The answer depends upon a few factors, such as the size of your estate. As of August 2013, in Arizona, the probate limits are $75,000 for cash, life insurance, investments, etc.; and $100,000 for real estate. If, at the date of your death, the assets in your name are below the probate threshold, there will be no probate. Illustrated below are significant differences between a Will and a Trust.
When a Will is the main estate planning tool, assets must go through the probate process to pass to the intended beneficiaries. In some jurisdictions, the probate process is simple and manageable. The probate process is state-driven with varying rules and procedures governing each state.
The length of a probate can be quite lengthy, often lasting anywhere from 9 months to 2 years, and possibly longer if the decedent owned property in more than one state. During this time, the decedent’s assets are tied up (frozen). For example, if real estate is involved, and a buyer is waiting, the property cannot be sold before the probate process is completed.
A Will is a public document available to anyone who wishes to view it. In Arizona, identity theft is the number one crime. Do you think criminals like Wills? Of course! The criminals have at their fingertips a lot of personal and financial information about the decedent.
The Will only springs up upon death, not incapacity. If the Will is the only estate planning tool and incapacity is an issue, a Guardianship and Conservatorship will generally happen. This is yet another court proceeding which can be avoided if proper Power of Attorney documents are set in place.
In comparison, a Trust is an estate planning tool that properly funded will distribute a decedent’s assets without going through a probate. The terms of the Trust govern who receives from the estate. Unlike a Will, a properly drafted Trust will afford the intended beneficiary creditor protection, divorce protection and Medicaid spend-down protections for their inherited share.
The time frame for Trust distributions is far less than a probate, even with properties in multiple states. The Trust is a private document and not available for the public’s viewing; and the Trust is effective immediately and can be used for incapacity planning.
- Probate process – assets potentially frozen on average 9 months – 2 years
- Effective only at death
- No asset protection
- Administrative process typically bypasses court system
- Effective during incapacity and at death
- Asset protection
The Will and Trust are very common estate planning tools with one purpose – to distribute a decedent’s assets upon death. However, it’s critical to also plan for incapacity. To make sure you and your loved ones are fully prepared, see an estate planning attorney to discuss which estate plan is best suited for you and your family.
For more information or to schedule your free consultation, contact our office today at 888.222.1328.
What the Attorneys of Morris Hall 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. The attorneys also help those in Arizona and New Mexico to apply for and receive Medicaid assistance and Veterans Benefits. Our Arizona offices are located in Phoenix, Mesa, Scottsdale, Cave Creek, Tucson, 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.