What Does the Process of Getting an Estate Plan Involve?

When I meet with my clients, I go over the various estate planning documents and whether a revocable living trust is necessary. Sometimes, a trust is not necessary with the use of a beneficiary deed and other pay on death designations.

Most of my clients come in with the goal of making arrangements for after they die. However, I also like my clients to have the documents which will allow them access to their assets and health care if they become ill or incapacitated. That is, they can their person of choice in charge of their finances and health care.

I like my clients to understand their documents so, at the initial conference, I go over the related issues and uses of the estate planning documents. Also, I include instructive information in the letter that comes with your draft documents and at the signing conference. Finally, I am available to answer questions about the documents and how to use them after the signing. Such calls inquiries are normally free of charge as I normally bill afterwards for documents or research.

From start to finish, the process of getting your estate planning documents involves the following:

Initial conference to discuss needs and explain estate planning documents 

• a Last Will and Testament
• a revocable living trust (particularly if there are minor children involved)
• certificate of trust
• trust asset checklist
• deed for property in trust (sometimes we use a beneficiary deed instead of a trust and deed to the trust depending on several factors; for example if a client has real estate in two different states or planning to leave assets to minors, then a trust is advantageous)
• durable (financial) power of attorney
• health care power of attorney
• health care declaration (living will)
• explanation letter
• A signing conference.

After the signing conference, I can assist with preparing the designated beneficiary forms or other title questions, normally free of charge. If a couple comes in, then each will have a Will, durable power of attorney, health care power of attorney and health care declaration.

I normally can give an estimate as to the cost involved at the time of the initial meeting. The fee for time involved at the initial meeting is normally charged, unless I am not retained. This is because there is a great deal of information obtained during that meeting which is used to prepare your estate planning documents.

My focus is to give you documents that you can use as well as legal advice that is helpful. There are people more expensive and less expensive than me, but the less expensive normally do not give the legal advice that is helpful for using the documents to their full potential.

I usually work in my Sun City office on Mondays Wednesdays and Fridays and in Phoenix on Tuesdays and Thursdays. Appointments can be scheduled through my staff at the Sun City telephone number.

I would be honored to work with you.

If you do an estate plan too, the initial conference and signing conference can be used toward those documents. It is a good idea to be sure to have financial and health powers of attorney when you live with someone, even if you do not name each other. The problem is, that without such documents, if one of you is sick, the other is stuck with limited ability to help with health care and no ability to access finances.

When I meet with my clients, I go over the options of having a trust or not having a trust and I like to focus on educating my clients.

I like my clients to understand their documents so I go over the related issues and uses at the initial conference, in a letter and at the signing conference, and am available to answer questions after the signing free of charge-- only billing for new documents or research.

If the fees seem high, please do not be discouraged. I would be happy to meet with you and discuss your needs and give you an idea of what I think would be most helpful for you. If you decide not to retain me, I will not charge for the initial conference (which lasts about 45 minutes). If you choose to retain me, then the time spent in the initial conference will be reflected in the estimate of fees and the bill.

Protecting a Blended Family with a Property Agreement

When families are blended, a couple needs to look out for the rights of each's natural and step children. A Revocable Living Trust can set out the guidelines of how to distribute the assets to either the survivor or to the the deceased person's children or some combination of both. However, even if a couple creates a Revocable Living Trust together, either one can unilaterally change the terms regarding half of the assets. Therefore, it makes sense for a couple to have a property agreement which can only be changed if both agree.

When a couple is married, the property agreement is referred to as a "post-nuptial agreement." If a couple enters into a property agreement before marriage, the property agreement is called a "pre-marriage agreement." If the couple are cohabiting and not planning to marry, then the agreement is referred to as a "domestic partnership agreement." The terms of these agreements are generally similar and are executed with similar disclosures and representations. However, the statutes and case law that address property agreements normally reference pre-marriage agreements specifically and are applied to post-marriage agreements and domestic partnership agreements by analogy.

These property agreements are not "exit strategies" as they are often portrayed in the media. The goal of the property agreement is that the partners feel comfortable living together; neither feeling vulnerable to losing interest in jointly owned property or relied upon income. These agreements can make sure that estate planning documents, such as a Will or trust, do not have unrealistic goals, and that the survivor is protected as well as the children.

Also, the agreement of how the couple pays expenses and shares accounts can be addressed. This protects both persons in the relationship if one becomes incapacitated and uninformed family members try to change the use of funds or how a business is owned.

Along with the property agreement, the couple should also be sure to have powers of attorney to clarify who has authority to handle issues of finance or health if one of the couple becomes ill or incapacitated.

Protecting Families with a Trust

With all of the changes in tax and investment laws, now more than ever, it is important to have the most cost-effective method of having the right person handle your assets if you become ill or if you die. Revocable Living Trusts are very useful for assuring access to assets due to illness or death.

With only a Will, court involvement in the form of a conservatorship is necessary for any distribution to a minor that exceeds $10,000 in a year. Conservatorships limit the use and investments of the funds and then release the funds when the minor reaches 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 Living Trust agreement is the preferred way to handle assets held in 401k's, IRA's, life insurance, real estate and other investments.

The trust agreement can have provisions which encourage a college education, promote living a drug-free life, and encourage gainful employment. The parent who knows what is best for the child can choose the right person to oversee the child's finances and guide the distributions instead of leaving it to the courts.

Many married couples who have a trust now, have outdated provisions which do not incorporate the Arizona Trust Code which can limit court involvement if there is a dispute; or require that upon the death of one spouse the trust automatically split into two trusts. While having an automatic split can limit estate taxes, in some cases, if the married couple's assets do not exceed the amount that can be passed estate tax free, then the automatic split is not needed. Having two trusts can be more bothersome than helpful, especially when the surviving spouse may survive the deceased spouse by decades. A trust amendment to make the split optional instead of automatic should be considered.

The creator of the trust is referred to as the "Settlor" and is normally also the "Trustee" or owner of the trust assets. The creator is the initial beneficiary of a revocable living trust. If the creator becomes incapacitated or dies, then the Successor Trustee takes control of the trust assets for the benefit of the initial beneficiary or the designated contingent beneficiaries.

When using a trust, the title or ownership should reflect that the Trustees own the property; for example: “John and Jane Doe, as Co-Trustees, of the Doe Revocable Trust dated [insert date of signature].” The date that the trust agreement is signed becomes part of the name of the Trust, even if the trust agreement is later amended.

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.

Protecting Family with Health Care Powers

If you want to be in the best medical health, it is important to be sure that you are in the best legal health. That is, that you have identified agents with complete legal authority to make decisions about the health care you need -- when you are unable to make the decision yourself.

The medical healthcare power of attorney identifies an agent, such as a trusted family member or friend, who can give consent to medical treatment if you cannot, such as consent for surgery or hospitalization. An alternate agent should also be listed in case your first agent cannot be reached. For example, if your spouse is your agent and both of you are in an accident, then an alternate agent is needed.

Different from other states, the Arizona statute also allows you to authorize your health care agent to make the decision about whether you are buried or cremated. Before this law, if you died without being married, then all of the members in your family could have input in how you were to be buried or cremated. If a person died without having family, then it could be difficult to have a mortuary carry out any burial or cremation. Thus, designating burial or cremation preferences in your health care power of attorney can now ease many problems for those who survive you.

Another difference from other states is the ability to have a mental healthcare power of attorney which helps avoid costly court intervention if you or someone you love suffers with a mental health care issue, such as mental illness, brain injury, stroke dementia or Alzheimer’s. In such cases, a common problem is when a patient refuses medication that is necessary for comfort and happiness. The mental healthcare agent and the doctors can insist on medication being taken and can have a person admitted to a psychiatric hospital unit until the medications are stabilized. This document avoids the need for court intervention for you to get the best health care possible.

If a person does not have these healthcare powers of attorney, then their loved ones, even a spouse, may need to seek court authority to be able to cover all health care needs. Court involvement requires two sets of attorneys, since the person needing the health care needs separate counsel. In addition, a court investigator must evaluate the person and a hearing is held in open court—in about 45 days after the request is made. Time, money and privacy are saved by appointing an agent through healthcare powers of attorney.

In addition to health care powers of attorney, there should be a power of attorney to appoint an agent to handle your finances and make sure your bills are paid while you are ill. In this way, you can be assured the best heath—both medical and legal.

Protecting Family with the Power to Protect Your Assets

The durable power of attorney is a fundamental tool to protect your assets. It allows you to name an agent to handle your assets, if you become ill or incapacitated, are traveling or unavailable for some reason. Even assets held in joint tenancy or community property require the signature by both owners, and if either owner is incapacitated, then the other owner would be unable to make a necessary sale.

When you prepare a power of attorney, you are referred to as the "principal." A power of attorney is “durable” if it remains effective even if the principal becomes incapacitated. In order for a power of attorney to be durable, A.R.S. §14-5501 requires that it provide similar language to the following: “This power of attorney is not affected by subsequent disability or incapacity of the principal or lapse of time.” The principal can still revoke and change the power of attorney at any time, as long as the principal has capacity; i.e., he understands the consequences of his actions and his finances.

The person you name to assist you with finances is your "agent." The durable power of attorney should list an alternate agent in case the person you list first cannot serve. For example, if you list your spouse as your agent, but your spouse is ill too, then you need an alternate agent.

Durable powers of attorney can be made contingent upon your incapacity. That is, the agent cannot act until you are declared incapacitated. This is not advisable because once you are declared incapacitated you lose the right to make legal decisions, including the ability to change your agent.

For most people, they will need an agent's help before they are incapacitated. Therefore, if the durable power of attorney is immediately effective, then the agent can be of assistance during short term illnesses or simply to deal with difficult billing departments when you might not have the strength to do so.

Durable powers of attorney are necessary even if a person holds his or her assets in trust. For example, access to retirement plans, like an IRA, can only be obtained by an agent under a power of attorney, not a trustee. Also, the providers of services for health or personal care needs often require the signature of an agent and not a trustee.