establishing Trusts are establishing “revocable trusts”, i.e., Trusts that they can remove assets from during their lifetime, the assets in such a Trust are subject to their creditor’s claims. Assets can be placed in an “irrevocable trust” which may protect those assets from creditor’s claims, but the assets may not be accessible to the party establishing the Trust once they have been placed in the Trust.

So, if you are like a majority of Arizona residents that do not have assets worth in excess of $1 million, and if you do not feel it is necessary to place assets in a Trust in order to assure they are left to children of a prior marriage, or you are not concerned about probate in multiple states, you most likely do not need a Trust.  A Trust can be a great estate planning tool that will allow the easy transfer of assets to your intended heirs (your Trust beneficiaries) in a timely and private manner (Probate proceedings are public records that can be viewed by the general public whereas Trusts are not).

If you are undergoing financial stress during these difficult economic times and do not have a lot of spare cash, you may want to hold off on setting up a Trust. However, we do strongly recommend that you have a Will prepared, a document that costs you a fraction of the cost of a Trust! (See article on why you need a will on this website) If you have any questions about the need to have a Trust after reading this article feel free to give our office a call.