Robert W Jones Legal Blog

Regrets often come in the form of having not planned enough ahead of time. Maybe you always wanted to go sky-diving but that crucial step of planning out the event kept getting put off till later -and later never came. The same principles can be applied to retirement and having an estate plan and your financial affairs in order. By having a plan setup early you can avoid now having regrets in the future.

As more and more Americans reach retirement age every day, many often find that their new lives can lead to some regrets. If you have yet to reach retirement age and are creating your estate plan there are several issues associated with retirement you may want to consider as you make your planning choices.

By Massih Law, LLC

The term probate, in Old English, means “to prove”. Probate can play a huge role in estate planning because a family will be exposed to probate when a family member dies, a family member becomes incompetent or a minor child inherits property. The legal process of probation involves administering the estate of a deceased person by establishing the validity of a will and carrying it out.

Estate planning can be a difficult road to navigate on your own. If you try you could be be needlessly losing money because of little-known benefits that an estate planning attorney would be privy to. One such benefit is highlighted in today’s article regarding mitigating estate tax through a qualified personal residence trust.

By Roy Litherland

Home ownership has long been the foundation of wealth building in the United States. If you are like most Americans, your home is your single most valuable possession. As a result, if you were to reduce the taxable value of your home you could go a long way toward mitigating your estate tax exposure.

No Will or Trust 

In Arizona, the state creates a will to designate who gets the assets when decedents don’t leave one. It can take up to three years in court.

If the decedent had a spouse, the spouse is entitled to all assets, even if they had children together. When the spouse is from a second marriage and the decedent had children from a first marriage, a portion of the assets goes to the children first and then to the spouse, Allen said.

When there isn’t a spouse the assets go to the children. When no spouse or children exist, assets go first to grandchildren, then parents, siblings and nieces or nephews.

Burying Bodies

More Arizonans are preplanning funerals, Mesa funeral director Meldrum said.

For example, parents will often pre-plan their own funeral to take the burden off their kids. “It’s a wise thing, when death does happen people don’t think clearly,” Meldrum said.

People can even authorize their own cremations, he said.

Pre-planning a funeral involves selecting a mortuary, discussing burial options, determining how much money can be spent and how the costs will be covered. Funeral directors often work with clergy to plan religious-based services.

Communication is essential with all death planning, financial consultant Bottle said.

“Not just in writing, although that’s absolutely crucial, but I encourage my people doing estate planning have a family meeting to hear their intentions” he said. “It reduces conflicts.”

Reference: “The Business of Dying”. Tribune-Business. Michelle Swafford. 7/21/2002.

Revocable Living Trust

Assets are registered to the trust. When beneficiaries inherit property or cars, they inherit them subject to any outstanding loans against them.

For married couples, when one party dies the assets are divided, but it’s common for the surviving spouse to have access to the deceased spouse’s assets. After the assets are divided, those designated as the decedent’s are generally not subject to the survivor’s creditors in a lawsuit.

Whether people choose a trust or will, it’s important to destroy older versions after they update it, Gibney said.

Trusts, wills and beneficiary documents need to be constant, said Blake Bottle, financial consultant with Innovative Financial Solutions in Phoenix. Often times, a will says one thing and real estate titles and insurance policies sometimes designate others, he said.

Joint Ownership

Another way to give assets to family members now and avoid probate court later is to own assets jointly. There are risks involved with joint ownership.

Husbands and wives who own joint assets have few risks, but anyone else can incur risks such as adverse tax consequences and shared liabilities, Allen said.

For example, if a man deeds a home to himself and his daughter and she gets into an accident, the person who sues her could come after her assets as well as the home, which the man co-owns, Allen said.

Assets such as checking accounts and property ownership can have beneficiaries designated to them. Then the assets automatically transfer to the beneficiary upon death and it’s less risky than joint ownership and there can be a tax benefit, Allen said.

Reference: “The Business of Dying”. Tribune-Business. Michelle Swafford. 7/21/2002.

Experts say preparing for your passing is vital

by Michelle Swafford TRIBUNE

Upon death, a will goes to probate court to confirm it’s validity and appoint the personal representative named in the will. Probate court cases usually take about a year to complete and are filed as early as six days after death. Uncontested probate court costs about 2 percent of the value of the assets, Allen said.

Larger estates tend to cost 3 percent to 5 percent, Gibney Said.

The price covers attorneys’ fees, court costs and publication fees.

“If there’s a contest it can’t be estimated how much it will cost,” Allen

said. “It’s just expensive.”

When people with wills die, their personal representative is required to publish a legal notice in a general circulation newspaper where the person resided, telling creditors they have four months to come forward.

“We can’t publish on the sly in an inconspicuous place and hope to wash away the creditors,” Allen said.

They are not required to publish in all newspapers if there are multiple in the area either, he added.

If it is known the decedent owed money to a certain credit card or bank, the personal representative should send a notice to them.

Once creditors submit a claim, the claim can be disallowed if the decedent doesn’t have enough money in the estate. Then the burden falls on the creditor to file a lawsuit against the estate to get paid, Allen said.

The problem with wills is that they are contested easily in probate court and there may be more than one will, Gibney said.

Reference: “The Business of Dying”. Tribune-Business. Michelle Swafford. 7/21/2002.

Deciding to meet with an estate planning attorney is an important step towards getting your affairs in order. And, since the goal of the meeting is to be prepared for the future, it is important to additionally be prepared for the meeting. Having certain documents and information handy will make setting up an estate plan easier for you and your attorney and will waste less time for both of you.

By Julie Garber

OK, so you’ve finally decided that it’s time for you to meet with an estate planning attorney, but what’s next? You can do one of two things: (1) Wait for the meeting date, or (2) Get yourself organized and prepared in advance of the meeting. Can you guess which type of prospective client I prefer to meet with?

Getting yourself organized and prepared for your first meeting with an estate planning attorney will go a long way to making the meeting more productive and valuable for both you and your attorney. Otherwise, the meeting will be like a fishing expedition for your attorney and tedious and confusing for you. Here are some tips on how to get yourself organized and prepared for your first meeting with an estate planning attorney:

Read the full article here http://wills.about.com/od/youandyourattorney/qt/meetingwithanestateattorney.htm

Probate is a lengthy and complicated process, which is why so many advice articles are spent explaining what you can do to avoid the entire probate hassle. The article below details what to expect from the probate process. As you read you will see that having to deal with probate is best left as a last resort and having a proper estate plan in place will avoid this. Be sure to read our other articles on this blog explaining how to plan for your estate to avoid probate.

Probate usually works like this: After your death, the person you named in your will as executor — or, if you die without a will, the person appointed by a judge — files papers in the local probate court. The executor proves the validity of your will and presents the court with lists of your property, your debts, and who is to inherit what you’ve left. Then, relatives and creditors are officially notified of your death.

Your executor must find, secure, and manage your assets during the probate process, which commonly takes a few months to a year. Depending on the contents of your will, and on the amount of your debts, the executor may have to decide whether or not to sell your real estate, securities, or other property. For example, if your will makes a number of cash bequests but your estate consists mostly of valuable artwork, your collection might have to be appraised and sold to produce cash. Or, if you have many outstanding debts, your executor might have to sell some of your property to pay them.

In most states, immediate family members may ask the court to release short-term support funds while the probate proceedings lumber on. Then, eventually, the court will grant your executor permission to pay your debts and taxes and divide the rest among the people or organizations named in your will. Finally, your property will be transferred to its new owners.

To learn more about the probate process–and reasons for avoiding it–see Nolo’s article Why Avoid Probate?

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Is it worth your while to avoid probate? The short answer is yes. Planning your estate properly and carefully in order to avoid the probate process invariably will lead to saving money in the long run. Probate laws vary from state to state so it is important to get information from a professional about how your state specifically handles probate law. The article below summarizes 8 ways to avoid dealing with the hassles of probate.

Probate’s problems have been well documented and well publicized. And if you’ve experienced the probate process firsthand, after the death of a parent or spouse, you probably don’t need any convincing that avoidance is the best strategy. But in case you still aren’t sure why planning to avoid probate is worth some effort, here are some factors to consider.

Where you live makes a big difference. Some states have adopted a law called the Uniform Probate Code, which simplifies probate court proceedings. In these states (check the appendix to see whether yours is among them), probate is likely to be simpler, quicker, and cheaper than in states that cling to the old-fashioned ways. The whole process is just paperwork, with no court hearings. Some other states have also simplified their probate court procedures.

Your family situation makes a difference. Probate usually entails notifying the deceased person’s heirs—that is, the people who would have a legal claim to inherit if there were no will. (This is true even if the person does leave a valid will.) That’s usually not a problem if there’s a surviving spouse or children, because they would inherit everything under state law. But if the deceased person was elderly and didn’t leave a spouse or any direct descendents, it can be an unexpected headache to try to locate heirs. The executor may have to track down long-lost aunts and uncles and their offspring—people no one in the family may have heard from in many years.

Probate is a waste of money. The cost of probate varies widely from state to state, but it’s commonly estimated that probate attorney, court, and other fees can eat up as much as 5% of the value of property left behind at death. As a result, that much less goes to the people or charities you wanted to get it. If the estate is complicated or disputed, the fees can be even larger.

Probate’s cost might be justified if the process really did something for families. But in most instances, there is no conflict, so there’s no need to be in court.

For example, say a man leaves a will that gives everything to his widow and children, as is common. No one is challenging the validity of the will, and the family is perfectly willing to pay whatever bills he left and divide up the property according to his wishes. Why have a lengthy court proceeding, formal notification of relatives and creditors, and expensive publication of death notices in the “legal notices” column of a newspaper? The property merely needs to be handed over to the new owners, which is what probate-avoidance methods let you do. The successful use of living trusts and other probate avoidance techniques by millions of Americans is convincing evidence that if probate were gone, we wouldn’t miss it.

Lawyers’ fees, set by statute or local custom, often bear no relation to actual work done. Courts are supposed to keep an eye on fees, but in practice they very seldom intervene. And lawyers are almost always paid first—before the beneficiaries.

Some people slog through probate without hiring a lawyer, but in most states the system does little to encourage them. Just finding the right court can be a challenge. Depending on where you live, your will may be headed for Surrogate’s Court, Orphans’ Court, Circuit Court, Superior Court, or Chancery Court. Encouragingly, more probate courts are now putting good information and forms on their websites. And in a few states, good do-it-yourself materials are available; for example, Nolo publishes How to Probate an Estate in California , by Julia Nissley.

Probate takes too long. It depends on where you live and what you own, but it’s not uncommon for probate to take a year, during which time the beneficiaries generally get nothing unless the judge allows the immediate family a “family allowance.” In some states, this allowance is a pittance, only a few hundred dollars. In others, it can amount to thousands. In any case, the family is forced to ask a court for use of its own money—a demeaning and absurd situation.

Delay can be more than an annoyance; it can cause major life disruptions. A student about to enter college may not be able to if a parent’s assets are tied up in probate for months or years. A surviving spouse may not be able to move to take a new job. And it’s especially hard to run—or sell—a small business with the court looking over your shoulder.

Probate is public. Few people ever stop to think that a will—a very personal document, which may reveal much about both financial and family circumstances—becomes a matter of public record after its writer dies. Like all other probate documents, wills are examined and filed, and can be inspected by anyone who goes to the courthouse and asks.

If you’re rich or famous, you can count on public scrutiny. In any bookstore, you can find books of nothing but the wills of famous people; Michael Jackson’s will popped up on the Internet almost instantly after it was filed in court. Obviously, few people generate intense public interest—but if you’re well known in your community, reporters may sniff around just to see if there’s anything they consider newsworthy. And con artists have been known to use public records to gather information about surviving family members who might be vulnerable to scams.

If, on the other hand, you arrange for your property to pass outside of probate—via a living trust or payable-on-death bank account, for example—the transaction is private. No documents are filed with a court or other government entity; what you leave to whom remains private. (There is one exception: Records of real estate ownership are always public.)

Each state requires a court proceeding. The only thing worse than regular probate is out-of-state probate. Usually, probate takes place in the county where the deceased person was living. But if there’s real estate in another state, it’s usually necessary to have a whole separate probate proceeding there, too. That means finding a lawyer in each state and financing multiple probate proceedings. No fun there.

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