Sun City Estate Planning Blog

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.

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.

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.

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.