Estate Planning

We provide estate planning assistance for persons of any age. Our goal is to help ensure that our client’s wishes are carried out with respect to the distribution of the client’s property and wealth upon their death, minimization of estate and income taxation, and avoiding probate through the court system, among other things. The tools used to achieve this goal include wills, trusts and beneficiary designation planning, among other estate planning devices. In addition, we do planning with our clients through Powers of Attorney to ensure that someone is selected to handle the client’s finances in the event that they are not able to do so themselves while they are alive, and also to make healthcare decisions for them in the event of their incapacity. We often work as a team with other professional advisors, such as accountants and financial planners, to ensure the most comprehensive service to our clients.

Frequently Asked Questions

What are the purposes of an estate plan?

The purposes of an estate plan include (i)   planning ahead for the management and disposition of your property while you are alive (including if you become incapacitated), as well as after your death; and (ii) planning ahead with respect to  healthcare decision making  if you become unable to make your own healthcare decisions.

What are typical estate planning considerations?

Before you can implement your estate plan, here are some of the important questions for you to consider:

Personal Representative. Who do you want to name as the personal representative and alternate personal representatives of your estate? Your personal representative is responsible for collecting your assets after death, administering your estate, opening a probate if necessary, distributing property to your beneficiaries, completing your last tax return and paying any taxes and other debts of your estate from your probate assets.

Guardian.  If you have minor children, who do you want to name in your Will as your first and second choices to be the guardian(s) of your children? A guardian is responsible for raising and caring for minor children.

Conservator. If you have minor children, who do you want to name in your Will as your first and second choices to be the conservator(s) of your children? A conservator is responsible for administering and accounting for any property owned by the minor children.

Title to Property.  How should you and your spouse hold title to your assets? Should it be as community property, community property with right of survivorship, joint tenancy or another form?

Healthcare. If you cannot care for yourself, who do you want to make decisions about your healthcare? What are your wishes with regard to the withholding or withdrawal of life sustaining treatment in the event that you are severely disabled or terminally ill?

Property Management. If you cannot manage your financial affairs, who do you want to have the power to manage your financial affairs and spend your money on your behalf?

Beneficiary Designations. Who should receive the proceeds of your life insurance policies and your retirement benefits? Make sure you have properly designated your primary and alternate beneficiaries for all insurance policies and retirement plans, and that those designations are consistent with your overall beneficiary planning in your Will or trust.

Living Trust. Should you create a revocable trust to provide for a spouse or children, federal estate tax savings, asset management or to control property distributions until children are mature enough to be able to manage your property? Leaving property to your beneficiaries in a trust is one of the best asset protection methods money can buy. A well drafted trust can protect a child’s inheritance form the child’s creditors, ex-spouses and bankruptcy, while still allowing the child to have control over the trust and the trust distributions.

A trust is also a good vehicle to provide for a spouse while at the same time ensuring children from a former marriage are also provided for. Estate planning for a married person with children from a former marriage can be complex but it is extremely important to minimize the chances that there will be a dispute between a surviving spouse and the children from a former marriage.

Federal Estate Taxes. Is your estate large enough to be subject to federal estate taxes? If so, what can you do to eliminate or reduce your potential estate tax liability? If your estate may owe federal estate taxes, how will the taxes be paid?

Special Needs Trust. Do you have a disabled child who is receiving public benefits that have financial eligibility requirements? Have you thought about what would happen to those benefits if your child inherited assets from you? A special needs trust can hold your assets that you leave to your child so that they can be used for the supplemental needs of the child not being provided for by the public welfare programs. At the same time, if the trust is drafted appropriately, the assets held by the trust will not be counted in the public benefit eligibility determination.

What documents are included in an Estate Plan?

A basic estate plan typically consists of the following legal documents:

Last Will & Testament. A last Will & Testament is the legal document in which you identify the beneficiaries who will receive your property after your death. The beneficiaries can be people and/or charities or other organizations. The Will also names a person or corporate or professional fiduciary to be your personal representative to administer your estate. Your personal representative manages your estate affairs after you pass away and is responsible to see that your property is distributed as provided in the Will. The Will may also name the guardian(s) of your minor children, the conservator(s) of property that belongs to minor children, make specific gifts of property and include burial instructions. If you do a trust (see below), you should still have a Will, commonly referred to as a pour over will, because assets that are not owned by your trust and that do not have designated beneficiaries will “ pour-over” into your trust after you die. If you do not do a trust though, you still need a Will.

Living Will. A Living Will is a document recognized under Arizona law that allows you to give written instructions about medical treatment that you want or do not want if you are incapacitated to make your own healthcare decisions. Typically, the instructions in a Living Will deal with whether you want to be kept alive on life support if you are terminally ill are in a severe disabling condition such as an irreversible coma, persistent vegetative state, a locked-in state, or if you have advanced brain damage. The most common forms of life sustaining treatment that are referenced in a Living Will are artificial ventilation, artificial food and fluids, cardio-pulmonary resuscitation and dialysis. If you have designated an agent to make medical decisions for you in the event of your incapacity in a Healthcare Power of Attorney then the Living Will can give legally binding instructions to your agent regarding the healthcare you do or do not want.

Durable Financial Power of AttorneyA Durable Financial Power of Attorney, also commonly referred to as a General Durable Power of Attorney is a document in which you (the principal) appoint someone (the agent) to handle your finances for you during your lifetime. This document can be made effective immediately or only upon your incapacity. The document must be “durable” if it is going to be used during periods when you are incapacitated. In order to make the power of attorney durable it will say that the powers survive the principal’s incapacity, or have similar language.  The agent under your Durable Financial Power of Attorney has the legal power to make binding decisions that affect your money, property and other assets. The agent’s duties include managing your investments and property, paying your bills and spending your money for your needs. Without a Power of Attorney, your family may be required to obtain a court-supervised conservator to manage your financial affairs. A Power of Attorney terminates on your death.

Healthcare Power of Attorney. The correct term for this document is “Healthcare Power of Attorney” under Arizona law. However, this document is also commonly referred to as a “Medical Power of Attorney” or “Healthcare Proxy”. This document names a person or persons (the agent) to make healthcare decisions (including mental health care decisions) for you (the principal) if you are unable to make those decisions for yourself. It also grants your agent permission to obtain your medical information in compliance with federal HIPPA laws.

Mental Health Care Power of Attorney. Another type of Healthcare Power of Attorney recognized under Arizona law is a “Mental Healthcare Power of Attorney”.  This document is used to authorize the agent to consent to inpatient psychiatric hospitalization of the principal.  However, it is not commonly known that this authorization can also be granted in a regular Healthcare Power of Attorney. Therefore, in most cases a Mental Healthcare Power of Attorney is not needed unless the individual has a history of mental illness and mental health treatment, and wants to give very specific instructions about mental health care they do or do not want.

Prehospital Medical Care Directive. This document is used to notify emergency medical technicians or hospital emergency personnel that you do not want to be resuscitated if you suffer cardiac or respiratory arrest. It is commonly referred to as a “DNR” or “Do Not Resuscitate” or “Orange Form”. The form is a set forth in an Arizona statute and that exact form must be used for the document to be legally effective. It must also be signed by a licensed health care provider.  The “Orange Form” can be an orange wallet sized card and/or an orange sheet of paper. The wallet sized card can be carried with you and the paper can be placed in your home, most typically on a refrigerator. The document is legally effective in any setting except if you are inpatient at a hospital. This document is not for everybody because if it has been signed it means that emergency medical personnel will not resuscitate you no matter the cause or chances of recovery with resuscitation.

Revocable Living TrustA trust is not appropriate for everyone. It is typically used to avoid probate through the court system after someone passes away, and is also particularly useful for planning when there is a marriage with children from a former marriage that need to be provided for. It is also commonly used when an individual has real property located outside the state of Arizona. Whether a trust is appropriate for a given individual depends on many factors. The cost of doing the trust must be weighed against the cost and hassle to the beneficiaries if a trust has not been done.

A trust is created through a legal document. There are three different types of parties involved in the trust. These include the creator of the trust, the trustee and the beneficiary. The creator of the trust i.e. the person who puts his/her assets under the name of the trust and signs the trust document, is called the “settlor”, “grantor”, or “trustor”. Through the trust document the settlor entrusts his/her assets to be administered by a trustee for the benefit of the beneficiaries of the trust. In a typical Revocable Living Trust, the settlors, trustees and beneficiaries are all the same persons, at least until the settlors either become incapacitated or pass away. The trust provides for management of the assets owned by the trust during the lifetime of the settlors and then after they pass away. Therefore it can act like a Power of Attorney during the lifetime of the settlors and then like a Will by giving instructions as to how the settlors want their trust assets distributed upon their passing.

Do I need a Will?

Almost everybody should have a Will and/or Revocable Living Trust. There are many reasons to have a Will. A Will allows you to direct where your assets will go when you die. You will also be able to select a personal representative to pay your final bills and taxes and distribute the assets to your beneficiaries. Another important reason to have a Will is to protect minor children. A Will can include direction for the appointment of a guardian for a minor child or children. A Will can also include a trust with a named trustee to receive and administer your estate for the benefit of minor children or disabled beneficiaries who are unable to manage their funds and/or who may be receiving needs-based public benefits such as Medicaid (ALTCS) or SSI.

If a person dies without a Will, the laws of intestate succession dictate to whom your assets will be distributed. For some people, this can have unexpected consequences. For example, in Arizona, if a married person dies without a Will, the deceased spouse’s estate will pass to the surviving spouse if the decedent’s surviving children were all born of the most recent marriage. However, if there are surviving children who are the decedent’s children from a former marriage, then all of the decedent’s children receive an equal share in one half of the decedent’s separate property and all of the decedent’s share of the community property. The remaining one half of the decedent’s separate property passes to the surviving spouse, but none of the decedent’s community property goes to the surviving spouse.

Wills must be probated through the court system if the individual has more than $75,000 in all of his/her combined personal property (all property other than land) or if he/she has more than $100,000 in total value in real estate. If the estate is valued at less than $100,000 then the title of the assets can be titled to the beneficiaries through an affidavit process as set forth in the Arizona law, and a court proceeding is not required.

What are the requirements for a valid Will? And is a Will prepared in another state valid in Arizona?

A Will prepared in another state, known as a Foreign Will, is valid if it complies with the Arizona requirements for a valid Will or it was a valid Will under the laws of the state where it was executed. A Will executed in Arizona is valid if it is a written document signed by the creator of the Will, who must be at least 18 years old, and is witnessed by at least two people within a reasonable time after the Will was signed.

A “Holographic Will” is also valid if it is in the testator’s handwriting and signed, even if it is not witnessed.

Is a trust or Will better for standard estate planning for myself?

It depends.

A Revocable Living Trust is a document in which you as the creator of the trust, call the trustor or settler, appoints a trustee (usually you) to manage the trust assets for the beneficiary (also usually you until you die). If your assets are properly titled to your trust, your loved ones can avoid the court probate process when you die. A trust also can avoid estate taxes for larger estates for married persons. Finally, a trust provides more protection than a power of attorney provides from financial exploitation if you become incapacitated. In a relatively simple estate and/where the cost of the trust is a major concern, doing a Will may be a perfectly acceptable option to a trust.