Estate planning is an important part of life. Even if you don’t have the resources to share or leave behind your loved ones in case of your demise. While everyone understands the importance of planning your estate, there are simply a lot of legal techno-babble that is confusing many individuals. The whole point in planning your estate is to save your loved ones the hassle of going through the tedious process of probate. As such, whether you have millions worth of property to distribute to your family and heirs or millions worth of debt, you simply have to plan for the eventual.
In order for you to make the correct decision as to how best to approach your estate planning in Arizona, you need to differentiate intestate, will, and trusts first.
In Arizona, if you die without a will there are circumstances and state statutes that will govern whether a court process [called a probate] will need to be filed so that your assets will be legally distributed and your debts paid. If the process is required and you left no will in which you nominated someone you trusted to serve as your administrator [personal representative] the legislative statutes in Arizona will dictate according to priorities set forth by the state who may be appointed. This appointed personal representative will be the person who will follow state statutes in dividing up your estate among rightful heirs and you will not have had an opportunity to make any bequests to any special relative or friend. There is the possibility that some of your assets will go to relatives you did not wish to benefit from your assets. The costs associated with a probate will be paid by your estate. Sometimes this process is a short process and sometimes this process takes a long time. It all depends upon how diligent you were in taking care of your estate during your lifetime. In order to ensure your assets go to those whom you want to benefit from your estate you need to give serious consideration to having a will so that your wishes are followed upon your death. With a will and more importantly with an estate plan you can accomplish want you want and not what occurs when you die without a will or estate plan.
Supposing you don’t have a spouse anymore, the probate court will divide your estate among your legitimate children. If you have children who are under the age of legal maturity, they will not gain access to their inheritance until they have reached the age of maturity. During this time their inheritance will be managed by a guardian until they are ready to assume responsibility for their share. Unfortunately, if the guardian does not have the best interest of your minor children to heart, then your children might become victims of unscrupulous activities.
Remember that once your estate has been made public, you are more prone to fake creditors who would like to get a share of your wealth. This is why it is very important to plan your estate so that you will not die intestate.
Creating a will before you die is one way of ensuring that your heirs will get the inheritance that they truly deserve. Here, you are in control of who will receive how much. Typically, for your underage children, you can assign who will serve as their guardian until such time that they are old enough to obtain their rightful inheritance. Unfortunately, this is as far as a will can protect you and your loved ones. Understand that, in your demise, your estate will still have to undergo probate process. If you have creditors, then they will also have to be paid first. This is essentially the role of the probate court – to make sure that all of your creditors are fully paid before your estate can be distributed to your heirs according to your will. Technically, you are still at the mercy of unscrupulous individuals posing as fake creditors.
If you want to protect a significant portion of your estate against your creditors while ensuring rightful inheritance to your children, creating a trust is the way to go. Here’s the thing about trusts. These are legal instruments that allow you to manage your assets even while you are still alive. Understand that in order to bypass the probate process upon your demise, you need to have your trust adequately funded which can be done by re-titling some of your assets in your trust’s name.
Trusts are a great way to protect your estate from being preyed upon by unscrupulous fake creditors as it no longer has to undergo the probate process. Understand that trusts are private and as such are not subject to public scrutiny. While it is quite impossible to put all of your assets under a trust, at the very least, you will provide your children the security of their inheritance.
For better understanding of which legal instrument is best for your situation, it is always better to seek legal advice preferably from a Scottsdale estate attorney who deals with estates, trusts, and wills. Only then will you appreciate the magnitude of your decisions.
Virtue Law Firm
Scottsdale, AZ 85251