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Probate
Probate is a standard legal process which occurs after someone has passed away. It is necessary whether a person does or does not have a will…
Wills
Under Arizona law, a person need not have his or her will witnessed, although it is best to have the will signed in the presence of witnesses and notarized…
Trusts
The first question to answer in considering the benefit of a trust based estate plan is why incur the added cost of such a plan. The first important point to…
Estate Planning
Whether you are planning for the future or taking care of a situation now, having an experienced attorney on your team will reduce the stress, clarify the options, and ensure the best possible outcome. Estate planning is about making sure you and your family are taken care of for the future.
At the Law Firm of Bert Moll, we help you bring the future into the present so you can do something about it now.
You can decide now who should be the heirs of your accumulated property and assets and the terms under which your heirs will receive distributions from your estate. Save your loved ones the heartache and potential conflict of deciding who gets what of your personal property and heirlooms. You deserve to decide what happens to your personal items regardless of how much you have to give away.
With proper planning, your loved ones can avoid the expense of a “living probate” should you become incapacitated for any reason during your lifetime or the expense of a probate proceeding after your death. Many people do not even give consideration to making sure their personal affairs and assets are managed during a period of incapacitation. If you become incapacitated, who will make sure your bills are paid and who will look after your children? If you operate a business, who will manage it in your absence? If you do not have proper planning in place, you are essentially ensuring the court will become involved in your personal and business affairs. We refer to such court actions during your lifetime as a “living probate.”
A probate proceeding is also often needed after death to ensure proper distribution of the decedent’s property and personal items. You can avoid the expense of a probate by having the Law Firm of Bert Moll prepare a Revocable Living Trust package for you and your spouse or significant other. You know how expensive a probate proceeding can be if you or someone you know has been involved in such a proceeding. It’s not only a drain on the estate being probated; it’s a drain on a one’s emotions at a time when the grief over losing a loved one is still very fresh. Having an experienced estate planning attorney prepare a living trust plan for you is the solution to an easy, stress-free process. It will ensure your loved ones avoid the emotional toll and expense of a probate proceeding after your death. Contact us today to find out how we can help you.
Probate
Probate is a standard legal process which occurs after someone has passed away. It is necessary whether a person has a will or does not have a will. After a death, any property and personal items of the deceased must be transferred to a new owner. If the decedent had a Last Will and Testament in place, the person designated in the will as the executor of the estate manages the assets of the estate during the probate and ensures the assets are distributed pursuant to the testator’s instructions in the will. If the decedent did not leave behind a will, the court must assign someone to act as the executor (referred to as the administrator). The administrator is usually the closest relative that’s capable of handling the process. They then decide what happens to the deceased’s property and personal items. Appraising property and items and deciding who will take ownership, is a tedious process that requires a lot of paperwork and many hours of involvement. Having a probate attorney is crucial to a smooth and successful probate process. Having a living trust plan in place can help tremendously with the probate process and can avoid a probate altogether if prepared properly. Call or contact us today if you need our help with a probate or if you are looking to plan for the future.
Wills & Trusts
Having a will or revocable living trust is vital to ensure that your family and loved ones are taken care of after you pass. We typically refer to estate plans that distribute assets pursuant to a will as a “Will based estate plan” whereas we refer to estate plans that distribute assets pursuant to a trust as a “Trust based estate plan”. Regardless of which method you use to distribute your assets, having legally sufficient documents in place that name your beneficiaries is the only way to ensure your assets are passed on to your loved ones in the way you wish. Whether a will based estate plan or a trust based estate plan, at The Law Firm of Bert Moll, your plan will include several important documents:
- Durable Power of Attorney
- Medical & Mental Health Power of Attorney
- Living Will
- HIPAA authorization
- Personal Property Memorandum
Trust based plans include other important legal documents. If you have children, your estate plan will also include a Temporary Guardianship Power of Attorney. While both will based estate plans and trust based estate plans both allow the naming of beneficiaries and include the foregoing documents as part of their individual plans, the features and security they offer greatly differ. For example, a will offers very limited choices as to how your assets will be distributed upon your death. In addition, as noted on the estate planning page of this website, a will based plan may not be sufficient to avoid a “living probate” if you become incapacitated. A discussion about will based plans and trust based plans can be accessed by clicking on the links below.
Wills
Under Arizona law, a person need not have his or her will witnessed, although it is best to have the will signed in the presence of witnesses and notarized at the time of signing. Arizona permits three types of wills: 1) holographic wills, which does not require witnessing but must be in the testator’s handwriting; 2) attested wills, which is a writing signed by the testator and witnessed by at least two witnesses; and 3) self-proved wills, which is a writing signed by both the testator and two witnesses in the presence of a notary. Self-proved wills carry the greatest mark of authenticity and permit the probate of the will in an informal proceeding, whereas holographic wills and attested wills are susceptible to attack and may require the expense of a formal probate. Obviously, a formal probate is more expensive than an informal probate, so having a self-proved will in place is best.
At its most basic design, a will based plan allows one to name the executor or as the person is titled in Arizona, “Personal Representative”, who will ensure the testator’s estate is distributed in accordance with his or her wishes. Not all assets are “probated” assets, meaning some assets pass outside of probate. For example, a person’s life insurance policies or retirement plans generally are distributed directly to the beneficiary who the owner of the insurance policy and retirement plan designated at the time the policy and plan was created. An important planning point is to be sure your insurance policy and retirement plan beneficiary designations are up to date. If you have been through a divorce and have not yet updated your beneficiary designations, it is imperative you do so immediately. Your will may have no bearing upon who gets the payout from your insurance policy or retirement plan if you have failed to update your beneficiary designations.
The cost of a will based estate plan will differ based upon the complexity of its features. For example, although a “Revocable Living Trust” allows more flexibility in drafting and the features it offers relative to providing for your children, a will based estate plan may incorporate what is referred to as a “Testamentary Trust” if the Testator has children. Unlike a Revocable Living Trust, a “Testamentary Trust” is not effective until at death. Parents of minor children who choose a will based estate plan will want to have a Testamentary Trust incorporated into their will to provide for their children and ensure the children do not become the subject of a guardianship and conservatorship in court. We can answer your questions more fully regarding the benefits of a “Testamentary Trust” and a “Revocable Living Trust” if you schedule a consultation with us
Trust Based Estate Plans
The first question to answer in considering the benefit of a trust based estate plan is why incur the added cost of such a plan. The first important point to keep in mind is that an estate will require a probate if the value of the estate exceeds $50,000. When one considers the overall cost a person’s estate will incur to have a will based estate plan prepared and to incur the cost of a probate at death compared to the cost of a trust-based estate plan, the difference in cost becomes minimal. Consider that a will based estate plan will require the cost of the plan at the time of drafting and then require legal fees in the probate of the will upon death. While there are legal mechanisms available that will allow a person to avoid probate, there is no more effective estate planning strategy than to have a trust-based estate plan in place. For example, a person may choose to place an adult child as a joint owner on a bank account, but what would happen if both the owner and the adult child were to die in a tragic accident? Now there is no one to take ownership of the bank account or any other assets the parent owns at the time of death without incurring the cost of the probate.
There are other significant benefits to having a trust-based estate plans when there are minor children involved or in the instance of second marriages. A trust-based estate plan will allow you to direct how your assets will be distributed to your children during periods of incapacity during your lifetime and upon your death. Do you want your assets to be distributed to your children based on a conservative model or do you wish to lavish your assets upon your children without consideration for their need to become mature and productive citizens? In most cases, parents want their children to learn the importance of work ethic and responsible use of their financial resources. A trust-based estate plan will allow you to name a trustee he will oversee distribution of the assets of your estate to the children during periods of incapacity or upon your death if the children are still at an age where they have not achieved full maturity in knowing how to responsibly manage their financial resources. You can choose, for example, to stage your distributions to your children when they reach certain age brackets. You may wish for your trustee to manage the assets of your children until they reach 22, at which time you may wish for them to be a joint trustee of their inherited funds and assets. You may then wish for your children to become their own trustee at the age of 25 and have the opportunity to withdraw 30% of the inherited funds and assets. At age 28 you may then allow them to take an additional 30% for a total of 60% of the inherited funds and assets. At age 30, you may wish to give them the ability to withdraw 100% of the inherited funds and assets. You decide under what terms your children are permitted to receive the inherited funds and assets.
Another advantage to a trust-based estate plan concerns the cost of your children’s education. With a will based estate plan, the children will usually receive an equal distribution from your estate. If there are four children, each child will receive 25% of the value of your estate. As discussed in the will based estate plan discussion of this website, you will ensure court involvement in a guardianship and conservatorship for your children if they become heirs of your estate due to your untimely death and you do not have either a testamentary trust or a living trust in place at the time of your death. A trust-based estate plan allows you the flexibility of delaying distribution of your estate to the children until the youngest child has completed college. An inequity will result if your estate is distributed to your children at the time of your death if several of your children have completed college and there are other children who have not yet completed high school or college. We can create what is referred to as a “common pot trust” inside your trust-based plan to ensure this inequity will not result. Your estate will remain inside the “common pot trust” and distributions will be made to your children based upon their health, education, maintenance, and support needs until the youngest child is either completed college or has had an opportunity to do so. You decide the age at which the youngest child should be expected to have completed college as the trigger date for your trustee to equally distribute the balance of the funds and assets to all of the children.
Yet another important feature of a trust-based estate plan concerns the potential pitfalls people can encounter in second marriages. If there are children on both sides of the marriage, in most cases, each of the parents will want the bounty of their affections, i.e., his or her children, to inherit whatever assets he or she brought into the marriage. If one spouse should predecease the other, the surviving spouse would then have complete control over deciding who inherits the assets at the time of the surviving spouse’s death under a will based plan. There are several ways of addressing this problem using a trust-based plan. One way is to have each spouse establish their own separate trusts. Another way is to created joint living trust and incorporate what is referred to as a Q-tip trust in the joint trust which allows the surviving spouse to live off of the separate property assets of the deceased spouse until the surviving spouse’s death. Upon the surviving spouse’s death, the Q-tip trust provision ensures the children from the first to die spouse will inherit the remaining balance of the estate. This strategy is also helpful in anticipating the possibility that the surviving spouse could remarry.
You may also wish to protect any inheritance you give to a child or grandchild by use of a prenuptial provision in your trust-based estate plan. For example, if you were to predecease your spouse, you may wish to require that your spouse enter into a prenuptial before remarrying. You may also want to require a child or grandchild enter into a prenuptial before marrying in order to ensure that his or her inheritance remains intact in the event of a divorce.
Trust-based estate plans also afford the peace of mind of knowing that if you were to become incapacitated for any reason, your named trustee can easily and quickly step into your shoes to manage your personal and business affairs. You decide the powers your trustee will possess regarding the management of your finances and personal affairs. You can make the trustee’s powers broad or specific for the particular task. Trust-based estate plans often work in conjunction with a person’s business plan. In fact, if you are a business owner, it is always best to have a buy/sell agreement in place that coincides with your trust-based estate plan.