Sun City Estate Planning Blog

Many Arizonans put off estate planning until it's too late. There are many reasons this occurs, but one of the most prevalent is the fact that most people simply want their spouse and their children to inherit their estate. However, depending on the circumstances at hand, an individual who passes away without a will or other estate planning documents may have his or her assets distributed in a way that works counter to his or her intentions.

An individual who passes away without an estate plan is said to have died intestate. When this happens, the states intestate succession laws kick in. The purpose of these laws is to distribute an estate in a way that the average person would find agreeable. Therefore, assets will generally be left to a surviving spouse. However, matters may change if the deceased is survived by parents, there is not spouse, and/or there are children from different marriages.

Estate planning can be as simple or as complicated as is necessary to meet an individual's identified needs. For some, a basic will with easily understood provisions is enough to bring their estate planning goals into reality. Others, though, require much more detailed documentation. This may be due to their high net worth, or it may have to do with the restrictions they wish to place on their estate's assets upon passing. Either way, estate planners need to ensure that they fully understand the legal ramifications of all the legal agreements they enter into.

Those who fail to be diligent when entering into contracts can find that seemingly unrelated agreements can have an effect on their estate plan. For example, an agreement between an individual and a cooperative or a homeowners' association may contain terms that affect a revocable trust. This is especially true if the property itself is being transferred to the trust at the time of purchase.

There are two major traditional estate planning vehicles that most people utilize: the will and the trust. Each has its own advantages, and many people utilize some combination of both. This week on the blog we want to take a closer look at wills and the benefits they can provide to those who use them.

To start, a will can provide peace of mind. This is because an individual who has a will knows that when he or she passes away his or her assets will be distributed according to a plan that is laid out in that document. Those who don't have a will when they pass away may have their assets distributed in a way that goes against their wishes. This latter form of distribution will be in strict adherence to the law, which may or may not conform to one's desires. Also, an individual can utilize a will to dictate who will care for any surviving children.

Trusts are common tools used in estate planning and can be utilized to distribute assets with certain conditions attached to them. For example, assets maybe left to a beneficiary with strict rules that the proceeds of the assets contained within the trust can only be paid out when the beneficiary turns a certain age. There are a wide variety of trust types, each with their own benefits. This is why it is imperative that those engaging in estate planning fully discuss their estate planning options with an attorney of their choosing.

One trust option available to estate planners is the irrevocable trust. As its name implies, this type of trust is created by an estate planner and, once property is transferred to the trust, that transaction cannot be undone. Therefore, an estate planner cannot place a business or a residence into the trust and then later withdraw it. So, why would anyone want to create an irrevocable trust?