Arizona Estate Planning Lawyer & Attorney : Stephen Follett Law Firm : Probate Law and Trusts : Gilbert, Phoenix, Arizona

The family dynamics after the death of a parent can change dramatically.  Parents often do not truly understand their own children and family.  If you are a parent, you may be saying to yourself:

He is right some families are really messed up.  I am glad my kids get along.

The problem is, this is what many other parents have said before World War III breaks out after their death.  Karen S. Gerstner, a member of the Houston, Texas, firm of Karen S. Gerstner & Associates, P.C. wrote the following in her article in the Property and Probate Magazine of the ABA.

When I was a young lawyer, I attended a meeting with several attorneys to discuss certain “contested matters” that had arisen after the death of a widower who died survived by four children. I was shocked to hear one of the seasoned attorneys say, “If all decedents had only one child, my workload would decrease to nothing.” Whether you go back to Cain and Abel, or only as far back as the Smothers Brothers (“Mom always liked you best”), sibling rivalry is the chief factor in many disputes arising after a parent dies. Many laypeople attribute all litigation to greed, but in the case of family situations, often much more is involved than simply greed. Sometimes children hold deep-seated resentments, which may be based on perceived unfair treatment by a parent or sibling, often going back many years. Sometimes the last living parent is the only “glue” holding the children in the family “together” (if they ever truly were, in fact, “together”). Sometimes parents have unrealistic expectations about family.  

I have seen children try to impose their view of "fairness" to their parent's estate plan.  In some situations it comes to theft and in others subtle manipulations.  As Ms. Gerstner stated, sometimes the last parent is the only reason for children to hold back deep-seated resentments and emotions.

Proper advanced planning is the best way to mitigate the potential for court challenges in the family.  Hopefully, enough can be done during life to address some of the underlying issues that give rise to court challenges.

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If you have real property (land, houses, etc.) in more than one state then you need a trust.  When you have property in more than one state, you are subjecting each parcel of property to probate in each state. 

When you place property in a trust, you enable your trustee to sell or manage the property without passing through probate.

In Sun Lakes, Apache Junction, Casa Grande, and other communities with large "snow bird" populations it is common to own a winter home here and a summer home in another state.  If you are in this situation, then you should consult with a qualified estate planning attorney in your principal state in order to address the potential of two probates.

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I watch how people find this blog.  It gives me an idea of the topics in which people are interested.  One search was "estate planning in arizona and children from a previous marriage".

As a general rule, in Arizona, children from a previous marriage have a special status under the law.  If you do not have a will or a trust, then the government will give half of your community property and half of your separate property to children of a previous marriage.  The surviving spouse gets the rest.

I have seen this outcome and it is often very tragic.  Once, because of the way a couple had structured their investment properties, the husband owned the rental house in his name.  It was the couple's retirement.  When he died, his wife lost half of the retirement to the children of the husband.

Usually, when there are children of a previous marriage a trust is a good idea.  The trust is structured so that the surviving spouse gets to use the money during his/her life, but then at the surviving spouse's death the money can go to right children.  Otherwise, if a will is used the surviving spouse gets the money and the surviving spouse could give it to anyone, and the children could get nothing.

If you are married and you or your spouse have children from a previous marriage you need to speak with a qualified Arizona estate planning attorney.  This general information is insufficient for any planning.

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Someone found my website with the following Google search:

"how to probate an estate in arizona, can I do it myself"

So searcher, if you try searching again, I hope you find this post.  The short answer, to the chagrin of many other attorneys is YES.  In Arizona, the laws are structured so that it is not impossible to do a probate by yourself, "pro per" as we attorneys say.  The Arizona legislature is not "friendly" to attorneys like other states.

I do not recommend a "do it to yourself" probate because I have seen some non-attorneys go wrong.  But, if you intend to probate your estate by yourself to save yourself the attorney fees, then I would like to help you get started.  I gain nothing by hiding the legal process from people who want to educate themselves.  In my opinion, once people see how complicated a "simple probate" is they still may hire me. 

However, I would not recommend trying your hand at anything but a simple probate.  My definition of a simple probate is where there is little debt, just one or a few assets, and one heir (or all the heirs get along extremely well and already agree).  If you meet those first requirement, then you should also be willing to invest a significant amount of time learning what you need to do, going to court, and in administration. 

Probating the estate of a spouse may not be that difficult, unless there are children of a previous marriage.  If there is no will, you will need to ensure that you have found all the right heirs.  Most people do not know that children of a previous marriage get half of the community property and half of the separate property too.  (A great reason to create an estate plan.)

That absence of a will brings up another point.  You need to know whether you are "probating" a will or "probating" an intestate estate (no will).  Each requires its own specific forms, but the forms available in Maricopa County themselves maybe of some guidance.

As you can tell, there are many little tricks and traps that you need to know.  But, for those that are adventurous enough to try, and willing to spend the time learning here is the information and forms to do it in Maricopa County.  The forms would be similar for other Arizona Counties, but you can check with them. 

If the estate is small, then there may be the possibility of avoiding "probate" altogether and collecting everything by affidavits.  Look at the self help forms for that.  If there is less than $50,000 in assets not real property (houses, real estate, land, etc.) and less than $75,000 in real property you can avoid probate.

Additionally, here is a link to the Arizona statutes governing probate and estates. 

Good luck with it if you give it a try.  This information is not enough for you to make every decision and is certainly not enough for guidance on everything you need to know.  It is only enough to get you started.  This should not be relied upon as legal advice because there is just too much to consider to fit into one post.  My legal recommendation, for my malpractice coverage, is to hire an attorney.  There may just be too much to risk.

After all, if it is a simple estate, then it will not be an expensive probate.  Additionally, it may be helpful to see an attorney who could analyze the case and even prepare the affidavits for a minimal amount.

Administration of a trust is not the same as probate, and it requires legal guidance in my opinion.

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Yuma, Arizona attorney Larry Deason identifies seven important elements of an Estate Plan in this article.   The article is brief and easily understandable.

The seven points he makes are:

1. Health care power of attorney with a living will so your appointed agents can care for you to avoid costly guardianship.
2. HIPPA authority so that your loved ones can have access to your confidential medical information.
3. Durable financial power of attorney so your appointed agents can care for your money and assets to avoid costly conservatorship.
4. Revocable living trust to avoid costly living probate (conservatorship) and death probate.
5. Pour over will so anything not in the living trust is added upon death.
6. Funeral trust to protect money from creditors and Medicaid to ensure your family does not bear the burden of your funeral.
7. Completed legacy estate plan distributing the personal items (like grandmother's ring or grandfather's watch) that most frequently cause family fights.

I agree with each of these points.  However, a revocable living trust is not necessary for many situations.  In a modest estate, a will and proper advance planning is sufficient.

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Just yesterday, I blogged about the need for farmers to plan carefully to avoid family fights.  Today, I see this article from Reuters: 

Grain rally complicates US farmer estate planning

The article focuses on the impact of rising grain prices and the rising value of farm land.  The good news is families are making more money and have more wealth.  The bad news is nearly half of that wealth could be lost at death.  Worse, without a plan the family will have to agree on the disposition of the family farm.

The article recognizes that even a plan completed a few years ago could be dangerously out of date today.  Moreover, the death tax and inheritance laws are very likely to change.  The only way to avoid the death tax and loss of the family farm is to plan well and plan ahead.

This is another reason to have a positive relationship with your estate planning attorney.

What struck me most was a daughter in law's comment that she feels uncomfortable bringing the subject up.  She and her husband farm her mother in law's land.  That is a recipe for disaster because if there is no plan, they could lose the farm and their income.  Her family depends on the land and there is no plan for the future.

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I mentioned my desire to offer free education to the public in a previous post.  I am pleased to have an upcoming seminar offered free to the public.  I hope to see you there.

The first session of my new seminar:  "19 Smart Ways to Plan Your Estate" will be held Tuesday March 18, 2008 from 1:30 to 3:30 at the community room at Northern Trust Bank in Sun Lakes, Arizona.  A flyer with a detailed description of the program can be downloaded here.  It requires Adobe Acrobat Reader which is free.

The seminar was designed with special emphasis on 12 Planning Mistakes That Could Cost Your Family a Fortune -- and Their Solutions”   Come learn about the good and bad about wills and living trusts, especially 20 misconceptions about wills and trusts.  Read the flyer above for even more exciting topics.

This will be a unique - fact filled seminar that you will not want to miss.  It will be filled with examples that will engage your mind as I lead you through the legal process of creating an estate plan.  Mark your calendar now!  Invite a friend.  If you cannot make it, please feel free to call me for more information.

Topics include, living trusts, wills, powers of attorney, health care powers of attorney, living wills, ethical wills, beneficiary deeds, payable on death accounts, IRAs, retirement plans, and more.

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For the convenience of my clients, I have retained my office space in Chandler Arizona to meet by appointment only.  If this is more convenient that my South Gilbert location at Chandler Heights Road just East of Higley, then call and I will schedule an appointment with you there.

The office is located in the fabulous Cooper Crossing office comples in the Northwest corner of Cooper Rd and Ray Rd.

1820 East Ray Road Chandler, Arizona 85225.

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Arizona probate is not always as bad as we hear because the process was simplified in our laws, making it less expensive than other states.  It is certainly better than probate in California where lawyers and attorneys have a sweetheart deal in the statutes to take a percentage of the estate. 

Fees for the probate of a house in Arizona would be no more than a couple of thousand dollars.  Fees for the probate of the same house in California could be double, triple, or more depending on the total value of the house.  Consequently, price alone is insufficient to avoid probate in Arizona.

The bad news is that:

• Arizona probate is still public, where greedy snoops pour over records looking for easy targets on which to prey. 
• You still can't do much to stop a person from challenging a will in probate court, so family members are more likely to challenge a will in probate court.
• When challenged, the probate of a will is expensive.
• It will still take your family and loved ones at least 6 to 8 months to complete an easy Arizona probate.
• It is usually a bigger and more time consuming administrative burden.

These things are not always a problem or even a concern for every person or every family when:

• There are few assets or the person(s) receiving them is responsible;
• The family is harmonious; and
• Someone has the time to dedicate to the probate process.

The bottom line is that Arizona probate should be a personal decision.  Clients that want a living trust are usually thinking of the family they are leaving behind.  So, their choice for a living trust isn't saving money, it isn't privacy, but rather it is usually the comfort and assurance that they are not leaving a burden for their family.

I have had occasion to speak with clients or friends that have probated a will and acted as trustee to a trust.  When asked to compare the experiences, every one of them has said the trust made it straightforward and seamless after death.  The probate was difficult and long in comparison.  Consequently, I believe that when appropriate, a living trust is justified to make the process simpler for the ones you leave behind.  I disagree with other Arizona attorneys that always recommend a living trust.

Moreover, if the assets include a home, personal belongings, a small bank account, and maybe a car, then it may be possible to avoid probate with a solution that is less expensive and easier than a trust.  I love to recommend that solution when it is appropriate.

As usual, I recommend that everyone consult with an Arizona lawyer dedicated to estate planning and probate lawyer. 

• Dedicated to estate planning and probate--so you get an appropriate plan that works. 
• An Arizona lawyer--so you get the right advice for our state. 

What you do not know can cost you.  Unfortunately, clients come to me when no planning or inadequate planning was done.  It frequently costs more and is upsetting at a difficult time.

If you have questions about your situation, my consultations are free and my offices in Gilbert and Chandler are conveniently located for clients in Mesa, Tempe, Sun Lakes, Phoenix, Chandler Heights, Higley, Queen Creek, and Apache Junction. 

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I wrote previously about my experience with Annuity Scams and Living Trust Scams.  Every time I think about that experience I get a pit in my stomach.  So called "advisors" took advantage of their client's trust and wrecked the lives of ordinary families.  Many were in their golden years with less than $50,000.00 in their nest egg.

To work against the trust mills and unscrupulous "advisors", I want to educate the public about living trusts so they can avoid the financial scams.  I am proud to be an estate planning attorney and lawyer and I want to share my knowledge with others.  There should be no "secrets" in estate planning that only the wealthy know.

I am so excited about a partnership I am developing in the Sun Lakes and Chandler area where there is a greater need for education.  This partnership will be of tremendous benefit to those who live in and around Sun Lakes and Chandler who want to learn more about Living Trusts or other estate planning tools. 

This is the purpose of my effort: 

Anyone, regardless of income and status in Sun Lakes or Chandler can learn what they need to know about wills, financial power or attorney, healthcare power of attorney, living will.  And, they can clear away the misinformation about living trusts so they learn who could benefit from a living trust, because not everyone should have a living trust. 

If you support that mission or would like to participate, then check back for more information or call me with questions.  If you or your organization would like to sponsor a class on living trusts or another aspect of estate planning, I will do what I can to make myself available.

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If there is one problem with a trust, it is the funding problem. 

Here is one example of what happens when a trust is not funded.  The trust named a person to get real property.  Unfortunately, when the trust creator died, the real property was titled in the name of a corporation.  Consequently, the property did not go the the person named in the trust, and instead the person entitled to get the stock also got the property as an asset of the corporation.

Funding isn't difficult.  But here, the creator's failure to fund the trust failed his desire to pass the property.  If funding is not dificult, why does it fail.   There are two main reasons that trust funding fails. 

 I see the following reasons for a trust funding failure:

• Innocent ignorance by the trust creator; and
• Failure of the trust creator to maintain title of asset correctly.

Ultimately, I believe that the greatest cause is innocent ignorance on the part of the trust creator.  When you buy a "trust document" from a store, an online service, or a document preparer (who might be an attorney) you are not getting the advice and education that comes from a competent and trusted personal family advisor. 

Everyone has some unique family, financial, or personal differences.  Accordingly, one size does not fit all.  Being penny wise and pound foolish can be a very big mistake in estate planning.  

So, if you obtain a trust--educate yourself.   If you pay an attorney, make sure that attorney is committed to ensuring your trust is fully funded and the plan will work.  Ask how many times they will meet with you.   Ask if they prepare a funding toolkit.  Ask what they do to ensure your plan will work. 

Ask lots of questions about their estate planning process, what do they do for you, how does it work, why do they do what they do.  An attorney seeking to be a trusted personal family advisor will be able to explain what they do that makes them different than other attorneys. 

If you have a trust make sure it doesn't fail.  Educate yourself and stay on top of funding.

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I am excited about my brand new office in south Gilbert. Arizona.  It is located at the Offices at Seville in the Northeast corner of Chandler Heights Road and Higley.  It is conveniently located to serve Gilbert, Queen Creek, Johnson Ranch, and Anthem in Pinal County. 

For the convenience of my clients, I retained my location in Chandler Arizona by appointment only.  It is is located off Loop 202 at Cooper and Ray in the fabulous new Cooper Crossing offices.  This Chandler office is conveniently located to serve Chandler, Gilbert, Ahwatukee, Mesa, Tempe and Sun Lakes in Maricopa County. 

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Many people I meet with do not know a "secret" benefit of creating a living trust in Arizona.  Every estate plan including a trust should be drafted with this secret taken into consideration.  After learning the secret, clients are even more excited about the benefits of their trust. 

This secret is how a trust avoids "living probate" in addition to "death probate."  Neither "living probate" nor "death probate" are legal terms, but they aptly describe two times the court and government normally step in to "protect" our interests.

Most everyone has heard of "death probate" when a person dies.  Avoiding this probate is good because the Arizona Superior Court process is slow, public, and can be very expensive.  There have been many books and articles written on the subject, and this is a primary reason why Arizonans create a trust. 

The "secret" of avoiding "living probate" excites my clients when I design their estate plan! 

Avoiding "living probate"  is another very compelling reason to have a trust in Arizona.  Consider what happens if you are severely injured in an accident and suffer serious brain damage, or more commonly you gradually loses the ability to make financial decisions due as you grow old.  You are"incapacitated" and the court and government step in to "protect you."  

When you are incapacitated, a loved one or any interested party can go to probate court and petition to be appointed "conservator" of your money and assets.  Nursing homes have sought to be appointed conservator.  Even if your family agrees, they will have to spend thousands of your money and take unnecessary time, increasing the burden on those caring for you.  When there is disharmony in a family or there are significant assets, the decision of who gets to control your money is often contentious and will cost thousands to tens of thousands more.

Significantly, you will not be able to tell the court your wishes.  Someone that you would never choose yourself may be appointed as your conservator by the court .  This living probate is as undesireable as probate after we die.

A properly drafted trust is the answer to the concern about "living" probate court.  Your trust will designate the person to control the assets.  When you, the owner of the trust become incapacitated, your trusted representative seamlessly step in as successor trustee without court approval or challenge by other "interested" parties.

I was surprised when one client already knew this secret.  His cousin was already taking care of a relative that was incapacitated.  He saw the benefits of a trust and wanted to avoid "living probate."  Having seen that situation, avoidance of "living probate" was very important because he would be living if it happened.

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