FAQ- Estate Planning
Outlined below are answers to some frequently asked questions regarding estate planning. If you have additional questions, please call to speak with one of our attorneys. We will provide you with a free telephonic consultation to assist you with your matter.
Q: What is estate planning?
A: Estate planning is the process of creating instructions for your loved ones to tell them what you would like to have happen if you die or become disabled. Among other things, estate planning documents can address the following questions:
- Who would I like to give my main assets to when I die?
- What personal items would I like to give to different people if I died?
- Who should raise my minor and/or disabled children if I died or am no longer able?
- How old should my children be before I let them have large sums of money?
- Who would I want to have manage money for my children before they are old enough to be responsible?
- Would I want to be kept alive on machines if I were in a coma? What about if I were pregnant?
- Who would I want to make decisions regarding my medical care if I can no longer make my own decisions?
- Who should I trust with my finances while I am alive, but unable to manage them for myself?
- Do I wish to be an organ donor?
- What are my desires as far as burial and/or cremation?
As there are so many issues to think about, it is important that your documents are properly drafted and executed so that they provide clear instructions as to your wishes.
Q: What happens when I die if I have no estate plan?
A: If you have no estate plan, there are laws in Arizona that direct where your property shall be distributed. Contrary to popular belief, the State of Arizona does not receive your assets if you do not have a will. However, the following are guaranteed to occur if you do not have an estate plan:
- If your children become entitled to any assets, they will receive the assets when they turn 18 (regardless of their ability to manage large sums of money)
- A court will need to decide who receives custody of your minor and/or disabled children if both parents are deceased
- The desires you have orally expressed as to distribution of your property or your burial wishes are not likely to be followed
- If there are two or more people that have the same right to serve as the Personal Representative (also known as executor or executrix) and they can’t agree, then the Court will have to get involved
- Your estate will pay for the costs of probate and attorney’s fees for any disputes the Court needs to settle
Q: What happens if I become disabled and can no longer deal with my own finances?
A: If you are disabled and cannot deal with your own finances, someone will need to establish a conservatorship over your financial affairs. Obtaining a conservatorship will cost approximately $5000.00. Alternatively, executing a financial durable power of attorney or preparing a living trust ensures that a conservatorship does not become necessary. It is much less expensive to prepare documents now than to pay for a conservatorship later. Please see our FAQ on guardianship/conservatorship proceedings for more information.
Q: Can my spouse make my health care decisions for me?
A: Yes. Arizona law determines who can make your health care decisions if you do not have a health care power of attorney. The individual with the highest priority is your spouse. However, most health care institutions will only allow a spouse to make health care decisions for their spouse during an emergent circumstance and will require a Power of Attorney or a Guardianship for long term care decisions for an incapacitated spouse.
Q: Can my spouse deal with financial matters on my behalf?
A: It depends. If you are married, your spouse will continue to have access to jointly titled accounts. However, your spouse cannot sign on your behalf for financial matters where your signature would be required. For example, if your house is up for sale and you are comatose, your spouse cannot sign the sale documents for you. Your spouse cannot sign your name for filing your income taxes. Your spouse has no right to obtain information on any financial account unless your spouse is also the owner of the account. A financial power of attorney will give your spouse or an other trusted individual you’re the authority to deal with those matters if you cannot.
Q: Why do people spend time and money to set up an estate plan?
A: They care about their loved ones and don't want to create unnecessary work and expense for their loved ones if they become disabled or pass away. The primary purpose of estate plans is to document your wishes and desires so that your family does not need to guess and/or argue about what you would have wanted. If Terri Schiavo had a simple living will, ten years of litigation would not have occurred.
Q: Why can’t I use a will form that is on the internet or a bookstore? Why should I pay an attorney?
A: You can. Unfortunately, most form documents that you can find on the internet are for simple wills and do not address needs that are particular to you. Many documents you will find on the internet do not comply with the laws of many states. Improper wills can lead to estate litigation especially when your will is vague or does not address certain issues. An attorney will make sure you contemplate all contingencies and will ensure that your wishes are followed by drafting the proper documents.
Q: Do I need a trust?
A: It depends. Trusts can accomplish many things such as avoiding probate and ensuring that someone has continued authority over financial matters in the event of your disability or death. Trusts are also used to direct how funds should be held for minors and can also result in estate tax savings if you have a taxable estate. In some states, attorneys take percentages of an estate for probate, which can result in attorney’s fees that far exceed the cost to set up a living trust. In those states, trusts are beneficial as they result in less costs overall. In addition, where there is real property in multiple states, trusts are almost always less expensive than paying for probate in multiple states. Finally, when an individual wishes to provide for a disabled family member, a trust is the best avenue to accomplish proper management and oversight of the funds to be held for the benefit of the disabled family member.
