Estate planning should be affordable for almost anyone; this means low cost estate packages, and affordable payment options.

Estates

Most people don’t want to think about estate planning until they’re dead.  The very obvious problem with this is, dead people can’t make estate plans.  We understand that estate planning can be a difficult topic for many people, that’s why Civitas takes steps to make you as comfortable as possible.  The first step is that we make house calls, at no additional charge, anywhere in Arizona!  The second thing is that we do not employ anyone that sees our client simply as a number.  We will work with you to help you make important end of life decisions and make sure that your estate documents fit your plan.

Why Estate Planning Is Important

What happens if you were to die without an estate plan?  The government divides the estate for the deceased.  In other words, you can either make an estate plan or your plan is to let the government do it for you.  Maybe that doesn’t sound so bad to you.  For some people, though very few, the government will end up doing what the deceased would have done anyway.  This situation is rare, and it is a major gamble to rely on the government to get your wishes right.  Intestacy laws (laws regarding what the government does when there is no estate plan) vary greatly from state to state, but for the most part the government gives first to a spouse, then to children if there is no spouse, then to parents if there are no children and finally to siblings and others.  Even if this is exactly what you would want to do, you should still have an estate plan.

An estate plan can be written with contingencies in place.  This is important because what might work well today, might not be what works well when it is time to implement your estate plan.  Imagine this, you have a family, maybe a spouse and a couple of kids, and the unthinkable happens.  There is a terrible car accident and you and your spouse are gone.  How sure are you that the government will choose the right guardians for your kids?  Do you want to leave your entire estate to your children, or would you want to try to provide something for the people taking care of them?  This is just one example of why an estate plan needs to be personal and implemented by you during your lifetime.

Wills

Basically, a will is a document that tells the government who to give your property to after you die.  Having a will is a very good thing.  It assures that as long as you do not die with excessive debt and some other variable, your property is eventually going to end up in the hands of the people you want to have it.

The advantages of wills are that they are fairly inexpensive, and they are reasonably easy to modify.  One of the disadvantages of a will is that your estate will go to probate if it is over a threshold dollar amount which varies from state to state.

Probate is the court system that the government uses to verify the will and transfer property from your estate to your future heirs.  Probate costs money.  Not just court fees, which are generally modest, but also attorney’s fees.  There are rules in place that say that attorneys may only charge reasonable fees, but “reasonable” can mean many things to many people.   Probate also can take a considerable amount of time.  Although some probate procedures can be as short as a few days, this is not a guarantee.  What we know for sure is that any estate, that has either a will or no estate documents, that is valued over either $75,000 of personal property or $100,000 of real estate will go to probate in the state of Arizona.  Would you like to avoid probate?  Either read on, or call us today.

Trusts

A living trust can help you avoid probate.  A trust is a document that can transfer property before you die.  You can still use the property just like you do now.  You still have the right to buy and sell property, just like you do now.

This is how it works–imagine you currently hold all your property in your arms.  You pass away, but the property is still in your arms.  A will makes it so that people can come and take the property that you want them to have after they have proven that you want them to have it.  That is a potentially expensive process.  A trust makes it so that you are not holding all of your property.  A trust is like a big safe that you put all your property in before you die.  You can still add and subtract from the safe while you are alive, just the same way you could buy a new house and sell your old one now.  The only difference is that you are buying and selling as the trustee of your trust.  After a controlling event, such as death or incapacitation of the trustee, the person that you name to be successor trustee steps up in your place.  That trustee already has the combination to your safe.  He or she can buy, sell, and distribute proceeds but there is a catch.  The successor trustee can only buy, sell, and distribute in accordance with the trust instructions.  In other words, they can only reach into the safe for a purpose that you have approved!

Perhaps your trust will say, “sell my home and split the money evenly among my children.” Your successor trustee has the ability to reach into the safe, pull out your home, put it on the market, sell it for a fair price and distribute those funds.  Let’s say your trust documents says, “keep my home for five years after my death and allow my youngest child to live there until he has graduated college or for five years, whichever comes first.”  You probably already guessed, your successor trustee will not be able to sell your home until five years after your death or until your youngest child graduates from college.  Unlike a will, a living trust does not require an automatic distribution.

The ability to hold funds is another strength of living trusts.  Some people have beneficiaries with spending problems, or dangerous addictions.  A living trust allows you to give the ability to a trustee to make or withhold distributions.  Let’s say you have a child with a gambling problem.   Your child has been doing a lot better these last few years but still has a relapse occasionally.  Instead of giving this child a full share of your estate, you can give discretion to a trustee to make installed payments.  The payments could be very small over a period of years if that’s what you want.  Maybe you think that a few large payments will do the trick, but you want to give power to your trustee to check and see if your child has been going to gambling rehab before each payment and withhold the payment if he or she hasn’t gone; you can do that too!

A living trust offers flexibility with the ability to avoid probate!  They are the right answer for most people thinking about estate planning.  Call us today to find out if a living trust is right for you.

Other Estate Documents

A great estate plan begins with either a will or a trust.  Whichever one you choose, we provide several other estate planning documents as part of our comprehensive estate package.  Each of the following documents can also be obtained individually if needed.

Durable Power of Attorney:  This document picks up where your trust leaves off (a Pour Over Will does as well).  A durable power of attorney allows an appointed representative to manage property that you either purposefully or accidentally left out of your trust.  If you have a will only, this document is especially important since your representative will have no control over any property until you have passed away.

Pour Over Will:  If you have a will only, you do not need a pour over will.  This document essentially states that anything that is not in the trust before your death or incapacitation, is poured over into the trust at the time of one of those events.  It is important to remember not to rely on this document.  A pour over will must go to probate if the property left to the pour over will is over the probate limits.  In other words, transfer all major property to the trust now and only leave minor property to the pour over will.

Living Will:  A living will is a document that appoints a person to make end of life decisions for you.  Not to be crass, but a lot of people refer to this document as the “pull the plug” document.  It functions as evidence of your desire to either be kept on life sustaining measures (or not) and appoints a person to carry out that wish.  It is important to remember that this document is limited to only those powers.  No other medical decision or powers are granted through a living will.  Which is why the next document is also important.

Medical Power of Attorney: The medical power of attorney allows your appointed representative to make decisions for you if you are not capable.  This includes medical incapacitation and mental incapacitation.  It is also the document that allows you to state whether you want to be an organ donor and gives you the choice to appoint a representative to have you committed to psychiatric care if needed.  This power only comes into effect when you are incapacitated, and the decisions made by your representative must be for your benefit.

As you can see, even if you do not have a lot of property to leave, or if you are not very old, several of these documents could be important for you.  Estate planning is a plan for the “what if” scenario that no one ever wants to think about, but everyone should think about it.  Civitas is here to help.  Call us today so that we can walk you through the process.