Why Valid Wills Are Important.

Your Last Will and Testament (“Will”) determines how your property is divided when you die and who gets what. Having a Will is one of the most important things you can do to protect your estate and your loved ones.

Having a Will is important for many reasons. The most critical one is that a Will helps your estate avoid probate. If you die without a Will, your estate will have to be probated and your property will pass through your state’s intestacy laws. Probate is a long and often expensive process.

Although a person’s Will also goes through probate, the process is a whole different animal. It is faster, cheaper and far less complicated because the probate judge has the Will to tell him/her what your wishes are and who gets what. Without a Will, the probate judge must make his or her own determinations.

The Formalities of a Valid Will.

But what exactly makes a Will valid?

In part, what makes a will valid depends on the laws of the state in which you live. Each state has its own legal requirements for what makes a valid will which is why you should consult with counsel in the state in which you live. However, most states have the same or similar requirements and most will accept a Will that was made in another state.

In addition to other formalities for making a Will (see below) you must be at least 18 years old and you must be “of sound mind.” Basically, that means that you must know the extent of your property, know that in making a Will you are giving instructions for disposing of that property, and you must know who would naturally benefit from your death (i.e., close family members).

Generally speaking, to be valid a Will must:

• Be a written document (meaning typed or printed);
• Be signed by the person making the Will (the “testator” or “testatrix”); and,
• It must be signed by two witnesses. The two witnesses must have been present when the maker of the will (the testator or testatrix) signed it and must have witnessed the Will, and they must also have witnessed each other sign the document.

While not all states recognize holographic (handwritten) wills, Arizona does. This does not mean, however, that holographic wills are a good idea. They are not. Because they are not drafted by trusts and estates counsel, handwritten wills almost always contain costly mistakes and errors and can often be rejected by the probate court which means it is the same as having no Will at all.

A Will that meets all the formalities ensures that your wishes will be carried out.

Your Most Important Document.

The importance of having a valid and enforceable will cannot be overemphasized. Your Will does not just pass on your property. It is how you leave a legacy to those you love the most. The best way to be certain that your estate plan documents will be correct, up-to-date, complete, and enforceable, is to meet with competent and experienced estate planning counsel.

A Trusts and Estates Lawyer Can Ensure That Your Will is Valid.

When you entrust your estate planning needs to competent counsel, you decide how you want your estate to be distributed and to whom. 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.

1. Differences in Form and Purpose.

Your will (“Last Will and Testament”) is a legal document that states your final wishes and gives instructions about how to divide up your property when you die. It directs the manner in which you want your property distributed and to whom.

A trust, on the other hand, is a fiduciary arrangement that allows a third party, or trustee, to hold assets (money or property) on behalf of a beneficiary or beneficiaries (the person or persons for whose benefit the trust is made). Each state has its own laws governing the types of trusts permitted, how they are created and the laws that govern them. Which is why it is important that you consult with knowledgeable counsel.

2. Differences In When Each Comes Into Effect.

Unlike a trust, your Will only comes into being (i.e., is effective) after you die. This is why it is so important to make sure that your will is properly drafted; because once you are gone, it is impossible to change your will and next to impossible to fix any mistakes.

A trust, on the other hand, is effective as soon as you create it (and fund it with property or money).

While there are many differences between a will and a trust and what each can do, they are alike in that they are necessary and critical estate planning tools that everyone can use.

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.

Usually when we mention probate, we are talking about how to avoid it.

Today we thought we would give you a peek into the (dreaded) probate process.

What Is Probate?

Probate is the court-supervised process of distributing your assets to your heirs when you die. If you die leaving property (especially real estate) in your name, the only way to transfer ownership of it to your heirs is for a court to order the transfer through the probate process.

If you do not have a will or a trust when you die, then your entire estate will have to go through a formal court-supervised probate process to get distributed. In Arizona, if you have a will when you die, then it is possible to do an informal probate which simplifies the probate process.

What Does the Court Do in Probate?

The probate process usually begins when the deceased’s representative (in Arizona, usually called the “personal representative” elsewhere often called the “executor”) files a petition with the court to have the deceased’s estate administered. The process (which can take a year or longer to complete) ends when the court formally “closes” the estate.

There are a number of steps the court takes to probate an estate. In most states the court will take at least the following steps:

• Proving the validity of the will, if there is one.
• Choosing a personal representative or executor or representative for the estate;
• Totaling up all the assets;
• Paying all estate debts, estate taxes and costs of administration;
• Identifying all heirs or other family members;
• Distributing assets (if any) remaining after administration of the estate to the heirs under the will (if there is one) or under the intestacy statutes.

There may be other things to be done or that the probate court will do, depending on the state and the factual situation of the estate being probated. However, the list above should give you a fair idea of what goes on in the probate court.

Even the most simple and uncontested probate proceedings can take many months to a year to complete. If there are disputes or claims, it can take much longer.

Court procedures involve court costs (filings) and often involve attorneys, and all this leads to legal fees and costs. Which is why we so often talk about how and why to avoid probate.

Talk to an Estate Planning Attorney!

If you have questions about probate or how you can avoid probate, call us. We offer creative solutions to avoiding formal probate even with a simple, affordable will package 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 or connect with us on Facebook , Twitter or LinkedIn.

No doubt about it; technology has revolutionized our lives and our society. It has even changed what is considered to be part of a person’s “estate” when they die.

#DigitalEstatePlanning.

“Back in the day” all you had to worry about was your present life, the afterlife and passing on your tangible assets (real property, stocks & bonds etc.) to those you love.

In today’s world, you have to worry about your present life, the afterlife and your digital life!

Which means that your estate planning has to include your tangible and intangible digital assets, like:

• smartphones
• computers (laptops, tablets)
• flash drives
• e-book readers
• social media accounts (Facebook, Twitter, LinkedIn etc.)
• webpages
• domain names, and
• blogs.

Unfortunately, many internet service providers do not allow accounts to be transferred to heirs —even if your Will says to.

Plus, certain privacy protections created by federal law prohibit online service providers from federal privacy laws disclosing the contents of certain electronic communications and files.

As a result, individuals must plan ahead to allow their heirs access to (or disclosure of) their online accounts and digital assets when they die or if they should become incapacitated.

What You Can Do to Prepare for Your Digital End.

There are some things that you can do to ensure that your digital assets get included in your estate plan and passed on to your loved ones.

1. Select a Legacy Contact.

Some social networks like Facebook, give you the option of choosing someone to have limited access to your account after you die in order to manage it or delete it altogether.

2. List All Your E-mail Accounts and Passwords.

Another thing you can do is to list all of your e-mail accounts and passwords and keep it with your Will, so that your lawyer or personal representative (or “executor”) will have access to them if needed.

When it comes to access to social media profiles or online financial accounts, making sure that the person who will be handling your estate after your passing has access to these accounts and passwords is especially important.

3. Consult Experienced Trusts and Estates Counsel.

Finally, one of the best things you can do to prepare your digital estate is to consult with experienced and knowledgeable trusts and estates counsel.

Every state has its own laws regarding the treatment of digital assets and both the law and technology keeps evolving, making it difficult for laymen to keep up with all the changes.

Digital asset planning is important. It addresses the financial and sentimental considerations of your digital assets.

We Can Answer All Your Questions.

If you want to know what digital assets you should plan for, call us. We offer free consultations, and we serve all of Arizona. Our offices are located in Sedona, Arizona and our practice focuses on trusts and estates law. We can answer all your questions and help you. Call us at 928-282-1483 or send us an e-mail.

If someone asks you to be the trustee of their trust, should you do it?

Well, as is so often the answer in law, it all depends.

One thing is certain, however, and that is that before you say yes, you should fully understand what you would be agreeing to.

So let’s take a look at some of the things you should know about being a trustee.

A Trustee is a Fiduciary.

The first thing you need to understand is that a trustee is a fiduciary—and what that means.

A fiduciary is a person who is invested with rights and powers to be exercised for the benefit of another.

A fiduciary owes a duty of utmost care and loyalty to the beneficiary. The trustee’s duty of loyalty means that the trustee must put the needs of the beneficiary/ies above his or her own self-interest. It is important to understand that if you are the trustee of a trust, you must manage and use the trust assets for the benefit of the beneficiary —not for yourself. A fiduciary cannot engage in self-dealing and may not exploit the fiduciary relationship for his or her own benefit.

The duty of care requires a fiduciary to carry out all of his/her responsibilities in a prudent and informed manner.

As a fiduciary, you will be held to a very high standard. You will be required to pay even more attention to the trust investments and disbursements than you would to your own accounts.

What are the Responsibilities of a Trustee?

Your duties as a trustee will be governed by the trust documents.

However, broadly speaking, as a trustee, some of your responsibilities will be to:

• Follow the instructions in the trust document.
• Treat all beneficiaries impartially.
• Protect and invest all trust assets prudently and in a manner that will result in reasonable growth with minimal risk.
• Make distributions as required by the trust documents.
• Keep accurate records and provide an accounting.
• File tax returns.
• Report to the beneficiaries as required in the trust document.

These are by no means the only (or all of the) duties of a trustee, but it should give you a good idea of what is involved.

Trustees are allowed to charge a reasonable fee. To determine what is “reasonable” in this context, it is best to consult with experienced and knowledgeable trusts and estates counsel.

Have Questions? We Have Answers.

If you would like to know more about what is involved in being a trustee or in choosing a trustee for your trust, call us at 928-282-1483.  We offer FREE consultations. We have offices in Sedona, Arizona and we serve all of Arizona.  E-mail us or connect with us on Facebook , Twitter or LinkedIn.

Lots of people have trust issues.

In our practice, the one we see most often is: who should you choose as your trustee?

Trusts.

A trust is a fiduciary arrangement that allows a third party, or trustee, to hold assets (money or property) on behalf of a beneficiary or beneficiaries (the person or persons for whose benefit the trust is made).

The trustee is responsible for managing the trust assets (the money or property) on behalf of the beneficiaries. It is an important job.

As the maker of the trust, you choose who you want to be the trustee (or successor trustee). The trustee can be a person you know (family member or friend) or the trustee can be a professional trustee (often an attorney or corporate trustee).

Each state has its own laws governing the types of trusts permitted, how they are created and the laws that govern them. That is why it is important that you consult with knowledgeable counsel about how to draft your trust and what you should consider when choosing a trustee.

Should You Use a Corporate Trustee?

Because you are choosing a fiduciary—a person in whom you place the utmost trust and confidence—the decision ultimately lies with you and you alone.

However, here are a few things to think about if you want to consider appointing a professional or corporate trustee for your trust.

Corporate Trustees.

A corporate trustee is generally a bank trust department or trust company. When you put your money or assets into a trust, the bank or trust company can help you invest and manage your wealth.

If you appoint a corporate or professional trustee as the trustee for your trust, that person would have complete responsibility for managing your trust assets in accordance with your wishes and instructions (as expressed in the trust documents).

Choosing a professional or corporate trustee can be the right choice for persons who don’t have a lot of family, are single or widowed, don’t have children, or simply do not have anyone that they can trust with their money.

In other instances, an impartial professional can be the right choice for trusts that have been set up to deal with family members who have spending or addiction problems, because it keeps you (or some other friend or family member) from getting embroiled in drama and difficult decisions.

You might also consider appointing a professional or corporate trustee as a successor trustee—someone to step in and run your living trust if you become incapacitated.

There are as many reasons for choosing a professional trustee as there are reasons for setting up a trust. At Esser, Bradley and Khalsa, our premier estate planning attorneys work with the individual needs and circumstances of each client to tailor a Legacy Estate Plan that fits their goals.

Let Us Help You With Your Arizona Trusts.

Choosing a trustee is a very difficult and important decision. Let us help you sort through it. We are Estate Planning attorneys with 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. Contact us to set up your free appointment.

In its most basic form, estate planning is organizing your assets and making sure that your property goes to the people you want it to go to after you die.

But here at Esser, Bradley & Khalsa, PLLC, we take estate planning well beyond the basics.

One of the things we always want our clients to think about is succession planning.

What is Succession Planning?

Succession planning is when you make a plan for someone to take over for you (a successor) when you are no longer able to perform your responsibilities because of incapacity or death.

Succession planning is one of the most important things you can do. It can cover all the areas of your life where you would need someone to step in and take your place.

When you stop to think about it, there are a lot of areas in your life that would be affected if you died or became incapacitated.

What Areas of Your Life Need a Succession Plan?

• Business. For example, if you own a business, business succession planning is critical for the business to continue in the event of your death. Without a written plan, funding in place, and a person to act as your successor, the business you may have spent a lifetime building could fall apart without you.
• Family. Another important area where you want to choose who you want to succeed you is in your family life.
  • If you have small children, you will want to be certain to have a Will and appoint someone as “guardian” of your children should you die. If you don’t, then the court will appoint someone. And it may not be someone that you want raising your children.
  • Similarly, if you have people in your family who are unable to take care of themselves, or have children/adults with Special Needs, it is important that you provide for them (usually by a “Special Needs Trust”) and decide who should be responsible for making the decisions concerning their care if you should become incapacitated or die.
• Your Own Care. Finally, don’t overlook your own care. Succession planning extends to making a plan for who should take care of you if you become incapacitated. Generally, to do this you need to have certain documents in place such as a durable power of attorney, living will, or other necessary healthcare documents. These documents direct the level of medical intervention you want and who you want as the person to make all necessary medical and financial decisions for you if you become unable to make those decisions for yourself.

We know that you are irreplaceable. No one can really take your place. But it is important that you think about these things now and prepare for what may happen. The more you do now, the smoother the transition will be for your loved ones.

We Can Help You Prepare.

We are experienced trusts and estates attorneys. We know how important it is to make sure that your estate plan provides for a smooth and easy transition. We have offices in Sedona, Arizona but we serve Verde Valley and all of Arizona. We offer FREE consultations. Send us an email or call us at 928-282-1483 to schedule your FREE consultation.

Since we so often talk about death here on our trusts and estates blog, we thought that today we would spice things up a bit and talk about taxes—estate taxes as a matter of fact.

The Joy of Giving Gifts While Reducing Estate Taxes.

Everyone loves to receive a gift. Sometimes, the person giving the gift is just as happy as the person who receives it.

When it comes to estate planning, gift-giving can benefit you (your estate) as much as it does the person receiving your gift.

How?

Well, if you have a sizeable estate, one of the things you will need to think about is how much your estate will have to pay in taxes (“estate tax”) when you die. Because estate taxes for large estates can be pretty hefty, you may want to consider ways to reduce your estate taxes now while you are still alive.

One of the best ways to do this is by making gifts.

There are many good reasons for making a gift, including how good it makes you feel, but one of the best reasons for making a gift is because it can actually cost you less to make a gift while you are alive, than it does to wait until you die and have your estate pay estate taxes on the gift.

How can that be?

It is like this: when you make a gift during your lifetime, you pay a “gift tax.” When you make a gift through your estate plan, after your death your estate will pay an “estate tax” on that gift. While the fact is that you will pay taxes either way, making a gift during your lifetime has the added benefit of taking that item (i.e., the gift of money, stock, or other asset) out of your overall taxable estate. Which means that you not only give someone a gift, but you reduce your estate taxes overall.

Annual Gifts.

If you are in a position to need to reduce your estate taxes, gift-giving is a good way to do it. You can make tax-free gifts of up to $13,000.00 per person each year to as many people as you want (and up to $26,000 per person if you and your spouse give together).

Nor do you have to give cash as a gift. You can gift appreciating assets and doing so takes any future appreciation of that asset(s) out of your estate.

There is a lot more to know about gift-giving and how it can help you further your estate plan by reducing your estate taxes. To find out more about estate planning options that will work for you, consult with capable and experienced trusts and estates counsel.

Talk To One of Our Trusts and Estates Attorneys.

To learn more about how gift-giving can benefit your estate, or to get started making your estate plan, call us at 928-282-1483.  We are experienced trusts and estates attorneys. We offer free consultations. Our offices are located in beautiful Sedona, Arizona but we serve all of Arizona. We can help you provide and plan for your loved ones. Call 928-282-1483 today or contact us here.

February 14 was Valentine’s Day! Just think of it: romance, roses, candlelight dinners… and, of course, chocolate!

What in the world could be better than that?

Only one thing that we can think of… a Revocable Living trust.

What is a Revocable Living Trust?

More commonly called a “Living Trust” (or, sometimes, “inter vivos trust” or “revocable trust”) these trusts are an estate planning tool that we frequently use to avoid the costly and time-consuming snares of probate.

A trust (any trust) is a legal document that authorizes someone to hold and manage assets (property, money, stocks etc.). Depending on what state you are in, the person who creates the trust is called a “declarant,” a “trustor,” a “grantor,” or a “settlor.” The person who manages the trust is called the “trustee.” And the people who benefit from the trust (i.e., the ones who get the money or property or have it managed for their benefit) are called the “beneficiaries.”

As long as the Living Trust is not tax sensitive, the same person can be the trustor, the trustee and the beneficiary of a Living Trust.

What does a Revocable Living Trust Do?

A well-drafted Living Trust can be used to distribute a person’s assets after his (or her) death.

Because assets placed into a Living Trust are in the name of the trust and not the name of the decedent (the person who owns them and then dies), they do not have to go through probate to get distributed the way property left in a Last Will and Testament does. That is a big reason why we love Living Trusts. They help you to avoid the costs and delay of probate.

Another advantage of a Living Trust is that, much like a power of attorney, it can be used to manage a person’s assets if they become incapacitated. This does not mean that you do not need to have other healthcare documents in place, such as a living will and certain powers of attorney, if you have a Living Trust — you do. It just means that if you are the trustee of your Living Trust, we will make sure to name two successor trustees who can manage the trust assets if you should become incapacitated and/or at your passing.

Falling in Love With Revocable Living Trusts?

If you love your family and want to make sure your estate is settled smoothly and your assets are distributed the way you want them to be, call us. We can help you develop a Legacy Estate Plan that meets your needs. Our offices are in Sedona, Arizona but we serve Verde Valley and all of Arizona. We offer free consultations and we can help you with all your estate planning needs. Contact us to set up your free appointment.

In estate planning, you may often hear these titles being kicked around: Personal Representative, Beneficiary, or Trustee.

But who are these people and what do they have to do with your Legacy Estate Plan?

Let’s find out.

Trusts, Beneficiaries and Trustees.

Before we can have a beneficiary or trustee, we first need to have a “trust.”

Very briefly, a trust is a  fiduciary arrangement which can form part of an estate plan. The trust is best analogized to an LLC, or essentially a company that holds your assets for the benefit of someone (the “beneficiary”). There are generally 3 parties to a trust:

• The Settlor (or Grantor): The person who establishes the trust fund.
• The Beneficiary: The person who benefits from the trust fund. This is the person that the trust property (money, stocks, real estate etc.) will be managed for and will be used to benefit, as laid out in the specific instructions given by the Settlor when he or she establishes the trust.
• And, the Trustee: The trustee is the person, persons, or institution (like a bank), that manages the trust fund to ensure that your wishes for the beneficiaries are carried out.

It is the trustee’s duty to follow the instructions in the trust documents and to make sure that the assets in the trust (money, property, stocks etc.) are safeguarded, invested appropriately, and are used to benefit the beneficiary.

There are many kinds of trusts, a lot more to it, and every state has its own laws governing the types of trusts permitted – all of which is why it is important for you to consult with knowledgeable Arizona Trusts and Estates counsel about what is right for you.

Personal Representatives and Beneficiaries.

When you have a Last Will and Testament, or a “will,” in it you will appoint someone as your “Personal Representative.” The Personal Representative is the person who will gather up your assets, get your will probated, and administer your estate after you die. He or she will remain in charge of your estate until it is legally closed.

Your Personal Representative is responsible for, among other things, making sure that your wishes are carried out.

In the context of a will, your “beneficiaries” are those who inherit from you under the terms of your will.

Sound a little Complicated? Don’t worry, We Are Here to Help You!

We Are Estate Planning Attorneys. 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.