ESTATE PLANNING FAQ’s
FREQUENTLY ASKED QUESTIONS ANSWERED BY MY AZ LAWYERS
ANSWER:
Estate planning is the process of creating legal documents that indicate how you would like your assets to be transferred when you die, and how you want certain decisions made (or who should be in charge of making them) if you become incapacitated. Depending on your estate, you may want to use some combination of a will, trusts, powers of attorney, and advanced health care directives to make sure all of your wishes are clearly communicated. Estate planning can make sure the most of what you own goes to your loved ones, rather than being eaten away by taxes and attorney’s fees. Each state has its own requirements for estate plans, so you should hire an Arizona estate planning attorney to make sure that your estate plan is properly executed.
ANSWER:
Don’t let the name fool you- estate planning is for anyone over the age of 18 and of sound mind. Even if you aren’t wealthy, you can take advantage of benefits like tax and probate avoidance through estate planning. Estate planning is also the only way to leave money to charity when you die. You can use your will to designate who should be the executor of your estate, or the person responsible for moving through probate. If you have minor children, it can also designate who should be their legal guardian in the event of your passing. Regardless of how much money you have, you can use documents like a power of attorney and living will to indicate how you would like certain decisions to be made if you ever become legally incapacitated.
ANSWER:
The best way to find out if your parents have an estate plan is simply by asking them. However, because thinking about your own passing can be painful and uncomfortable, it’s best to approach this topic with consideration. If your parents haven’t created an estate plan yet, you can explain the benefits of having one and the disadvantages of passing away without one. If they already have planned their estates, you can discuss the plan so there is no confusion when they pass away. Your parents may also find it easier if you help them find a lawyer to plan their estates. For a free consultation with an experienced Arizona estate planning lawyer, call 480-833-8000 or use our online form to request your free consultation.
ANSWER:
If your parents pass away without a valid estate plan in place, their belongings will pass according to your state’s intestacy laws. In Arizona, that usually means the estate will go to some combination of the decedent’s surviving spouse and surviving descendants, or children, grandchildren, etc. If none of these are available, the estate will then go to the decedent’s surviving parents and their descendants. Depending on the size of your parents’ estates, intestate succession could take much longer in probate and carry far more tax liability than an estate that has been strategically planned.
ANSWER:
A trust allows you to transfer money or property to someone you love without going through probate. You can transfer the asset during your lifetime with a living trust, or after you pass away. Using a trust can also reduce the amount of taxes that an asset would incur as compared to transfer through a will or intestate succession. Trusts also provide you the opportunity to specify how you would like your beneficiaries to use their inheritances. For example, you can use a trust to help a disabled family member out with medical expenses, or to contribute to your children’s educational expenses.
ANSWER:
You will have many responsibilities surrounding an estate if you have been named its executor. Your first task will be to file the will and death certificate with the court in the county in which the decedent resided. Next, you should notify the decedent’s bank and creditors, as well as the Social Security Administration, of their passing. If applicable, you can file a small estate affidavit for exemption from the probate process. You should create a list of all of the decedent’s assets and debts and file that inventory with the court. You may need to set up a bank account for the decedent’s incoming payments and to pay debts, or even represent the estate in court. You will also need to make sure the estate is maintained until it has been transferred to the intended beneficiaries. Once all taxes and debts have been paid, you will distribute the estate according to the will. Finally, it will be your responsibility to deal with any remaining assets.
ANSWER:
A will is a legal document that allows you to state how you want several matters to be addressed upon your death. You probably already know that your will can be used to distribute your loved ones and any charitable organizations you support when you pass away. A will is also the instrument you will use to designate who should be the executor of your estate. Your estate executor will have several responsibilities and your choice could impact how long it will take for your estate to pass through probate. If your children are under 18 years old, you should also list who you would like to be their legal guardian if you pass away before they reach adulthood.
ANSWER:
Some medical conditions take away your ability to make decisions for yourself, like a coma or a degenerative cognitive disease like Alzheimer’s. But there are some types of medical treatments you can consent to or refuse in advance with a living will. For example, you can decide whether or not you would like to be kept alive on life support, receive CPR and dialysis, and more. You can also designate whether or not you would like to donate your body, organs, and tissue. A living will shouldn’t be confused with a health care power or attorney, or health care proxy. This document gives someone of your choosing the authority to make these types of decisions on your behalf if you become incapacitated.
ANSWER:
A will and a living will actually serve very different purposes, so you can use both when creating your estate plan. Using a will doesn’t disqualify you from also using a living will, trust, power of attorney, and other estate planning documents that can help you avoid taxes and probate. Your estate planning attorney can help you decide how much of your estate to transfer through a will, and which terms to include in your living will.
ANSWER:
First of all, your assets will pass according to Arizona’s intestacy laws. This means that loved ones who aren’t legally related to you won’t receive anything, nor any charitable organizations that you wish to endow. The state will need to choose who serves as your estate’s executor, and it could even end up being a complete stranger or one of your creditors. This could also possibly leave the state in charge of designating a legal guardian for your children if they are still minors when you pass away.
ANSWER:
Probate is the legal process of validating a will, paying taxes and debts of the estate, and distributing the estate amongst the beneficiaries. The estate executor will be largely responsible for making sure the probate process is completed. Probate can be a long and expensive process, especially if anyone disputes the will’s terms or validity. Claims from creditors can also extend the process and deplete the estate. There will be court costs and fees to pay, as well as hourly probate attorney’s fees. Another reason many people want to avoid probate is because the process is public, and anyone can look up documents regarding the estate. Using trusts and other estate planning tools can not only speed up when the beneficiaries receive the estate and reduce taxes and fees deducted from it, but also protect the privacy of everyone involved.
ANSWER:
In Arizona, small estates- less than $75,000 in personal property and $100,000 in real property- can use an affidavit to avoid the probate process. Assets that are transferred through trusts don’t need to go through the probate process either. An attorney can help you determine which types of legal instruments would be best to reduce or eliminate probate after your death.
ANSWER:
A living trust can be used to distribute assets from your estate before you pass away. These trusts are also called revocable living trusts because they can be cancelled as long as you, the settlor, are of sound mind. You can also decide who will take over the role of trustee after you pass away.
ANSWER:
Creating a trust doesn’t have to mean that you are creating a notoriously spoiled “trust fund baby.” You can use a trust to help protect your family members after divorce and remarriage to a new spouse. You can also use a trust to provide for a loved one’s special medical or educational needs. Trusts can also be used to protect the estate’s transfer to a spouse after death. Clearly, you don’t need to be rich for any of these to be useful to you.
ANSWER:
A durable power of attorney serves a different purpose than a living trust. You can use a durable power of attorney to give someone you trust the right to make important decisions for you if you ever lose the mental capacity to do so for yourself. The person you designate, or your agent, can buy and sell property, give gifts, pay taxes and bills, sign contracts, and more on your behalf. A power of attorney is not used to transfer your estate like a living trust. If you wish to achieve both of these goals, you will need to use both types of documents.
ANSWER:
There is nothing preventing you from using both. Even if you transfer almost all of your estate through trusts, you should still use your will to designate an executor for your estate and a legal guardian for your minor children. Just how much should be transferred through each will depend on your specific circumstances. To discuss your situation in detail with one of our experienced Arizona estate planning lawyers, call or use our online form to request your free consultation today.
