My goal of this article is to help you take steps to plan your estate.
What does it mean to plan your estate?
Before directly answering that question, I must state that estate planning is not only for the wealthy. We’re not only talking about managing assets. We’re also planning decision making when we cannot make decisions. There are situations where people temporarily lose capacity (i.e. surgery) or when we need care for a longer term. We may also take a trip out of the country and need someone to manage things while we’re gone.
Furthermore, there’s also the issue of bodily disposition. You need to make your wishes known — whether you want to be cremated or buried — and it is a good idea to have this all established beforehand.
However, probably the most important reason to plan your estate is a peaceful transition for those you leave behind. You don’t want your legacy tarnished. You want people to remember the good stuff about you, not to be distracted with the other stuff that can get in the way of that.
Why is it important to create a Will?
One answer I’ve often heard is so that the state (government) will not get anything. In Arizona, that is very unlikely because of the intestacy statute leaves to second cousins. More than likely, someone will get your stuff. However, it tarnishes your legacy if the wrong people get your stuff. For example, I’ve seen it where distant second cousins who are adopted get stuff that would have likely gone to either a nonprofit or friends, neither of which inherit outside of a Will, Trust, Beneficiary Deed, or similar instrument.
Your legacy — what your life means when you die — can be marred or tarnished when you fail to plan. It can become an unnecessary stain or unwanted expression at the end. You didn’t want your life to say such a thing. You wanted it to say something else. That can happen when people don’t like taking a moment to do a little planning to prevent it.
The good news about planning is that you’ll feel a great peace after.
You do a Will so that your property or interest in property goes to those you choose.
But Wills do not avoid Probate.
How does planning your estate avoid probate?
Again, you do not avoid probate with a Will. A Will must go through Probate, if there’s any property that is in the character that requires probate. You’ll need to schedule a legal consultation to make that determination.
If your estate has to go through probate, it becomes an unnecessary cost and burden, especially when a little planning would have avoided it.
Probate takes at least four (4) months because of the statutory requirements. It likely takes 5-6 months though. If your Personal Representative hires a lawyer, that can be expensive to have a lawyer for that time, although we offer reasonably low flat fees on simple estates.
What are the reasons that it is important to avoid probate?
Privacy: Probate is a public process and you get a case number. It requires publication, which goes into a database. Avoiding probate allows for the distribution of assets in a private manner.
Cost: Probate can be expensive. There are court costs, attorney’s fees, executor’s fees, and other administrative expenses. These costs can reduce the amount of the estate available for distribution to the beneficiaries.
Time: The probate process can be time-consuming. It may take several months to several years to fully settle an estate, depending on its complexity and the jurisdiction. This delay can be a hardship for beneficiaries relying on the inheritance.
Complexity: Probate can involve complicated legal and financial steps, including the validation of the will, inventory of the estate’s assets, payment of debts and taxes, and distribution of the remaining assets.
Disputes: Since probate is a public and court process, it gives a platform for disgruntled parties to contest, which leads to family disputes, disharmony, and unwanted litigation — oftentimes bringing disgrace to the Decedent’s legacy. Unfortunately, statutes do not prevent interested parties from bringing claims, even if they provide for compensation when done in bad faith. See Ariz. Rev. Stat. § 14-1105. Understanding undue influence in Arizona is a cornerstone to most probate dispute. There are countless cases dealing with this issue. For example, In re Estate of Frick, 13 Ariz. App. 247 (Ariz. Ct. App. 1971) shows the challenge of proving undue influence, and there are many like it. This is another reason to consult with a lawyer to prevent these foreseeable challenges, and helping avoid disputes with heirs.
Control: By avoiding probate, individuals can have more control over how and to whom their assets are distributed. Certain mechanisms like trusts can provide a greater level of specificity and conditions on distributions that probate might not allow for as easily.
Therefore, many people use estate planning strategies such as trusts, joint ownership, and beneficiary designations to transfer assets in ways that can avoid probate.
Our goal is to help clients avoid probate altogether. This is rather simple with most people.
What are the benefits of a Trust?
The previous question leads us to discussing the benefits of a Trust, which is the main testamentary tool to avoiding probate. It does so much more than that though. It also plans for your care to avoid guardianship and conservatorships. It plans for situations when children are involved.
Trusts are designed to take your estate out of court scrutiny. The small up front cost saves a significant on the backend cost, and it is the best way to create peaceful transitions.
Why should I consult an attorney and not just download forms online?
Arizona has certain formalities to give legal effect to your estate documents. I’ve seen very smart people draft Wills that are invalid when they downloaded forms and failed to follow the formalities.
Is a holographic (handwritten) Will valid in Arizona?
Yes. See Ariz. Rev. Stat. § 14-2502 and § 14-2503. Your Personal Representative can probate a handwritten Will. It doesn’t even need to be written in a sophisticated manner. It can be a brief statement written on a napkin. However, if you handwrite a Will, you may want to have the typical structure from a form you find online. That is to state, that I do not recommend using forms online, unless you put them into your own handwriting. I always recommend a handwritten Will as a placeholder to a Will that a lawyer helps you draft.
What are the benefits of keeping items in a safe place and sharing that information with a trusted party?
One problem with our world is all the lonely people, as stated by John Lennon. We can do a service by watching out for people, especially for people that could have a trusted person and haven’t established it. We can either be that person or help them connect with that person. Everyone needs someone that they trust with access to their important documents. If an emergency arises, people need someone to step in and make decisions when they cannot.
It helps to put your important documents in a particular place and share that information with one or two other people. If something happens to you, that person knows where to get these papers.
