We recently wrote about the trouble Aretha Franklin's estate is having due to the recent discovery of a number of handwritten wills. These documents can be problematic for a number of reasons. Oftentimes it's unclear who is being named as a beneficiary or heir. Also, the terms of trusts are vague or ambiguous. Other times there are contradictory terms. Each of these issues can present problems when the will is supposed to go into effect. Under such circumstances, untangling the testator's intentions can be a nightmare. In other cases the will is deemed legally invalid.
Many Arizonans think of wills as simple documents they can utilize to dictate how their assets will be distributed upon their death. While this is true in a broad context, these estate planning vehicles can be quite detailed, and they are automatically legally valid. Instead, estate planners need to be careful to ensure that their wills are abiding by applicable laws unless they want to risk their assets falling into the wrong hands.
If Sun City residents have heard of the estate-planning debacle surrounding the estate of famed singer Aretha Franklin, then you know just how dangerous it can be to forego estate planning altogether. Yet, even mediocre estate planning can prove problematic. It can threaten to tie an estate up in probate for a long time, draining the estate of resources, wasting loved ones' time, and causing familial strife.
Wills are usually the most basic form of estate planning. They can be relatively simple in nature and easy to create for Sun City residents. Yet, a 2017 survey found that 58 percent of Americans have not created any estate planning documents. This is a staggering number, especially considering the grim reality that the assets of many of these individuals may be passed down in a way that is counter to the deceased individuals' wishes. This can cause significant financial hardship for those who may have been an intended heir but was not accounted for in an estate plan.
Generally speaking, the more assets an individual has the more detailed his or her estate plan needs to be. The same holds true when there are multiple heirs in play. While most people focus on divvying up their personal property, familial home, and bank and retirement accounts, others need to consider matters such as what to do with a business. If this matter isn't appropriately addressed, a business can be susceptible to poor ownership and management.
It's no secret that the estate planning process can be scary. It requires you to contemplate your own passing, and it forces you to take a hard look at your assets and your estate's financial health. This is enough stress to cause most people to procrastinate when it comes to estate planning. However, as we discussed in last week's post, dying without a will and other estate planning documents can have tremendous consequences, including undesired distribution of assets and excessive costs.
Previously on this blog we have discussed certain estate planning tools that can be utilized to address issues that are less often thought of during the estate planning process. While most people are familiar with wills and trusts and will use one or a combination of both of these to dictate how their estate will be distributed upon their death, these are not the only documents that are important when creating an estate plan. We have previously looked at the healthcare power of attorney, which names an individual to make healthcare decisions in the event of incapacitation. This week we briefly want to touch on the living will.
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.
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.
Some people spend a lifetime saving and obtaining assets. When you boil it down, estate planning is about retaining control over your assets even after you pass away. For many Arizona residents, this means figuring out a way to best provide those assets to loved ones so that they can enjoy those assets for a long time to come. The most thought of, and perhaps the simplest, estate planning tool is the will. In short, a will lays out to whom assets will be left upon death. These documents can be as intricate as needed, but most of the time they are short and straightforward so as to avoid confusion and challenge later down the road.