Law Firm of James A. Robles

Arizona estate planning, asset protection, and injury law firm

Estate Planning

How To Avoid Will, Trust and Estate Litigation

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While wills and trusts may appear rather confusing and more effort than they’re worth, they are invaluable tools to avoid probate court.   These documents may also save your loved ones and beneficiaries from litigation over possessions, land, and assets.  A trust will help to keep any arrangements clear.

In truth, you should try to avoid probate litigation because not only can the process be costly, it can also be time consuming and damaging to personal relationships. Although litigation may resolve a dispute, the parties pay in other costs, that include spending valuable time away from work and family.  The court case could actually cost more than the amount you’re fighting over. For this reason, we recommend that you avoid probate litigation and here are some tips on how:

Call a Professional – The best way to avoid litigation is to consult with a professional and ensure that all your documents are legally binding and enforceable should the worst happen. For example, your some wills don’t hold up after the person passes away.  This could be because it was not properly executed or because some changes call into question the validity of the will.  So calling The Law Firm of James A. Robles will ensure that the documents are proper according to Arizona law and enforceable.

Mediation – If a family member has passed away, it doesn’t necessarily mean that you have to go to court over the will. Instead, you could attend a mediation meeting where both parties attempt to find a middle ground. Although this will still cost money, the cost will be insignificant to the bill that would come with a court case.

Objective Opinion – In continuation of the previous point, always try and get an objective opinion of the scenario. If this isn’t something you can do yourself, get a professional or a third-party who has no involvement in the will, trust, or estate. By doing this, they could find a middle ground that both parties had been blind to.

‘In Terrorem’ Clause – If you want to avoid litigation with your will or trust, add an in terrorem clause which means that anybody who objects will immediately sacrifice their gift. Of course, this clause isn’t worthwhile if the gift is small but will act as a deterrent if the gift is large enough.

Capacity Test – After getting a major document drawn up, get a capacity test from your doctor as this will let everyone know that you were of sound mind when making the decisions. Then, it will be harder for anyone to contest it because there is no way anyone can use your state of mind as an excuse.

Professional Mediated Meeting – With wills, trusts and estate plans, this can be a great way to go about things because it allows family and friends to stay in the loop in a professional forum. Rather than gathering everyone at your house, the recipients and beneficiaries will all be in the same room whilst in the presence of lawyers and other professionals.

So there we have it, some simple tips to avoid litigation. As long as you keep these in mind, you and those around you can stay clear of this costly exercise.

Do I need a Health Care Power of Attorney?

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Like with your house or any other property you own, you may appoint a health care power of attorney (HCPOA) who will make critical decisions regarding your health. When correctly established, you will be named as the ‘principal’ and you may choose your ‘agent’. When it comes to health, they are potentially the most important decisions that we have to make and so appointing a HCPOA that we trust can be pivotal for when we are no longer able to make such decisions. If you happen to be in a poor state of health, your trusted ‘agent’ will be able to make decisions on your behalf judging by discussions you may have had previously.

Determination of Powers – What power does the agent hold if you’re unable to make an important decision and to what extent do you have a say over these powers? Nowadays, you will always have a say over your health and health care as long as you are of a sound state of mind. When you appoint a HCPOA, this doesn’t change and you can grant the powers with which they will be given in any given circumstance.

Furthermore, you can provide as much detail as you want, cancel your HCPOA if you’re of a sound state of mind, and even appoint a backup agent just in case the primary agent cannot or will not make a decision. Generally, the following decisions will be in the hands of your health care POA agent:

• When life-sustaining treatment should end
• What treatments should be declined due to personal or religious reasons
• Life-sustaining treatments and any decisions that comes along with the process
• What to do after you pass away
• Whether your tissue and organs are donated for therapeutic purposes or your body will be given to medical research

Many of these topics are quite broad, therefore, we advise to provide as much detail as possible. Your agent should be aware of exactly what you want in each circumstance. In addition to being able to cancel or assign a backup, you can also set a time limit on the HCPOA. You may choose to appoint an agent for life.  However, some choose to appoint an agent until a certain age so it all depends on your beliefs and what your main aim of the agent will be.

A health care POA is essentially the same as any other power of attorney but addresses your health and medical care, not your financial or business decisions. You control the time you remain in this ‘agreement’ as well as assigning a backup and cancelling at any point in time.

What are Living Wills?

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When people hear the phrase ‘living will’, they assume that it is a different kind of normal will that divides property after death but this simply isn’t the case. If you haven’t yet looked into living wills, now could be the time because it could just be one of the most important documents you sign.

As mentioned, livings wills don’t look post-death but instead the health care or treatment you receive when ill or not able to make decisions. By drawing up a living will, it lets everyone know your wishes in terms of treatment for end-of-life medical care. Otherwise known as an advanced directive or a directive to physicians, it allows you to communicate your decisions when you aren’t physically able to do so. In terms of its use, this document is truly invaluable as it gives guidance to friends, family members, and medical professionals. Rather than having to guess which route you would choose to go down, they will have the guidance needed to make an informed decision. As a living will describes the actions taken for end-of-life care, it has no power after death.

Creating a Living Will – When drawing up this important document, there are two main options – bringing in an attorney or making your own. However, each state is different as to where to go from here. In Arizona, you will have to sign the document in front of one witness or otherwise it must be notarised. If you choose to go for a witness, they must not be a relative, provide you with health care, or be a part of your division of estate in a regular will. If you choose to have the will notarised instead, the notary cannot be someone providing your health care nor can it be your health care agent.

As soon as you follow this step, the document becomes valid and you will need to keep the originals. If you named a heath care agent, they will need copies of the document. To ensure that the living will is utilised in the appropriate circumstances, you may also want to give copies to your physician, insurance plan, trusted friends and family members, and even your hospital.

Every so often, you will want to review your documents to see if they still apply and to see if you still agree with the wishes previously stated. If you move state, you will need to ensure that everything is still in place for your wishes to be put into place. Regardless of where you are, the document will be legal until you decide to withdraw them and remove all copies from the relevant bodies. Of course, the easiest way to draw up a living will would be to contact a professional in Arizona as this will ensure that all the requirements have been met and all the appropriate people receive a copy.

Keeping Track of Beneficiary Designation Forms

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As you pass through life, you will have undoubtedly filled out some beneficiary designation forms. Whether you’re purchasing a new life insurance policy or simply opening a new bank account, this simple document states to whom the money should be passed if you happen to pass away. Over time, you may forget about certain accounts and who the beneficiaries are which is why it is important to review your beneficiary designation forms often. As long as you keep track of these forms, your money will end up with the desired beneficiary in the event of your passing.

Life Insurance – Overall, this is one of the easiest to change and you can do so by simply updating your beneficiary designation form. After doing so, you should always phone your insurance company to ensure that it all passed through correctly. Remember, you may have smaller insurance policies through work or personal ventures so you will have to update them individually.

Bank Accounts – With most bank accounts, you will be able to make the most of a ‘Transfer of Death’ designation form. With this set up, your desired beneficiary will simply have to take your death certificate into the bank and they will have access to your funds. Often, this is the preferred method because it doesn’t require a specific name and you won’t have to review it every few months.

Health Insurance Savings – To prevent your estate from being billed the medical costs, ensure that your heirs have access to your health insurance savings. For up to a year after you pass away, your family and friends will be able to use these funds to pay for medical expenses.

Retirement Funds – Over the years, we tend to accumulate a number of different retirement accounts and they each have a beneficiary designation form. If this is the case, you will need to maintain these accounts and ensure that you always have the right name on them. If you find it hard to keep up with them all, why not roll all your accounts into one Individual Retirement Account (IRA) to have just one beneficiary form and one name?

Trusts and Wills – Despite popular belief, the names on your individual accounts will actually override what is stated in your will so it is important to review these documents often.

Too often, families are left with a mess of a financial situation and family members don’t get the money or possessions they feel they deserve. For this reason, keeping track of your beneficiary designation accounts is one of the most important things you can do. As long as you remember to keep on top of them and check them often, they will remain in order and the correct money will be left to the correct person.

Estate Planning and Marriage

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If you have never heard the term ‘estate planning’ before, you will want to carry on reading this because we are going to offer some fantastic advice. If you have recently gotten married or have been married for a while without estate planning, you need this information even more. Even if you happen to fall into the latter category, don’t worry because we have all the information you will need.

What is Estate Planning? – At its core, estate planning describes the process we complete in order to create numerous documents that explain where our estate goes after death. By utilising three main documents – durable power of attorney, last will and testament, and a health care directive – you can ensure that your estate gets distributed exactly how you plan after passing away.

Why Do I Need These Documents? – If you don’t do any of these plans and leave these documents untouched, you may be leaving your partner and potential children in the dark and they may not have access to your estate after your death. With these plans in tact, your estate will be left with your partner and your children and you will be ensuring their future.

Furthermore, you will also be reducing the amount of tax they will have to pay after you pass away if you plan everything early and have it all in order. If you don’t have these documents, a significant portion of the estate will be taken in tax and various other costs. If you want your partner to have the most money possible, you will need to have the three documents in place.

Estate Planning and Marriage – After you get married, your legal status changes in a number of ways and it affects how you earn, save, and are taxed with money. As a spouse, you can file joint taxes, share property, share income, get recognised as a married couple on a governmental level, and more.

As you grow as a couple, you will start to involve one another with decisions and this should also be true for estate planning. Whether it is how you want to be cared for at the end of your life or simply the distribution of your assets, these are important decisions that you need to share with your spouse. In addition to this, you need to discuss who will the guardian of pets and children, whether you should jointly own property, and who will be bequeathed individual gifts. By doing this, you can remove the need for probate and ease the pressure on loved ones after you pass away.

Summary – All in all, estate planning is vital in a marriage because it ensures that one of you will have a future should the other pass away. Rather than getting dragged into various financial issues and losing money to tax, you will both have everything planned for a stable future. No matter how hard it may seem to think about and how far off it seems, this is something that needs to be done!