Wachtel, Biehn & Malm - Publications

Publications - Estate Planning FAQ

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.