Estate Planning FAQ
Top Seven Estate Planning Questions
(1) What exactly is an estate plan?
An estate plan includes key documents that ensure your wishes for yourself, your family, and your assets are carried out in the event of your illness or death. Estate plans protect your loved ones and ensure your wishes are carried out. A property drafted and funded estate plan can also avoid probate. Estate plans frequently include:
Durable Financial Power of Attorney:
A legal document that lets you appoint someone to manage and execute financial decisions for you if you ever become unable to do for yourself.
Mental Health Power of Attorney:
A legal document that allows you to designate a trusted person to make mental health care decisions on your behalf. This is necessary because in Arizona a regular healthcare power of attorney doesn’t grant the authority to make decisions related to your mental health.
Health Care Power of Attorney:
A legal document that allows you to designate someone to make medical decisions on your behalf. For instance, your healthcare agent will have the ability to discuss your medical care with professionals and consent or refuse consent to treatments.
The will is a legal document that will, amongst other things, (i) designates an executor to carry out the provisions of the will, (ii) name the beneficiaries who are inheriting your assets, (iii) provide instructions for how and when the beneficiaries will receive the assets, and (iv) name guardians for minor children.
A trust is a contract that designates a third party (trustee) to handle your assets for the benefit of your beneficiaries. Trusts can specify exactly how and when the assets should pass to the beneficiaries and because they usually avoid probate, your beneficiaries can gain access to the assets without going through the court. Trusts must be properly funded in order to work, though. Working with an attorney is the best way to make sure that your assets are actually part of your Trust. A standalone Trust that you find online is not enough.
A legal document that allows you to either designate a guardian for yourself should you become incapacitated or allows you to designate a guardian for your children. This ensures that your life is in the hands of someone you trust in the event you can no longer make decisions for yourself and protects your children’s future upbringing in the event you die.
Real estate is often the most valuable part of an estate. With an Arizona Beneficiary Deed, you can convey your interest in your property to other people or entities following your death.
Importantly, estate planning is an ongoing process so you should review and update your plan as your family and financial circumstances change throughout your life.
(2) What happens if I do not have an estate plan?
Besides assets that will be passed by beneficiary designation or governing contract, Arizona intestacy law will determine the distribution of your estate’s assets after you pass away if you do not have an estate plan. This will potentially result in undesirable results as well as a lengthy probate process.
An estate plan is also crucial for decisions while you are still alive. If you become incapacitated without an estate plan, a probate proceeding will occur to designate your legal guardian or conservator.
(3) Why should I have a trust?
A will only directs how assets will be distributed, but the assets are still required to go through the probate court before they are distributed to your intended beneficiaries. A trust, if properly funded on the other hand, allows you to avoid court-supervised probate of trust assets. This provides a level of relief to your family if, for example, you become incapacitated, a successor trustee could access the trust funds to pay your medical bills and manage your assets without having to go through the court.
In addition, a trust allows you to manage and control when the beneficiaries will receive the funds. For instance, you can create a support trust that directs the trustee to pay to the beneficiary as much as is necessary for their health, education, maintenance and support. Trusts also offer a level of protection from your beneficiaries’ creditors.
(4) Can I do my own will, trust, POA and guardian designations?
Yes, but this is not recommended. Forms that are found online are often not state specific and do not comply with Arizona law. There is also no one size fits all approach because each individual has a unique situation, no matter how simple it may seem. Our law firm has probated numerous Trusts that people have found online thinking they would avoid probate, but the Trusts have not been properly funded and therefore have been ineffective to avoid probate. Thus, it is vital to speak with an estate planning professional who knows what they are doing to make sure your family is fully protected and to avoid unnecessary costs down the road.
Hiring a probate attorney often costs more than if you had hired an attorney initially to create the estate plan that completely avoids probate. You might save money up front, but the expenses and hassle of probate will not go away without proper legal assistance. Your family will thank you for the care and attention that you give to your Estate Plan to make things easier on them down the road.
(5) How much does an estate plan cost?
Our law firm can create your estate plan for a flat fee. We offer a free initial consultation where we will discuss the flat fee exact cost for our services. The price we quote you will never change. The cost will be payable with 50% upfront and 50% at the end (when you sign the estate plan documents).
(6) What is the process?
The process will take place over three meetings, either: online, over the phone, or in-person. The first meeting is a free consultation where our firm will gather information about what type of estate plan will best suit your needs and we will discuss costs. In the second meeting we will review and explain a complete draft of your estate plan. At this time you will have the opportunity to discuss changes you want for the final draft. Finally, you will sign the complete version of the estate plan in the third meeting. After the signing meeting, we will record any deeds for your real property, organize the estate plan in a binder, scan a copy of the plan to a flash drive and give you both the flash drive and the original copy.
(7) When is the best time to create an estate plan?
The best time is now! So many families are caught off-guard and are unprepared when incapacity or death occurs because no one likes to think about their own mortality. You can create an estate plan now and make changes throughout your life that best reflect your family and financial circumstances.
If you have questions about forming an estate plan or are ready to schedule your free initial consultation, please contact Windrose Law Center PLC at 602-457-1846.