Here is something  you don’t run across every day. Should you refuse an inheritance?

Maybe.

Surprisingly enough, there may be times when you do want to disclaim (refuse) an inheritance.

Here are 2 of them.

1. If You Are In Debt.

One situation in which you might want to refuse an inheritance is if you are in debt.

Why refuse money if you are in debt?

Because it is pretty certain that anything you get will go straight to your creditors. So you may want to allow the next beneficiary in line (the contingent beneficiary) to inherit.

2. To Avoid Paying Taxes.

Another reason you might want to disclaim an inheritance is to avoid paying taxes. Inheritances usually result in gift tax liability.

If you do not need the inheritance, you might consider disclaiming it so that the money can pass on to the next generation. By disclaiming your inheritance any gift tax will be taxed in the lower bracket of the next generation family member.

Disclaiming an inheritance is not something that is ordinarily done, which is why it is important to discuss your situation with experienced trusts and estates counsel.

Work with a Trusts and Estates Attorney.

If you are considering disclaiming your inheritance, talk to us. 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 connect with us on Facebook, or contact us here.

Just when you think you have it all under control…life happens. When life’s big changes come along, it is time to think about re-visiting and updating your Legacy Estate Plan.

Here are just a few key times in your life when it is important to review and update your estate planning documents (will, trust, powers of attorney etc.).

1. As a regular practice

We recommend that you generally review and consider updating and revising your estate plan every 3-5 years. Major life events happen in some cases that would adjust your initial plans, and having a regular practice to review your documents every three to five years ensures that you will not pass over any of those necessary changes. Some examples that trigger those needs are provided below.

Also, it is important to note that certain documents are not recognized by certain institutions if they are too far outdated. A good example of this is your Financial Power of Attorney, which grants a person of your choosing to make financial decisions for you should you ever become incapacitated, Most banks have stopped accepting these if they are more than three years old. If any one of your documents are not accepted out of your Legacy Estate Plan, it could lead to costly means of obtaining those necessary rights related to that particular document.

This could trigger the need for a Guardianship or a probate depending on the circumstances. Either option can be an extreme waste of your hard-earned estate. This is why we strongly emphasize the importance of regularly updating your documents.

2. You Retire or Move to a New State.

One of the best things about Arizona, where we practice, is that it has so many great retirement communities and so many wonderful things to do. You will not get rained out of that round of golf, trip to the Grand Canyon, or hike around here.

But just as Arizona’s desert and mountains are unique, so are its trusts and estates laws. Because each state in the Union has its own somewhat unique laws when it comes to drafting and executing estate planning documents like wills, trusts, powers of attorney, and health care documents, this means that although your properly drafted estate planning documents might function in a new state, your estate could have extra hurdles to overcome. So the best practice if you have moved or recently retired, is to have your estate planning documents reviewed and revised if necessary.

3. You Get Divorced.

This one is a complete life-changer. All the people in your life change. And so do most of the documents in your life as well.  Just as you will need to change the names on your savings accounts and credit cards, after a divorce you need to change your Last Will and Testament. That is because some states have laws that say your prior last will is invalid if it gives part or all of your estate to your former spouse, but other states may still enforce your will. Which makes it important to consult with experienced counsel in the state where you live. If you do not make a new will after you get divorced, it means that your ex-spouse could still inherit your property.

4. The Death of a Child or Spouse.

This heartbreaking change in your life also triggers the need to change your estate planning documents.

Why? Because your child or your spouse are generally your beneficiaries.

The death of a beneficiary is one of the biggest problems that can happen if a will or revocable living trust (“Living Will”) hasn’t been updated. When a beneficiary dies before the testator (the person who made the will) or the settlor (person who made the trust), what happens to the beneficiary’s share in the estate? Well, that all depends on what your will or trust says. Which is why, in the event of the death of one of your beneficiaries, you need to update your will or trust–because you will need to decide anew who should get that portion of your estate.

These are just a few examples of when you need to change your estate planning documents. There certainly are many other life events when you need to, or it is a good idea to, revise or update your estate planning documents.

Feeling a Bit Overwhelmed? We Make it Easy for You.

We are experienced trusts and estates attorneys. We offer free consultations. Our offices are located in Sedona, Arizona but we serve Verde Valley and all of Arizona. We can help you with all of your estate planning needs. Call us at 928-282-1483 or contact us here.

Without question, divorce is a painful and overwhelming process. Paperwork, custody battles, attorney’s fees; the list of tasks and emotional rollercoaster can seem to be never-ending.

But just as important as signing the divorce papers and working out custody, after a divorce, you must make changes to your estate planning documents.

“X” Your Ex Out of Your Will.

While most divorced people would agree that the last person they want to get their property or to make life and death decisions for them is their “Ex,” people often overlook updating their will or health care documents after a divorce.

That is exactly what will happen if you do not update your estate planning documents after a divorce. Unless you change your will and other necessary estate planning documents, in some states, your Ex will still inherit your property.

Change Your Beneficiary Designations.

Assets like life insurance policies, IRAs, annuities, etc. that let you name a beneficiary, are not controlled by your will or trust. Instead, they get paid directly to the person that you have named as your beneficiary.

While you were married, you probably named your Ex as your primary beneficiary.

After a divorce, it is important to change the beneficiary designation to someone else.

Consider Setting Up a Trust For Your Children.

One of the problems that arises after divorce if you have children is that if you have named them as beneficiaries and they are minors when you die, a court guardianship will be established for them until they become 18. As soon as they turn 18, however, your children will receive the entire inheritance. (And just might spend it by the time they turn 19.) The court could name your ex-spouse as the person to manage the funds until that time.

To avoid this, you might try to name someone else as the beneficiary with the understanding/promise that this person (your friend, your parent, your sibling) will use the money for the care of your children until they are old enough to handle it themselves. But what are the chances this person really will do as you ask?

One of the ways to solve this problem is to name a trust as the beneficiary instead, and select your own trustee (which could be that trusted person). A trustee can be held liable if he/she misuses the trust assets. This solution lets you keep your ex-spouse from having access to the money and control when your children will inherit. Even better, money that is in a trust is protected from irresponsible spending by your children and from creditors or even spouses.

Divorce can be stressful and exhausting, but planning for your new future doesn’t have to be. We are here to help you every step of the way. One of the best things you can do after divorce is to update your estate plan to provide for your future and the future of those you love.

Get Started Today!

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. Contact us to set up your free appointment.

No one can say what tomorrow will bring. But one thing is for sure: one day, for all of us, life comes to an end.

So ask yourself, when death comes to you, what will happen to those you leave behind? Will they be left to scramble, argue among themselves and guess at what you wanted and who gets what? Or will they know, and be able to come together in their grief to help each other move on with their lives and loving memories?

Here are 5 reasons why, no matter what your age or stage of life, you should not put off getting your Legacy Estate Plan any longer.

1. Protect the Future for Your Loved Ones.

Having a Legacy Estate Plan protects your loved ones. It can eliminate confusion, expensive delays, family fights, and overall bad outcomes following your death. When you have an estate plan that directs who gets what, and which appoints someone to be in charge if you become incapacitated, you can prevent family discord and costly legal expenses. In addition, a Legacy Estate Plan can help you plan for and take care of any adults or children in your family with Special Needs.

2. Avoid Probate.

No matter what your age, another good reason to have a Legacy Estate Plan lies in its ability to reduce the delay and costs caused by probate. If you die without a will, your entire estate will have to go through the court process of “probate.”  This is an expensive and time-consuming court process that you (i.e. your estate) will have to pay for, thereby reducing the amount you leave your loved ones. Worse, probate  will not only subject your loved ones to the expenses and delay of the court process, but it means that some judge – not you – will be making all the decisions about who gets your property and/or who will raise your children.

3. Make Sure Your Life-Support Wishes Are Known and Will Be Followed.

When you make an estate plan, part of what you do is fill out necessary documents that anticipate your end-of-life needs. By executing certain Health Care documents and Powers of Attorney, you decide who will make important financial and medical decisions on your behalf if you become incapacitated. Because we cannot see the future, it is important that every adult over 18 decide before it is too late, what level of medical intervention you want at the end or your life or if you should become unexpectedly incapacitated.

Making these important decisions now, will ensure that your wishes are followed and that you, and your family suffer as little as possible

4. Protect Your Little Ones.

If you have children, it is especially important that you plan now, because you want to be the one who decides who will watch over your minor if you should die unexpectedly. You know best who will love, protect and watch over your children if you die. You don’t want to leave this decision to some probate judge. But that is exactly what will happen if you die without an estate plan. The judge will decide who will raise your children.

5. Peace of Mind.

When you have an estate plan in place, you have peace of mind. You know that you have done your best to make sure that your goals, needs and desires both for yourself and those you love, are in place and have been taken care of.

Young or old, now is the best time to start planning for your estate’s distribution.

We Can Help.

We are estate planning attorneys. We personally prepare all the documents you need. We have offices in Sedona, Arizona. We serve all of Arizona. We offer free consultations and we can help you with your estate planning needs. Call us at (602) 540-1499 or Contact us to set up your free appointment.

When you are browsing through the art galleries in Uptown Sedona, do you ever stop to wonder, if you buy that stunning original artwork, knowing your husband is going to absolutely kill you when he finds out how much it cost, what would happen to it if you die without a will?

It is a question worth thinking about.

The Laws of Intestacy.

If you do not have a will when you die, that is called dying “intestate.”

If you die intestate, any assets that you own alone, in your own name, will pass on to your relatives according to Arizona’s intestate succession laws.

Other assets that you either co-own with your spouse, or are transferrable on death, or are in a trust, or have a beneficiary assigned to them (like an IRA, or 401K, or insurance) are not affected by the intestate laws.

But who gets what of your solely-owned property when you die intestate can get pretty complicated. That is why it is best to consult with experienced trusts and estates attorneys and have a Legacy Estate Plan designed for you, or, at the very least, a will.

Very briefly, how your property is distributed under the intestacy laws depends on whether or not you are married (and/or were married before), have living children, parents, or other close relatives when you die.

Here is something to think about: if you do not already have a will and you have descendants (children, grandchildren, great grandchildren) from a previous marriage, your half of any property that you hold with your current spouse as “community property [property acquired during marriage] with right of survivorship,” will  not go to your children, grandchildren or great grandchildren, but will automatically go to your current spouse.

Also, if you were married before and have stepchildren, even if you love them dearly and want them to get your half of your community property (without survivorship rights) or your separate property, unless you legally adopted them, they cannot inherit from you without a last will and testament that allows for such an inheritance.

These are just two points to think about with regard to intestate succession. There is a lot more to know about intestacy and many more reasons why you do not want to have your estate distributed through the intestate succession laws.

Do you have  Questions? Speak with a Trusts & Estates Attorney!

If you want to make sure your treasured property goes to the ones you love, contact us.

We are experienced trusts and estates attorneys. We offer free consultations and we serve all of Arizona. We can help you provide and plan for your loved ones. Call us at 928-282-1483 or you can reach us by email here.

Everybody loves a bargain. On the other hand, as the old saying goes, “you get what you pay for.” But when it comes to something as important as your estate planning, you don’t want to be “penny wise and dollar foolish.”

Let’s take a look at a couple of reasons why using online document services (or other cheap services) to prepare your estate planning documents is a bad idea.

1. There Are No “Do-Overs” With Estate Planning.

First, it is important to keep in mind that you do not get to fix mistakes made in your estate plan once it goes into effect. In other words, when you die, it is too late to make changes or fix mistakes in your plan.

That means that if the documents the online service or other cheap, non-attorney source you used to do your will or trust are incorrect or do not comply with your state’s laws or are outdated or fail to follow all the required legal formalities, or have not covered all the contingencies in your situation— your wishes will not be followed, and your family is out of luck.

There will be no one to help your family and no way to change your inadequate/erroneous documents.

Your assets will not go to the people you wanted them to go to, or, worse yet, your entire estate will be subjected to the time-consuming and expensive probate system. Ultimately, your estate will end up spending more time and money than you would have spent if you had consulted with knowledgeable estate planning counsel.  

2. Online and Non-Attorney Document Providers Are Not Lawyers.

There is a reason why most lawyers who practice in this area do only trusts and estates law.

Can you guess what it is?

It is that estate planning is a complex area of law. It takes years to develop an expertise in estate planning. As an American Bar Association article on the issue of whether it is advisable to do your own estate planning puts it, “An estate planning lawyer provides more than technical expertise in drafting complicated documents.  Most have extensive experience in counseling clients in these most intimate decisions.”

Online document services and non-attorney estate planning services do not have this level of expertise or experience counselling clients.

How could they? They are not attorneys. They merely fill out forms.

Yet the impression most online document services try to create in the minds of consumers is that they are attorneys and that their documents are similar to those of an attorney. They stress how their documents are cheaper than what it would cost you to hire an attorney. Well, there is a reason why attorneys charge more. Attorneys get paid for what they know.

Online document services only know how to fill out forms. They are not lawyers. They are not law firms. They do not know what a trusts and estates attorney knows and they cannot give you legal advice. If your family has special needs or if you are about to make a huge mistake, these services cannot advise you or warn you. Indeed, it would be a crime (practicing law without a license) if they did so.

So do not be fooled by the marketing attempts they make to look like legal counsel. All online document services or other non-attorney services can do is what any well-trained monkey could do: fill out a form.

3. Generic Online Forms Are…Well, Generic.

Finally, because the online document providers are not attorneys, they have to make sure that their documents are pretty much “fool proof.” That way it is difficult for individuals who buy their documents to make mistakes when filling them out.

What that means, however, is that the documents online services and other non-attorney services provide are generic documents that apply to everyone and anyone. They are not customized. They are simply one-size-fits-all generic documents.

Online or do-it-yourself estate planning tools do not take into account your particular circumstances and they are not intended for your unique  situation. For example, certain situations— such as the needs of blended families, protecting an estate from Medi-Cal recovery, disinheritance, or protecting inheritances for beneficiaries that require ongoing trusts (Special Needs Trusts, asset protection trusts, support trusts)—require careful thought and preparation and are best handled by experienced counsel.

Sure, there might be occasions when saving money or doing things yourself makes sense. But creating a solid estate plan is definitely not one of them.

We Are Here for You.

We are experienced trusts and estates attorneys. We offer free consultations, and we serve all of Arizona. Our offices are located in 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.

You may know that an estate plan is a good thing to have. You might even realize that estate planning is important. But have you ever considered the benefits you get from having an estate plan?

Here are  just 3 benefits of estate planning that you may never have thought of:

1. Keeping Assets in Your Family.

A Legacy Estate Plan can ensure that your assets stay in your family. For example, if you do not have an estate plan and your child divorces his or her current spouse, half of your assets could go to the spouse.

If you do have an estate plan, you can set up a trust that can ensure that your assets will stay in your family.

If you are a blended family, it may be just as important for you to make sure that your assets go to your children, stepchildren, grandchildren or other beneficiaries.

2. Keep Your Finances Out of the Public Eye and Protected from Creditors.

A major advantage to having a Legacy Estate Plan is that it can reduce estate taxes and the unnecessary costs of probate. Without a plan, your estate may be subject to the delays and costs of probate and your finances will be a matter of public record. With a Legacy Estate Plan in place, you can avoid probate entirely and reduce estate taxes.

Not only that, but with a Legacy Estate Plan, you can hold your assets in trust for your kids or other loved ones, and those assets are protected from creditors. This means that if your kids or others you have provided for file for bankruptcy, the money you have held in trust for them will not be a part of the bankruptcy proceedings.

      3. You’ll Die Happy.

Ok, maybe that’s putting it a bit strong, but you will certainly die the way you want to, because a Legacy Estate Plan includes the execution of healthcare documents  that allow you to specify whether or not you want to be kept alive artificially, and certain Powers of Attorney that allow you to nominate someone you trust to make financial and medical decisions on your behalf if you become incapacitated.

You can also direct where you want to be buried and/or whether you want to be cremated etc.

Most important of all, executing a Legacy Estate Plan will give you peace of mind because you will know that all your arrangements have been made and nothing is left to chance.

When you have a Legacy Estate Plan, you can be assured that your family will be taken care of. With a comprehensive plan in place, you will do much to prevent family discord and costly legal expenses and will ease the burden on your family.

Get Started Today!

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. Contact us to set up your free appointment.

In estate planning, the two main tools we use are wills and trusts. One of the reasons why it is best to have your will prepared by competent counsel instead of using a form or online document service, is to prevent a will contest.

Exactly what is a will contest, you ask?

Good question.

Contesting a Will.

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

In order to challenge a will (to “contest it”), however, there must be grounds for believing that the will is invalid.  In other words, somebody cannot just challenge a will because he doesn’t like the amount of his inheritance. There must be some basis for believing that the will is invalid.

There are a number of grounds for contesting a will. For example, if there is reason to believe that someone unduly influenced the decedent to make or change the terms of his or her will, that can be grounds for a will contest.

Another ground commonly asserted is that the formalities of making the will were not complied with, so the will is invalid. Each state has its own rules concerning the specific requirements that must be met for a will to be valid, which is why it is important to consult competent estate counsel.

Who Can Challenge a Will?

Another limitation to will contests is that not just anyone can challenge a will.

In order to legally contest a will, the person challenging it must have “standing.” Standing requires that you have an interest to gain from the will and that you somehow are harmed by the terms of the will as it is (which is why you are challenging its validity).

Generally, the people who have standing to challenge a will are the spouse or heirs of the decedent. Again, however, because state laws vary on who has standing to contest a will, you should consult counsel.

Why Challenge a Will?

The reasons for challenging are a will are, as we said, because it is somehow invalid.

If the person contesting the will wins, the entire will or a specific provision of it, will be invalidated. If the entire will is invalidated, the decedent’s estate will be distributed according to the intestacy laws.

Will contests are time-consuming and expensive. They should not be undertaken without careful consideration and preferably only after consulting with counsel.

To prevent others from contesting your will, it is important to have your will drafted by competent, experienced counsel.

We Can Help

We are estate planning attorneys. We personally prepare all the documents you need. We have offices in Sedona, Arizona. We serve all of Arizona. We offer free consultations and we can help you with your estate planning needs. Call us at 928-282-1483 or Contact us to set up your free appointment.

A lot of people think that estate planning is only for the wealthy. This just not the case. No matter what size estate you have, it is important that you have an estate plan for during and after your life. In fact, while the wealthy may have more property to protect, estate planning can be even more critical for those with smaller estates.

Why?

Because very often it is more important for those with smaller estates to better manage what they have. In other words, you simply cannot afford to lose any part of your smaller estate.

Planning to Avoid Estate Taxes and Probate Costs.

The value of estate planning cannot be overstated.

One major advantage to having a Legacy Estate Plan lies in its ability to create an asset protection plan, avoid the unnecessary costs of probate, and to create a lifetime estate plan. A lifetime estate plan covers the importance of granting an agent, typically a friend or a family member, the rights to manage your healthcare and financial decisions in the unexpected circumstance that you become incapacitated.

Under such circumstances, a Legacy Estate Plan would prevent the additional costs of guardianships and conservatorships which are necessary without lifetime estate planning. If you do not appoint your healthcare and financial agents, then they will end up spending thousands of dollars (anywhere from $3,000-$5,000) setting up guardianships and conservatorships to be granted that authority to manage your healthcare and financial decisions.

For example, if a married couple has an estate worth  $10,262,834.00 at the end of 20 years which grows at 6% rate every year, and both spouses die within one year of each other at the end of this 20-year period, not having an estate plan could cost their children $2,565,134.00 in federal estate taxes and $121,814 in unnecessary probate fees. With a proper estate plan in place, however, the cost of paying estate taxes as well as the additional cost and delay of probate proceedings could have been avoided. On top of this, an estate plan would ensure that their assets will go to their beneficiaries in the manner they choose.

Avoid Leaving Your Family in a Mess.

Another reason why estate planning is critical for big or small estates, is because it can help you avoid leaving your family in a complete mess when you die. Having an estate plan will go a long way towards avoiding unnecessary probate costs, chaos, and family fights over who gets what when you die. When you have an estate plan that directs who gets what and how, and which appoints someone to be in charge if you become incapacitated, you can prevent family discord and costly legal expenses. Instead of burdening your grief-stricken family at the worst possible time, you will be easing the way for them and sparing them additional emotional turmoil.

Don’t Know Where to Start?

Don’t worry. 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. Contact us to set up your free appointment.

Ever wonder what documents you need to make an estate plan?

While there are many different types of legal documents that can help you plan how your affairs will be handled in the future, there are 5 basic documents that any estate plan should include.

At a minimum, every estate plan should include:

1. A Last Will and Testament or a Trust. A “will” is a legal document that states your final wishes and gives instructions about how to divide up your property when you die. Your will directs the manner in which you want your property distributed and to whom.In some circumstances, a trust might better fit your needs.There are many things to think about when drafting your will. For example, people with children from a previous marriage may need to consider if they want those children to receive something. Or, do you want disinherit someone? Who do you want to administer the terms of your will? In other words, who will be your personal representative (also called an “executor” or “executrix” in many states)? All these questions and more must be answered and spelled out in the will.

2. Financial Power of Attorney. This legal document authorizes someone of your choice, whom you trust, to handle financial matters for you if you become incapacitated or too sick to handle them yourself. It allows the person with the “power” to sign checks, pay bills and even sell real estate on your behalf.

3. Healthcare Power of Attorney.This document gives someone of your choice the legal authority to make medical decisions for you if there ever comes a time when you cannot make those decisions for yourself.

4. Mental Healthcare Power of Attorney. This document is Arizona specific, so if you are coming from another state where your estate plan was originally drafted, then take note that you most likely need to add this document to your plan. This will allow (or disallow) your healthcare agent, usually the same person you chose in your healthcare power of attorney, to put you in a mental healthcare facility of two psychiatrists determine that it is absolutely necessary for your well-being.

5. Living Will. Often called a “heath care proxy” or “advance care directive,” this document is vital (see our post on the Terri Schiavo case). A living will gives your instructions regarding what type of medical intervention or treatment you want in the event you become terminally ill or incapacitated (coma, Alzheimer’s etc.). This is the document that tells the doctors whether or not to “pull the plug.” It lets you choose whether or not you want feeding tubes or extreme measures taken to keep you alive.

It is important that you have these 5 documents at the very least and it is important that they are current, up-to-date, specific to the laws of your state and properly drafted.

We Can Help.

We are estate planning attorneys. We personally prepare all the documents you need. In our custom-tailored Legacy Estate Plans we include even more documents to make sure we have set you and your family up to be protected in every possible scenario that could arise. We have offices in Sedona, Arizona; and we serve Verde Valley and all of Arizona. We offer free consultations and we can help you with your estate planning needs. Call us at (602) 540-1499 or Contact us to set up your free appointment.