Free Estate Planning info.
Planning your estate is easy... with a little help.
Here are a few frequently asked questions with their answers to help make it
a little easier.
I just moved to Arizona from out of state. Do
I need a new will?
No, so long as your out of state will was done
in compliance with the laws of the state in which
the will was executed. If your will is old you should
make certain that your wishes as to what is done
with your property are still the same. Arizona law
provides for some useful provisions such as personal
property gift provisions and self-proving will provisions
that might make an update worthwhile.
If I don't have a will, will the State of Arizona
get my property?
Probably not. If you don�t have a will the Statutes
of the State of Arizona provide that your assets
then pass to your spouse, children, grand children,
mother and father, brothers and sisters, or nieces
and nephews. However, a will allows you to provide
the exact amount of your estate any heir will receive.
What is probate?
It is the court-supervised process whereby a
deceased�s assets are used to pay his or her obligations
with the balance going to the heirs. Arizona has
adopted the Uniform Probate Code, which makes probates
easier, faster and less expensive than in most jurisdictions.
Why does it take so long to probate an estate?
The probate procedures in most states require
appraisals, a number of formal hearings and formalized
accounting procedures. Fortunately, Arizona probates
are governed by the uniform probate code. Appraisals
are seldom required, there is only one formal hearing
(and this is frequently waived) and accountings are
simple and straightforward. Most estates are completely
probated and distributions made in four to six months.
Partial distributions are frequently made earlier.
In Arizona the probate process is substantially less
painful than in most states. However, if you own
property in another state it can be very cumbersome.
See your attorney. You may be a candidate for a revocable
trust.
Does having a will help to avoid a probate of
my estate when I die?
No. A will simply directs where your assets should
go among your heirs and who should be in charge of
the distribution.
Are there things I can do now to avoid the probate
process?
Yes. The most common method used to avoid probate
is the utilization of a living trust.
Do living trusts avoid the probate process?
They most certainly do. Assets in the trust are
transferred by the Successor Trustee without supervision
by a probate court. It is important that you have
considerable confidence in your appointed Successor
Trustee.
Shouldn't everyone have a living trust?
Not necessarily. Persons still active in business
may find a trust inconvenient. Some will benefit
from the protection from creditors offered by probate.
Others will benefit from the supervision that a court
provides for the distribution of your estate in probate.
Trusts may be particularly appropriate for widows
or widowers, if you own real property in another
state, in second marriage situations, and when a
couple�s assets exceeds the federal estate tax exemption.
In 1999 that exemption is $650,000 but the exemption
increases gradually so that in 2006 the exemption
will be $1,000,000.
I have been invited to a seminar on living trusts.
Is it worth the time and effort to go?
Certainly. You may learn something, and the coffee
and cookies are usually free. But remember the primary
purpose of the "seminar" is not to educate
you, but to sell you a living trust. Living
trusts in their present form have been in existence
for at least 60 years. In recent years they have
become the hot new commodity to solve the estate
problems of a generally unsuspecting public. Trusts
solve some problems and create others. Do not let
anyone tell you differently. If you need a trust
it should be prepared specifically for you after
a number of conferences with your attorney who should
go over with you and explain each and every provision
in the trust and related documents.
What are the tax ramifications on my estate when
I die?
Unless your estate exceeds the federal estate
tax exemption, there will be no federal or estate
taxes on your estate. Your personal representative
or successor trustee is of course responsible for
paying income taxes on your income earned during
the last year of your life. If your estate exceeds
the federal estate tax exemption, your estate may
have both federal and state taxes to pay and these
taxes can be quite confiscatory. There are some notable
deductions, particularly; any bequest to your surviving
spouse will never be taxed. In most cases, with a
little prior planning, estate taxes can be avoided
or reduced. A consultation with your attorney will
likely save your estate a substantial sum of money.
How much should I expect to pay for a Will or
a Living Trust?
Simple wills, that is, a will that makes a direct
distribution of your property to an heir or heirs,
should cost about $150 to $175 for a husband and
wife. Complex wills with trusts and tax provisions
are likely to cost a couple of hundred dollars more.
Likewise, a simple trust should cost between $650
and $750, but trusts with provisions to escape or
plan for tax provisions will generally cost a couple
of hundred dollars more.
All trusts should include a pourover will, a durable
power of attorney with medical provisions, a living
will, certificates of trust, and other related documents.
The attorney should assist you with getting all of
your assets, including real property, into the trust,
and make certain that you fully understand and are
comfortable with the trust that you have created.
How necessary is a Power of Attorney especially
in your senior years?
A Durable Power of Attorney is probably
the most important legal document that any adult,
regardless of age, should have. This document designates
someone of your choice to handle your affairs in
the event you become incapacitated. It is effective
only on your incapacity and when you have recovered
it ceases to be operative. The person you designated
operates on your behalf in a fiduciary capacity,
and is accountable for every action taken. This simple
document avoids costly guardian or conservator proceedings
and is a must for every person regardless of the
size of your estate. |