Posts tagged ‘will’

August 9, 2013

Time to Review Your Estate Plan

An estate plan represents a snapshot of someone’s current life. Though we draft our estate documents to be amenable to life changes, one should still review his estate plan every year or so to see if the documents reflect his or her wishes.

At our firm, the wills we draft are general, and more often than not cover one’s entire estate in lieu of referencing specific assets. Although the estate plan may be generalized, many life events warrant changes to one’s documents. Moving between states, marriage, divorce, estrangement, and death of loved ones all represent appropriate reasons to update an estate plan.

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April 17, 2013

Informal vs. Formal Probate of a Will

When a person dies and leaves a Will, a legal proceeding called “Probate” is required to transfer ownership from the person who died (Decedent) to the people named in the Will (Devisees).  There are two main proceedings for Probate of a will.  Below are a few differences.

Informal vs. Formal Probate of a Will

  1. FORMAL Probate is litigation; Informal Probate is an administrative proceeding.  If there is any dispute or contest regarding the will or the appointment of a personal representative in Informal Probate, then the case becomes Formal Probate.
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March 15, 2012

Why Every Unmarried Person Should Have a Will

Wills offer a number of benefits for protecting one’s interests after his or her passing. In addition to appointing a personal representative, assigning custody/guardianship for minor children, setting up testamentary trusts, and more, one of the most important benefits is deciding the distribution of assets upon one’s death. Whether you’re in a life-long relationship or a single person, if you are unmarried you should have a will.

Unmarried couples often get the short end of the stick when it comes to inheritance rights. In Arizona, a community property state, spouses are entitled certain rights upon the deceased spouse’s death. Unmarried parties, however, are not automatically granted the ability to inherit their partners’ assets. By law, upon a person’s passing, his or her next of kin has the right to inherit any property left in the deceased party’s estate unless otherwise stated in a properly executed will. Therefore, even if a couple has been together for decades, the partner will not inherit property from the deceased party’s estate unless expressly written in a will. In fact, an estranged family member could inherit a person’s estate instead of a life-long partner under intestacy laws.

To protect one’s life partner, whether the couple is an unmarried heterosexual couple, a homosexual couple, life-long friends, or virtually any other scenario, a will must be formally executed prior to passing. In our country, even if a gay couple is married in a state that currently recognizes gay marriages, if that couple moves to Arizona one’s spouse is not necessarily granted the same rights of inheritance as he or she would receive in the state that recognizes the marriage. For this reason, if a gay couple moves to Arizona, and the parties wish to leave all assets to each other, it is imperative that those parties execute a will outlining their wishes.

Even single people not involved in a long-term relationship should execute a will. If a person does not execute a will, the next of kin has the right to inherit under state law. If the deceased person has a child or children, the estate would pass to the children. Absent a will, however, the guardian or custodial parent of those children may be responsible for the assets left to the children. Our simple wills allow you to set up a testamentary trust to make sure the minor child does not receive a disbursement of assets (except for education or other necessities) until the age of your choosing. You may also appoint a trustee which could be anyone from a trusted friend to a close family member who would act in the children’s best interests, to manage those funds.

If you don’t have children, you should execute a will to allow your estate to pass to a family member, friend(s), or charity. If, upon your passing, your next-of-kin are unable to be located, your estate could be escheated to the state. If you assets are escheated to the state, the state basically collects your assets and keeps it for its own spending. By preparing a will, you can decide instead to make sure your hard-earned assets pass to a loved one or a charity of your choosing.

If you have questions about why you need a will, or would like to set up a consultation to prepare a will or any other estate planning documents, don’t hesitate to call The Carroll Law Firm at (623)551-9366.

January 3, 2011

Choosing a Fiduciary

We live in a time when advances in medical care have greatly enhanced the life expectancy of the average American.  As more and more of us live into our eighties and beyond, the likelihood that we will need the assistance of someone to help us with our healthcare and financial decisions increases dramatically.  Too often individuals do not plan in advance how they want their affairs handled in the event they are incapable of managing on their own, and the result may be that a Court ends up appointing a third party fiduciary who is given the legal authority to determine what is in the best interest of the incapacitated individual.  What that means is that, if you fail to plan properly, someone that you do not know may have the power to move you from your home to a nursing home or other facility, spend your entire financial resources on what they deem is in your best interest, and leaving you powerless to determine your own healthcare and your own expenditures.

By definition, a fiduciary is someone who has undertaken to act on behalf of another in a particular matter in circumstances that give rise to a relationship of trust and confidence.  For the past year, the Arizona Republic has run a series of articles detailing abuses of the supposed “trust relationship” between court appointed fiduciaries and the individual they are appointed to represent.  The articles have detailed the “cozy relationship” between attorneys, healthcare providers, private fiduciaries, and facilities that care for the physically and/or mentally incapacitated.  Although in many cases the appointment of a fiduciary is necessary, the appointment of a third party that is not a family member can become an extremely expensive process.  The best way to avoid negative consequences associated with the appointment of a third party fiduciary is to execute the proper legal documents including Business Power of Attorney, Healthcare Power of Attorney, a Will, and in many cases a Trust.  These documents allow you to name the person and alternate that you feel would best manage your financial and healthcare needs.  You can set limitations and dictate parameters to ensure your wishes are carried out.

We have clients coming in almost every week that have an elderly relative who has reached a point where they are incapable of managing their own affairs.  In many instances the relative is not aware that they are “slipping”, i.e., experiencing early signs of dimentia.  If that individual has not executed the recommended documents while they were competent, it may be necessary to file a legal action to have a conservator appointed.  That process can be expensive and time consuming, especially if the family members disagree as to who should be “in charge”.  The key to protect your interests and assets is to make the necessary decisions before you reach a point that someone else has to make those decisions for you.  Just give careful thought as to whom you want to be your fiduciary since you are literally putting your life in his or her hands.

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.