Keep Them Up-to-Date.

We cannot stress enough how important it is for you to have estate planning documents to protect yourself and your loved ones before the inevitable (your death) happens.

But equally important is the fact that once you have these documents in place, you should not just forget about them. When life’s major events occur— births, deaths, divorce, acquisitions of homes/property etc.—it is necessary for you to update your estate planning documents.

Why?

Because certain events, like divorce or someone’s death, can completely change the effect of your will or your overall estate plan. For example, if you have a simple will in which you leave everything at your death to your spouse, and then you get divorced, you are going to want to update your will. Or, if someone you left a bequest to dies, if you do not update you will to leave that bequest to someone else, when you die, that bequest will fail or be void.

Problems with outdated estate planning documents, like a power of attorney that is never updated after the named attorney-in-fact dies, can cost your beneficiaries a lot of time, money, and headaches to try to fix.

Your life, your legacy, your estate and your loved ones are all too important to be ignored.

Talk to an Estate Planning Attorney!

If you have questions or need help putting an estate plan in place or updating the one you have, call us. We offer creative, affordable Will packages through our Legacy Estate Planning process. We have offices in Sedona, Arizona. We serve Verde Valley and all of Arizona. We offer free consultations and we can help you with your estate planning needs. E-mail us here or call 928-282-1483 to set up your free appointment.

Although they are for the benefit of the ward, guardianships are a rather extreme form of intervention in another person’s life. This is because they give the guardian control over all of the ward’s personal and financial decisions—often permanently. Guardianships can also be difficult to revoke once they are in place.

But there are alternatives to complete formal guardianships that are overseen by the court.

Here are 3 possible alternatives:

1. A Living Trust.

A Living Trust is a legal entity that comes into existence during your lifetime. A Living Trust is capable of owning financial assets, real estate, and/or other property. It can be used to avoid the complications of court oversight and probate that a formal guardianship imposes.

2. A Health Care Power of Attorney.

While this one is more limited than a Living Trust, a Health Care/Medical Power of Attorney and a Mental Health Care Power of Attorney are in Arizona where we practice, (also called “Advance Directives” or “Medical Power of Attorney” in some states) allows a person to make medical decisions for another. This document includes the types of provisions you usually find in a “Living Will,” which is a document that you use to indicate what your wishes are with regard to feeding tubes and/or artificial life support, should you become incapacitated.

3. A Durable Power of Attorney.

Also more limited when compared to a Living Trust, this alternative to a full guardianship is still very powerful. A Durable Power of Attorney allows someone to control the finances and make all financial decisions necessary for the incapacitated or otherwise incapable person.

Guardianships have their place. But there are also less intrusive ways to assist a loved one with their personal or financial decisions.

Want to Learn More?

We can help. We are experienced trusts and estates attorneys in Arizona. We offer free consultations, and we serve all of Arizona. Our offices are located in beautiful Sedona and we serve Verde Valley as well. We can help you provide and plan for your loved ones. Call us at 928-282-1483 or contact us here.

Living Together, Torn Apart Without an Estate Plan.

Unlike married couples, cohabiting partners do not have the legal right to make the necessary health and financial decisions for each other in the event one of them becomes incapacitated. That means that if you do not have a valid estate plan, and your partner becomes too ill or injured (think, lying there in a coma) to make his/her own decisions, you will not have the legal right to pay his/her bills or make any decisions about his/her medical care — including feeding tubes and life support. Should your partner die, (absent an estate plan) the state will decide how his/her property is to be distributed —and it will not go to you.

Cohabiting couples also do not qualify for the unlimited marital deduction for estate and gift taxes for transfers of property between themselves. You can minimize these adverse legal effects by seeking advice of experienced trusts and estates counsel.

It is important that cohabiting couples get an estate plan in place, because without one, neither partner is protected in the event of death or incapacity. Do not just assume that your partner “will be taken care of.” The reality is that in the event of the death of one cohabiting partner, the other just may lose everything — home,  partner, property, and the life the two of you built over the years.

Estate Planning is Necessary and Affordable.

At Esser, Bradley and Khalsa, our estate planning attorneys will work with you during a FREE consultation to discuss your specific needs. We are experienced trusts and estates counsel with offices in beautiful Sedona, but we serve all of Arizona. Call us at 928-282-1483, connect with us on Facebook  today to set up your free appointment.

What is a Prenup?

Prenuptial agreements are contracts made between two people before they get married (pre (before)-the-nuptials). These are private contracts made between two people and they generally concern things about their marriage; including the financial aspects of it. In Arizona, where we practice, prenups are enforceable as long as their terms do not violate good morals or the law and do not encourage divorce.

Prenuptial Agreements and Estate Planning.

Arizona is one of several states (there are nine in all: Wisconsin, Idaho, Texas, New Mexico, Louisiana, Arizona, Washington, Nevada and California) that are community property states. What this means is that property acquired during marriage is considered to belong to the “community” (the marriage). When a couple in a community property state gets divorced, the community property is divided equally between them. “Separate property” of one spouse (acquired before the marriage or thru inheritance, gift or devise during the marriage) remains that person’s separate property at the time of divorce.

When it comes to estate planning, community property states are unique in how they handle property on the death of one spouse. In a community property state like Arizona, you can only give away your separate property and half your marital property when you die. That means that if you make a will or trust leaving more than 50% of your marital property to someone when you die, the court will not honor your wishes. It will  not allow the transfer of more than your 50%. And, in every state except Georgia, you cannot disinherit your spouse.

Prenups Change the Marital Inheritance Game.

What prenuptial agreements do, is allow couples to change the inheritance rules. If, for example, you have children from a prior marriage, and your new spouse has his/her own assets and does not need yours, you can agree in a prenuptial agreement that all of your property will go to your children and your spouse will get nothing. Or, if you are part of family business that you were involved with long before you ever met your spouse, you can direct that your share of the family business goes to your children at your death and not to your spouse.

Prenups are Powerful and Enforceable.

It bears repeating that valid prenuptial agreements change the inheritance and community property laws. They are both powerful and enforceable estate planning tools. Prenuptial agreements override both community property and elective share law.

Which is why you should always consult with competent counsel if you are considering a prenup or are thinking of signing one.

If you are considering remarriage, it is very important that your estate planning documents are carefully drafted by knowledgeable trusts and estates counsel.

Work with a Trusts and Estates Attorney.

In our practice, we frequently work with blended families. We will sit down with you and go over all your concerns and answer all your questions. We offer FREE consultations. We have offices in Sedona, Arizona but we serve Verde Valley and all of Arizona. Simply call us at 928-282-1483 or contact us here.

Your will is one of the most important documents you will ever execute in your life. What are the chances you will mess it up if you write it yourself or use an online form? Big. Very big.

And what are the chances that anyone can fix any mistakes you made in your Will after you die? Zero.

So writing your own will is not a good idea.

A Critical Estate Planning Tool.

In estate planning, a lot depends on your will and on making sure that your will is correct and error-free. Your will distributes your property to your loved ones, of course, but it can also do much more. A will can:

• name a personal representative or executor to wrap up your estate
• name guardians for your children and their property
• provide instructions for trusts for your children or other young beneficiaries
• reduce conflict by making your intentions clear
• forgive debts, among other things.

All wills must comply with certain legal requirements in order to be valid, and the laws in each state vary as to what is required to make a valid will.

An experienced trusts and estates attorney can not only help you draft a will specific to your unique needs, but can make sure that it is error-free. This is important because errors in a will can render it invalid (in whole or in part) and can cost your estate a lot of time and money—either because they will cause fights among your beneficiaries (will contests) or because they may cause your entire estate to be probated.

Another reason why you should not write your will yourself —either by hand or with a form— is because you may need the advice of counsel. Every situation is unique. Some  people have monetary, property or relationship situations where they need legal, tax, or personal advice. You can’t get that from a form (or non-attorney source). Working with an attorney instead of trying to do-it-yourself can keep you from making costly mistakes.

Talk to Us First.

Before you write your own Arizona will, talk to us. We offer FREE consultations and we serve all of Arizona. We have offices in Sedona, Arizona. Connect with us on Facebook or Twitter  or send us an E-mail  to set up your free appointment today!

Why?

Because there simply are some jobs that are best left to the professionals. And doing your own estate plan is one of them.

Too Easy to Get Wrong. Impossible to Fix.

One of the main reasons why you should not attempt to draft your own estate documents (wills, trusts, etc.) is that it is too easy to make mistakes. And once made, it is impossible if not nearly impossible to fix them.

For example, all wills are required to comply with certain formalities. If you draft your own will and for whatever reason fail to meet every will formality, your will could be held to be invalid either in whole or in part. Meaning that the court could throw the whole thing out, or a certain bequest would not go to the person you wanted it to go to.

Mistakes in drafting can result in expensive and time-consuming probate (if your will is invalid) or expensive and time-consuming will contests (to prove it invalid). Either way, you won’t be around to explain or fix the problem; leaving your loved ones to shoulder the burden.

Your Estate Planning is Too Important to Not Have it Professionally Done.

Another reason why we do not recommend trying to do your own estate planning is because your estate plan is critical to the proper disbursement of your property and to the protection of your loved ones.

When you use online forms or non-attorney sources you cannot get the legal and/or tax advice that you may need to make good choices and informed decisions. As a result, you could make big mistakes that may result in your estate being swallowed up in taxes or unnecessary litigation.

Don’t Take Chances.

We cannot stress enough how important it is for you to have estate planning documents to protect yourself and your loved ones before the inevitable (your death) happens.

But equally important is the fact that you have these documents prepared by experienced trusts and estates counsel. If you have questions or need help putting an estate plan in place or updating the one you have, call us. We offer creative, affordable Will packages through our Legacy Estate Planning process. We have offices in Sedona, Arizona. We serve Verde Valley and all of Arizona. We offer free consultations and we can help you with your estate planning needs. E-mail us here or call 928-282-1483 to set up your free appointment.

Why?

Because trusts are one of the most flexible estate planning tools we have.

Trusts and Estate Planning.

Trusts can protect your property, save on estate taxes, and help you avoid probate. Trusts can do many things and they are not one-size-fits-all.

For example, “Special Needs Trusts” (“SNT”) are trusts that are set up to provide for the immediate and future needs of disabled persons or persons with “special needs.” The SNT can be customized to address the individual needs of the disabled person. An SNT is managed by a “trustee” for the benefit of the beneficiary and  lasts as long as it is needed.

However, a SNT needs to be carefully drafted so that it does not interfere with the disabled person’s ability to become and remain eligible for need-based government benefits like Medicaid and Supplemental Security Income (SSI).

Other trusts can be general purpose trusts. Still others can help you achieve philanthropic goals. Charitable trusts, for example, let you donate generously and give your heirs a tax break at the same time.

Trusts can be revocable (meaning you can change your mind) or irrevocable (meaning you can’t).

What trust is right for you and what a trust can do for you generally depends on your particular circumstances and what you need.

Seek Professional Advice.

To find out what type of trust is right for you, speak to an experienced trusts and estates attorney.  We are estate planning attorneys with offices in Sedona, Arizona. We offer free consultations and we are available to service all of Arizona. We can help you with your estate planning needs. Connect with us on Facebook , Twitter or LinkedIn or Contact us to set up your free appointment.

Choosing to Leave Your Home Through Your Will.

Your Last Will and Testament (“Will”) determines how your property is divided when you die. You can (and most people do) leave your real property to your heirs (your spouse; children) through your will. This is a completely proper and valid way to pass on your property.

However, if you leave the family home to your heirs through your will, it must pass through probate. Not the time-consuming and expensive probate process which occurs when you have no will, but probate nevertheless. There is nothing wrong with this.

But, there is another option.

Beneficiary Deeds.

Arizona law allows you to pass on your real property by way of a beneficiary deed. (A.R.S. § 33-405. ) This means that you can sign and record a deed during your lifetime, that transfers your real property to one or more people upon your death.

The advantages to using a beneficiary deed as opposed to your will, are that you can:

• name one or more beneficiaries
• one or more owners can leave the property to multiple beneficiaries
• the deed transfers the property only upon your death, and
• you can revoke it at any time.

In contrast to leaving your property through your will, with a beneficiary deed, your heirs will receive the property immediately upon your death because the deed does not have to go through probate.

Don’t Know What is Best for Your Estate?

If you would like to learn more about beneficiary deeds or anything related to trusts and estates, call us. We Are Estate Planning Attorneys in Arizona. We have offices in Sedona and we serve Verde Valley as well as all of Arizona. We offer free consultations and we can help you with your estate planning needs. Contact us to set up your free appointment.

Inherited Retirement Accounts.

For tax purposes, retirement accounts are considered to be “income in respect of a decedent.” As such, any amounts withdrawn from non-Roth accounts are subject to income tax at the beneficiary’s ordinary income tax rate.

When it comes to inherited retirement accounts, not all accounts are treated the same. Inherited employer-sponsored plans, like 401(k)s and pensions, often have more limitations and requirements than do inherited IRAs. For example, employer-sponsored plans frequently require that the account be withdrawn within five years of the account owner’s (i.e., decedent’s) death. The withdrawal must be taken even if the beneficiary  does not want or need to take the money out. All withdrawals by the beneficiary are subject to income tax.

Inherited IRAs, on the other hand, can almost always be stretched out over the life expectancy of the beneficiary. This allows continued tax-deferred growth in the account. It can also reduce the beneficiary’s immediate tax liability.

Passing on a retirement account to your beneficiaries by way of a trust provides increased protection and flexibility. When you have trust that is specifically designed to receive retirement account balances, this allows the account to continue growing on a tax-deferred basis for as long as possible. It also protects the inherited balance from the beneficiary’s creditors. However, because of the income tax treatment of inherited retirement accounts, these type of retirement trusts must be carefully drafted. If not done correctly, they can require the entire inherited account balance to be paid out within five years of the account owner’s death—completely defeating the purpose of creating the trust in the first place. As a result, it is important that you consult with experienced trusts and estates counsel. 

Experienced Trusts and Estates Counsel in Arizona.

If you want to put an estate plan together that is customized for your needs, call us. We are experienced trusts and estates attorneys. We offer free consultations. We have offices in Sedona, Arizona and we serve Verde Valley and all of Arizona. Call us at 928-282-1483 or connect with us on Facebook , Twitter or LinkedIn.

Below are 3 Tips that will help you to avoid having your estate tied up in a will contest.

What is a Will Contest?

But before we get into how to avoid one, let us discuss what a will contest is.

A will contest is the legal process by which someone challenges the validity of a will.

To contest a will, the person contesting it must be someone who has an interest, like your spouse or heirs. (However, because state laws vary on who has standing to contest a will, you should consult counsel.) The person contesting the will must have legal grounds for believing that the will is invalid.

For example, perhaps they believe you were not of sound mind when you wrote your will. Or, someone unduly influenced you to leave all your money to your pet instead of your children. Or, the formalities of making the will were not complied with. There are many grounds for contesting a will and each state has its own rules concerning the specific requirements that must be met in order for a will to be valid, which is why it is important to consult competent estate counsel.

Tips for Avoiding a Will Contest.

Because of the undue time and expense that will contests cause (think, litigation; attorney’s fees; emotional drama and trauma) avoiding will contests is paramount. So here are 3 things you can do to ensure as much as you can, that your heirs do not contest your will.

1. Have Your Will Drafted by Competent, Experienced Trusts and Estates Counsel.

To us, this seems obvious. To you, it might appear self-serving. However, the number one thing you can do to avoid will contests or having an invalid will, is to have it properly drafted.

Handwritten wills (holographic wills) are almost always complete disasters and, while not invalid in Arizona, they are in other states. Do-it-yourself will forms and non-attorney drafted wills frequently leave out important aspects and requirements for valid wills and are susceptible to contests. (Keep in mind that non-attorneys cannot give you legal advice that would allow you to avoid making disastrous mistakes with your estate planning.)

2. Talk to Your Beneficiaries About Your Estate Plan.

Once you have an estate plan in place, you should talk to those most concerned in it. No, you don’t have to give them every detail of who you have left what to and why, but you do want to try to head off any problems (will contests) if you can. Often, if people know what to expect ahead of time (say, you have left more money to one child than another because you believe that child needs it more) it can prevent misunderstandings later.

3. Don’t Wait Until it’s Too Late!

Our final tip in this post is that you want to make your estate plan sooner than later. One of the most common grounds for contesting a will is that the testator or testatrix (maker of the will) was not of “sound mind” at the time the will was drafted. You want to make be in good health and not weak or vulnerable to the influence of others (caretakers etc.) when you make your will.

While you cannot control what your heirs will do when you are gone, following these tips will go a long way towards protecting your estate plan from a will contest.

We Are Here For You.  

If you want to avoid a will contest or are ready to get make your estate plan, call us. We are experienced trusts and estates attorneys. We offer free consultations. We have offices in Sedona, Arizona and we serve all of Arizona. Call us at 928-282-1483 or contact us here.  E-mail us or connect with us on Facebook , Twitter or LinkedIn.