Sharon Ravenscroft Estate Planning Blog
What if I don't have a Will?
Protecting Families with an Estate Plan.
Most people think of Wills and death when they think of estate planning. However, the distribution of assets after death is only one issue to be considered. Financial accounts and property all have legal title requirements. Financial institutions and title companies will not release assets unless the legal requirements are satisfied.
Finances are not the only concern proper access to health care, without court involvement is also important. The courts are having a harder time handling the sorts of cases where persons are incapacitated or die and do not have effective documents.
The Last Will and Testament is the written document that sets forth how a person wants assets distributed upon death. Without a Will, assets will be distributed to heirs in the preference set out by the Arizona Revised Statutes. For persons married to someone who had children before the marriage, step-children will inherit one-half of the community property unless the deceased spouse has a Will leaving assets to the surviving spouse.
The Will is the document that sets out the guardian of minor children. The guardian takes care of the well being of a minor child. While the conservator takes care of the finances of a minor child. Sometimes the guardian and the conservator is the same person. However, sometimes the best person who would be guardian has children of his or her own, and so a conflict of interest is created. Each family has a different set of circumstances to consider.
Often the Will "pours over" the assets to a trust for a minor child created under a Revocable Trust agreement created when the parent is living. If a parent does not have a trust for child, then the court must get involved when there is more than $10,000 involved. The court oversees funds for the child, restricting investment choices and releasing the money when the child is 18. With a trust, a parent can choose who will oversee the funds, how to invest, use and distribute the funds delaying distribution to 21, 25, 30 or more. A Revocable Trust agreement is the preferred way to handle assets held in 401k's, IRA's, life insurance, real estate and other investments.
A durable power of attorney is a written document which names an agent, who is given authority to act on behalf of the principal (the person creating the power of attorney) in regard to finances and business decisions. Without a power of attorney for finances, if a person becomes incapacitated, no one has legal authority not even a spouse, unless a court appoints a guardian.
A financial power of attorney is durable if it remains in effect even if the principal becomes incapacitated. The principal can still revoke and change the power of attorney at any time, as long as the principal has capacity.
A health care power of attorney allows a person to nominate an agent who can give consent to and oversee health care if the principal is unable to give consent. Married persons benefit from health care powers of attorney because it enlarges the types of health care that can be approved by a spouse as well as giving the spouse legal preference as to other family members or friends. Without a health care power of attorney, a spouse cannot approve mental health care assistance and could have to coordinate care with parents. Without mental health care provisions or a health care power of attorney, court involvement in most cases is necessary, and then privacy and control is compromised.here ...