Moore Law Firm

Moore Law Firm

9949 W. Bell Road
Suite 201
Sun City, AZ 85351
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Sun City Estate Planning Blog

What does an estate executor do?

Arizonans who are either engaging in initial estate planning or revisiting an existing estate plan have a lot of important decisions to make. Not only do they need to consider how they want their assets to be distributed upon their death, but they have to be diligent about identifying their assets and choosing an individual to administer their estate when they are gone.

The job of estate executor is no small role. In fact, some professionals advise against naming a loved one to the position, as it can be overwhelmingly challenging. After all, there are a number of duties that an estate executor must carry out. The first amongst them is locating and valuating all of the estate's property. This can be especially difficult if an individual held multiple bank accounts, owned multiple properties and/or has a significant amount of personal property. Once this step is completed, then an executor must wrap up the deceased individual's affairs. This could include stopping government benefits, shutting off the cable and heat and paying taxes for the last year that the individual was alive.

Is the AB trust right for me?

Ideally, an individual will have an iron-clad estate plan in place before passing away. This would allow one's estate to be distributed according to one's wishes while at the same time avoiding unnecessary expenses. Yet, we all know that the ideal is rarely achieved, which means that many estate plans have errors that can lead to unwanted consequences. One of the biggest mistakes is failing to create a will prior to one's death.

When this happens, the estate will have to pass through probate. The court will appoint a personal representative to administer the estate, whose duties include valuation of the estate, collecting assets, paying the estate's debts, and handling the expenses incurred by the estate. Then, the estate administrator and the probate court will have to determine who will inherit the estate in accordance with the state's intestate succession laws. Generally speaking, those who are most closely related to the deceased individual will have a better chance of obtaining estate assets.

Should your loved ones have to pay your debt after you die?

Like many retired Arizonans, you have built a sizeable estate that you are pleased to share with your loved ones when you are gone. However, you may also have significant debt that keeps you up at night worrying. What happens if you do not pay all of your debt before you die? Will your spouse, siblings, children or grandchildren be held responsible for your debt?

It can give you great peace of mind to learn that generally, your outstanding debt will not be the responsibility of your loved ones. NerdWallet explains how debt after death is handled:

  • Before your will's executor divides your estate among the beneficiaries, he or she will liquidate assets to repay your outstanding debt.
  • Your spouse would likely continue making payments on marital debt – such as joint credit cards. However, debt that was yours before you married should not be the responsibility of your spouse.
  • Anyone who co-signed on a loan with you would be responsible for taking over the payments.
  • If you leave your home or property to a relative, the mortgage, home equity loans, auto loans or other outstanding debt is theirs to repay, unless they decide to sell the property to satisfy the loan.

Is the AB trust right for me?

There are a variety of tools at one's disposal when it comes to formulating a solid estate plan. In order to ensure that an estate plan is tailored to an individual's unique needs and wishes, they must become familiar with all options available to them and decide accordingly. This may sound easy enough, but the truth of the matter is that the number of options can become overwhelming. This can be especially true with trusts.

One trust option is the AB trust. Often referred to as the tax-saver trust, this legal vehicle allows an estate to avoid estate taxation by utilizing estate assets for the benefit of one's surviving spouse. This means the trust property can be used by the spouse, but he or she does not own it. Therefore, since the property remains in trust and has not technically been transferred, the estate tax does not apply.

How cryptocurrency fits into an estate plan

Our economy is constantly changing. While new markets emerge and old ones fade, even the way we view money is changing. Cryptocurrencies, for example, seem to be gaining some traction amongst the public. These digital currencies are not backed by banks, which means their value can rise and fall based on the value assigned to it by those in the market. This can create big swings in cryptocurrency values that could leave an individual sitting on thousands upon thousands of dollars' worth of virtual money.

While that may sound appealing, and many people do find the ease of use of cryptocurrency, along with it anonymity, appealing, there can be serious consequences when it comes to leaving these assets to loved ones. One major problem is that cryptocurrency is usually only accessed via a security key. Those who misplace these keys, or fail to leave them for loved ones, can wind up having their cryptocurrency being stranded in the digital world.

Arizona firm ready to help with estate planning needs

A will can be a great estate planning tool that seeks to distribute assets after one's death in accordance with his or her wishes. However, the effectiveness of this document is contingent upon its validity. Last week we discussed some of the ways a will can be contested and, ultimately, found to be invalid. The invalidation of a will can have a tremendous effect on an estate, which means that those engaging in estate planning need to make sure that their legal documents are drafted carefully with an eye for every applicable detail.

There are many estate planning tools that you can utilize, not just wills. Trusts and powers of attorney, for example, can each play a significant part in your estate plan. But, again, these documents have very specific requirements that must be met in order to be legally enforceable. When these requirements are not met, then the entire document can be rendered invalid. When this happens, your estate may have to go through the probate process. This can be expensive, time consuming, and ultimately lead to a distribution of your assets that is contradictory to your wishes.

The ways in which a will can be contested

Mustering the courage to confront one's own mortality and engage in estate planning is no small thing. However, merely because some words are put on paper delineating how assets are to be divided upon an individual's death does not mean that its provisions will hold up in a court of law. Although most of us hope that these matters can be resolved without heated disputes, the truth is that this area of the law can see some of the nastiest litigation. To avoid it, Arizonans need to do everything in their power to ensure that their estate plan is as legally sound as possible.

One of the first ways to do this is to recognize common pitfalls, especially as they relate to wills. Wills can be contested in a number of ways. First, a will and its provisions may be deemed invalid if someone proves that the will's creator lacked testamentary capacity. In other words, if it can be shown that the individual didn't understand the true nature of the will, including the value of the property involved and how it was to be dispersed, then the will cannot be legally enforceable.

Navigating the probate process

As you go through the estate planning process in Arizona, you will find that in order for you to pass property to someone else through a will, the property may have to go through probate. The trust and probate administration process can be complicated, but there are pros and cons to the process.

Probate often gets a bad reputation for being expensive and causing delays in the distribution of your assets. Additionally, probate court records are available to the public, so anyone can find out private information about your estate. While some states have made the probate process much easier, particularly for estates of lesser value, some experts still suggest avoiding the probate process if you can. Some assets, such as retirement accounts and annuities, avoid probate by operation of law. Another common way to avoid probate is to transfer assets to a revocable living trust.

A guide to estate planning for online accounts

Creating an ordinary will to determine what happens with your worldly goods is important. Figuring out who gets your real estate, savings and sentimental items is a crucial part of estate planning. However, you should do some estate planning for your digital assets too.

What will happen to your emails and social media accounts after you die? How about your online bank accounts? Read our guide to online estate planning below.

Parents more likely to divide estates unequally in wills

It is sometimes assumed that parents who are going through the estate planning process will divide their property equally amongst their children. However, this is not always the case, particularly when stepchildren are involved. A 2015 study circulated by the National Bureau of Economic Research found that parents with stepchildren may be less likely to distribute property equally amongst all the than parents who do not have stepchildren.

The study found that in 2010, out of the parents over age 50 that reported having wills, 35 percent divided their estates unequally among their children. This is a significant increase from 1995, when the percentage was only 16 percent. Stepparents were 30 percent more likely to plan unequal bequests than those with just genetic children.

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Moore Law Firm
9949 W. Bell Road
Suite 201
Sun City, AZ 85351

Phone: 623-207-9153
Phone: 623-207-9153
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