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Death Probate

Death & Taxes: Plan for Both

By | Attorney Andrea Claus, Beneficiaries, Death Probate, Estate Planning, Estate taxes, Taxes | No Comments

Most folks don’t look forward to planning for two of life’s guarantees: death and taxes.  However mundane or morbid you view this task, there is planning to be done no matter what your station in life. When properly planned the harshness of both death and taxes can be mitigated.

Through my experience as an estate planning attorney, I have outlined five basic areas that you need to consider when implementing your plan:

  1. Select an estate administrator: The administrator is the person who is in charge when you pass. This should be a responsible person with the time and acumen to carry out your wishes.
  2. Select your beneficiaries: These are the people and/or charities that will get your stuff upon your death. If you do not designate beneficiaries via a trust, will, TOD designation, or other method, the state will dictate who gets the stuff from your estate.  Whatever planning tool you use should be accessible by your estate administrator.  Used properly, that the right tool can minimize taxes and provide asset protection to your beneficiaries; it is a good idea to discuss your strategy with an estate planning attorney.
  3. Asset inventory: This is a list of all the stuff you own (like bank accounts, life insurance policies, real estate . . .). When you die, your estate administrator will need to know what you have and who to contact to collect and distribute.  Creating a list of physical and non-physical items that you own will ensure that no asset is left uncollected.  This inventory should be accessible by your estate administrator upon your death.
  4. Asset review: After the inventory is complete, the beneficiary designations and/or titling of all accounts or policies should be reviewed to ensure that they are in line with your wishes. This is also a good time to consolidate assets for ease of management, if you’re able.  Bringing the account statements, deeds and policies to your estate planning attorney will help you align your wishes with how the titling and beneficiaries read.
  5. Create a debt list: Much like the assets inventory, you should make a list of your debts. If the administrator knows what debts will need to be settled upon your death, distribution of your estate can be accomplished more quickly and efficiently.

These five basic considerations can make life easier for your loved ones and for your administrator.  Your asset inventory and debt list are also a good tool to help you get a grip on your current expenses.  Discussing your goals with an estate planning attorney and reviewing your plan is the best way to ensure you’ve addressed all issues unique to your estate.

andrea-claus  Contributed by Morris Hall PLLC Phoenix , Prescott Estate Planning Attorney, Andrea L. Claus.

 

About Morris Hall, PLLC:
At Morris Hall, PLLC we have focused our legal practice on estate planning for over 45 years.  Along with estate planning, our attorneys help clients and their families with matters of probate, trust administration, wills, power of attorneys, business planning, succession planning, legacy planning, charitable gifting and other important legal aspects.  We also have divisions in financial, real estate and accounting to help you incorporate all of your planning together, ensuring that everything works perfectly for your needs and situation. Our Arizona offices are located in Phoenix, Mesa, Scottsdale, Carefree, Tucson, Oro Valley, Prescott, Sedona, Flagstaff and Arrowhead.  Our New Mexico offices are located in Albuquerque, Las Cruces and Santa Fe.  Contact us today at 888.222.1328 to schedule an appointment!

This blog should be used for informational purposes only.  It does not create an attorney-client relationship with any reader and should not be construed as legal advice.  If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation

Why You Need a Living Trust

By | Beneficiaries, Death Probate, Estate Planning, Healthcare documents, Living Will | No Comments

This is the second piece of a four-part series on why you need a living trust.  As mentioned in my previous blog, I recently read an article from a well-known business publication that provided four reasons why you don’t need a living trust.  The second reason provided by the publication is:

~ Probate doesn’t have to be a nightmare ~

The article points out that many states have streamlined processes for small estates.  In addition, the article states that probate can be beneficial because the process is monitored by the court, which helps ensure that the executor is following the provisions of the will.

Although probate can be streamlined, that is only true for a minority of cases. Many states don’t offer a streamlined process, and others consider a “small estate” to be a total estate value of $5,000 to $10,000.  The truth is - probate is most often a nightmare.

Here are a few disadvantages to probate that the article fails to mention:

  • Probate is expensive. Probate can cost up to 4% to 5% of the gross estate. For example, if you have a house worth $400,000, with $200,000 left on the mortgage, the attorney will base the fee on the $400,000, and not consider there is only $200,000 worth of equity in the home.
  • Probate is public record. This means anyone can view your probate file and have access to your personal information.
  • If you live in a state that has a streamlined process (say with a $100,000 probate threshold), but you own a $75,000 asset in a non-streamlined state that has a $50,000 probate threshold, you will be required to open a probate in the non-streamlined state.
  • If your designated beneficiary is a minor, or is declared mentally incapacitated at the time of distribution, a conservatorship will be required to determine who will manage the beneficiary’s inheritance until the beneficiary is no longer a minor or regains capacity. Upon the minor turning an adult, which in many states is 18 years old, the conservator will have to release the money to the child. Having an 18 year old manage even a small amount of wealth could be problematic.
  • The probate process is monitored by the probate court, but it is also influenced by the court’s schedule; meaning, if the court’s calendar is heavily booked, then you may be waiting a long time for the probate to close. Many probates can take up to 18 to 24 months to complete.
  • More often than not, in a probate proceeding, it means that your loved ones will receive their inheritance as an outright distribution. This means their inheritance will not have any protection from future divorces, creditors, bankruptcies, or taxes. Most of us have worked too hard, sacrificed too much, worked endless hours to see our legacy destroyed or wiped out by leaving everything we have to those we love without any protections. With a living trust, not only can you avoid probate, but you can also ensure that your loved one’s inheritance will be protected after you are gone.

The above examples are just a few of the disadvantages of a probate.  A properly drafted revocable living trust can prevent all of the above-listed disadvantages. Before deciding on whether to create a will or a living trust, contact a qualified estate planning attorney who can help assess what estate planning method is right for you.

darren-richardson  Contributed by Morris Hall, PLLC Phoenix Estate Planning Attorney, Darren L. Richardson.

Why Choose Morris Hall, PLLC:
You have a number of options when it comes to estate planning, so why pick Morris Hall?  First off, estate planning and asset protection are a very complicated endeavor and you should only trust someone who focuses exclusively on those matters.  Also, Morris Hall is a proud member of The American Academy of Estate Planning Attorneys (AAEPA) which provides us additional support, advanced training, tools and information that is not available to others – which means that we can better protect your assets and your loved ones.  We are one of only three firms in Arizona that belong to the AAEPA and are the only firm in New Mexico that has been granted membership.  If you have assets and loved ones that you want to protect, you are in good hands with Morris Hall.  Contact us today at 888.222.1328 to schedule an appointment!

This blog should be used for informational purposes only.  It does not create an attorney-client relationship with any reader and should not be construed as legal advice.  If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.

 

 

 

What Happens if I Die Without an Estate Plan?

By | Attorney Andrea Claus, Death Probate, Trust Administration | No Comments

When a person dies, their assets must be distributed. If a person fails to create a will or trust, their property will pass via the state laws of intestate succession. Every state has a specific set of laws providing a sort of default will.  For example, if a person dies without an estate plan in Arizona, the probate court will first determine whether the decedent was married.   Arizona is a community property state, so there are two kinds of property a married decedent passes when they die: their separate property and a one-half interest in the couple’s community property.  Below is a “nutshell” version of where a person’s property goes when they die with no estate plan:

  • If the decedent was married and had no surviving descendants all of the decedent’s property passes to the surviving spouse.
  • If the decedent was married and had surviving descendants who are all descendants of the surviving spouse, all of the decedent’s property passes to the surviving spouse.
  • If the decedent was married and had surviving descendants, one or more of whom are not descendants of the surviving spouse, one half of the decedent’s separate property will pass to the surviving spouse and one half of the separate property and decedent’s entire one half interest in the community property passes to the decedent’s descendants.
  • If the decedent was not married, or if the decedent’s spouse predeceased him or her, the property will go to the decedent’s descendants. Under the statutes, property is distributed per capita at each generation level.  This means that the shares of the decedent’s property to be passed are determined by the number of descendants at each generational level.
  • If the decedent was not married and didn’t have any descendants, then his or her property goes to surviving parents. If both of parents are surviving, then each parent takes equally. If only one parent is surviving then all property goes to the surviving parent. If no parents are surviving, property passes to the decedent’s parents’ descendants per capita at each generation.
  • If a decedent has no surviving descendant, parent, or descendant of a parent, the property will pass to surviving grandparents, if any, or the grandparents’ descendants. If no one is qualified to claim the property under any of the scenarios listed, the property will pass to the State of Arizona.

This “nutshell” version of the Arizona laws of intestate succession is a very brief overview and does not address the many complexities present in blended and non-traditional families.  The outcome in many cases is not consistent with what the decedent would have wanted.  Creating a proper estate plan ensures that  property passes to whom you want, how you want.  Take the first step- contact a Morris Hall attorney today.

andrea-claus  Contributed by Morris Hall, PLLC Phoenix and Prescott Estate Planning Attorney, Andrea L. Claus.

About Morris Hall, PLLC:
At Morris Hall, PLLC we have focused our legal practice on estate planning for over 45 years.  Along with estate planning, our attorneys help clients and their families with matters of probate, trust administration, wills, power of attorneys, business planning, succession planning, legacy planning, charitable gifting and other important legal aspects.  We also have divisions in financial, real estate and accounting to help you incorporate all of your planning together, ensuring that everything works perfectly for your needs and situation. Our Arizona offices are located in Phoenix, Mesa, Scottsdale, Carefree, Tucson, Oro Valley, Prescott, Sedona, Flagstaff and Arrowhead.  Our New Mexico offices are located in Albuquerque, Las Cruces and Santa Fe.  Contact us today at 888.222.1328 to schedule an appointment!

This blog should be used for informational purposes only.  It does not create an attorney-client relationship with any reader and should not be construed as legal advice.  If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.

Why You Want to Avoid Probate

By | Death Probate, Estate Planning, Living Probate, Other, Probate | No Comments

Have you or a loved one ever gone through a probate? Here are five reasons why you would want to avoid Probate.

  1. Lose your privacy. Probate proceedings are available to the public and will be published in a local newspaper. Anyone can gain access to your personal information through the courthouse.

  1. Time Consuming. Probate proceedings have the potential to be very long in duration. On average, a probate can last from 9 months to 2 years.

  1. Assets are Frozen. During the Probate process your assets are frozen until the process is over. If the market is good to sell real property, the probate process has to be over before the property can be sold.

  1. Probate can be costly. Besides your estate paying taxes and creditors, there are many fees associated with probate. These fees include attorney fees, personal representative fees, appraisal fees, and court fees. Probate fees vary from state to state, but on average it can range from 3-6% of the value of your estate.

  1. Probate could happen more than once. If you have property in more than one state, your estate will have to go through probate in each state. This means you will have probate fees in each state as well.

Wendy-Harn-PhotoContributed by Morris Hall, PLLC Tucson and Oro Valley Estate Planning Attorney and Partner, Wendy W. Harn.

Why Choose Morris Hall, PLLC:
You have a number of options when it comes to estate planning, so why pick Morris Hall?  First off, estate planning and asset protection are a very complicated endeavor and you should only trust someone who focuses exclusively on those matters.  Also, Morris Hall is a proud member of The American Academy of Estate Planning Attorneys (AAEPA) which provides us additional support, advanced training, tools and information that is not available to others – which means that we can better protect your assets and your loved ones.  We are one of only three firms in Arizona that belong to the AAEPA and are the only firm in New Mexico that has been granted membership.  If you have assets and loved ones that you want to protect, you are in good hands with Morris Hall.  Contact us today at 888.222.1328 to schedule an appointment!

This blog should be used for informational purposes only.  It does not create an attorney-client relationship with any reader and should not be construed as legal advice.  If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.

Should You Make End-Of-Life Plans on Your Own?

By | Death Probate, Estate Planning, Living Probate, Other, Planning Ahead: One Week at a Time | No Comments

Another term for an estate plan should be a “legal vault”. The legal vault should be strong and sturdy to withstand any attack that may come against it. The question becomes, is your legal vault flimsy or solid to withstand what comes its way?

For some people, establishing an estate plan appears to be straightforward, simple and not requiring the guidance of an estate planning lawyer. For others that started off with this mindset, come to understand what was once simple, has turned into a complicated mess.

As with household repairs, some repairs can be fixed by the homeowner after a quick trip to the hardware store. The same is often said of estate planning - a trip to the office supply store with fill in the blank documents can be a quick cheap fix. However, here are just a few reasons why a trip to see an estate planning lawyer would be most helpful.

  1. Customizing a will – the online template fill in the blank documents don’t give much room for adding special language. Altering a will provision could possibly invalidate the entire will.
  2. Avoiding/minimizing death, income, and capital gains taxes.An estate planning lawyer can guide you through the various estate planning options to minimize and/or avoid the death tax that could come your family’s way upon your death. For example, a Revocable Living Trust is a common tool that is crafted to fit your individual goals and needs. Also, proper planning to minimize other tax implications of income and capital gains taxes.
  3. Avoiding a living and death probate. There are two types of probate that an estate planning lawyer can help you and your family members avoid – one while you are living, but unable to make your financial and healthcare decisions; and the other after you pass away and your assets need to be distributed with the least cost and delay. An estate planning lawyer can also help you with other legal tools, such as Powers of Attorney and a Living Will.
  4. Keeping your estate plan updated with law changes. Estate planning laws are constantly changing and an estate planning lawyer will be able to share those with you as they happen. It’s important to keep your plan up to date as your life changes, but also with the law changes that occur.

When you think of your legal vault, consider it anonymous with your legal legacy. You have worked hard to build your legacy, and we at Morris Hall, PLLC are here to make sure it withstands any storm that may come your way.

Wendy-Harn-Photo  Contributed by Morris Hall Tucson, Oro Valley, Green Valley Estate Planning Attorney and Partner, Wendy W. Harn.

What the Attorneys of Morris Hall, PLLC Can Do For You:
The attorneys at Morris Hall have 100’s of years of combined experience ensuring that families’ assets are protected from probate, unnecessary taxes, creditors, ex-spouses and Medicaid spend-down.  Our Arizona offices are located in Phoenix, Mesa, Scottsdale, Carefree, Tucson, Oro Valley, Prescott, Flagstaff and Arrowhead.  Our New Mexico offices are located in Albuquerque, Las Cruces and Santa Fe.  Contact us today at 888.222.1328 to schedule an appointment!

This blog should be used for informational purposes only.  It does not create an attorney-client relationship with any reader and should not be construed as legal advice.  If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.