It pays to be prepared...
We all know we are going to pass away someday, but none of us know when "someday" is. Most of us will also leave some people behind: family, loved ones, friends. Most of us want to take care of those people, and to make our passing as painless as possible for the people we care most about. The law provides a way to do that: estate planning.
An estate plan tells the world our final wishes. We use them to give property to people we care about, passing cherished legacies along to the next generation. We use them to make sure our children are cared for by someone we can trust to look out for their welfare. We use them to make sure we are cared for in the event we are incapacitated, and to make sure that our final wishes about our bodies are respected. Estate plans can do all of these things and more.
If you want to be prepared, and want to learn all the things an estate plan can do for you, you should call us today!
What is in an estate plan?
Most estate plans, at a minimum, contain a Will (sometimes called a Last Will and Testament). In a Will you are "hiring" someone - called a Personal Representative - to do one last job for you. The bulk of that job involves making sure your property goes where it is supposed to go. Your Will gives your Personal Representative instructions telling them how to distribute your property (it does other things too, but that is one of the most important things).
Good estate plans also often include financial and medical Powers of Attorney. You use these documents to "hire" someone to make medical and financial choices for you if you can't make those choices yourself. The Power of Attorney document tells them what kind of choices they are allowed to make. A Living Will tells them about choices you have made about your end-of-life care, which they communicate to others.
If those sound like things you could use, you should call us today!
Our thoughts on trusts:
Aren't trusts part of every estate plan? Well, no, not exactly. Changes to the way we tax estates have made trusts a lot less mandatory for most people.
That isn't to say that trusts are useless - far from it! - but they don't have a place in every estate plan. The people getting a trust need to understand how to use it, how to fund it, and what kinds of responsibilities the trustees will have. If you don't know how to use your trust, you are paying a lot of money for something that won't do you any good. A trust that isn't a good fit with your estate plan might even end up causing more harm than good.
We will discuss whether a trust should be a part of your estate plan during our consultation, but it is important to know upfront that not everyone needs them.
Someone passed away...
We all pass away eventually. When that happens, it is up to the people that we left behind to make sure our last wishes are honored. How exactly that happens depends on whether the person who passed away left a will (or trust) behind and what their property is worth.
People who did not own a lot of property when they passed can sometimes take advantage of "small estate" procedures. This lets their loved ones administer their estate simply, quickly, and cheaply.
People who owned a decent amount of property and didn't have a will or a trust go through something called "intestate succession." That involves the state trying to guess how they would want their property distributed, and distributing it accordingly.
People who owned a decent amount of property but did have a will go through probate, which can be informal or formal, depending on whether everyone gets along. If people don't get along a will contest might happen as people fight to determine who is entitled to get what and what the person who passed away's last wishes really were.
People can sometimes "avoid probate" by holding their assets is certain ways, but this isn't a foolproof way to stay out of court. For example, a trustee who does a bad job administering a trust might still find themselves in court.
Avoiding court battles...
Most people don't want their friends, family, and loved ones to fight vicious, bitter battles in court over inheritances. The best way to avoid these kinds of battles is with good estate planning. There is no way to guarantee these kinds of battles won't happen, but a good estate plan helps to lower the risk of it happening.
There will only be so much money left in an estate when a person passes away. Fighting over that money means everyone recovers less of it. Sometimes, people fight so hard over it that there is nothing left over when they "win." For this reason, it can sometimes be a good idea to try to settle these kinds of cases instead of fighting to the bitter end. Probate mediation is rapidly becoming more common for this reason.
It can also be hard to prove what a person who isn't around anymore wanted. Often, these kinds of cases involve (expensive) expert witnesses testifying about whether the deceased person had the ability to understand the Will they were making, or whether someone they gave something to was unduly influencing them. Things would be easier if the deceased person was still around to testify, but that just isn't possible in these kinds of cases.
For all these reasons, it is important not to enter estate litigation lightly and it is important to make sure you are doing it for the right reasons. If you think you might need to litigate an estate case, you should call us today so we can discuss that with you!
Our thoughts on probate:
A lot of people seem to be worried about probate. They have heard that probate is a horrible, nasty thing, and that they should avoid it at all costs.
A lot of people who have been told they should avoid probate come from states where probate attorneys charge a percentage of the estate for their services. In Arizona, almost all probate attorneys charge by the hour, so going through a probate isn't anywhere near as costly. Sometimes, people who have been told to avoid probate are being told that because someone wants to sell them a trust.
Probate isn't a bad or evil thing. It is just a court process we use to make sure a person's estate is properly administered. Avoiding it can sometimes be beneficial, but it can also sometimes cause more problems than it is worth.