Many people put off estate planning. They cite many reasons for doing so: “I don’t have time, too many family issues; I’m not sure of exactly what I have to leave for loved ones;  I’m not sure how to make everyone happy” etc.

This often leads to situations where a person dies without any estate plan or creates one very near to death. Both of these situations can cause significant problems.

Dying without an estate plan means that the property that is left behind is subject to probate. Probate is a process in which gathering and distribution of a deceased person’s property is administered by court process. This process is often several times more expensive than creating an estate plan that effectively distributes property privately, quickly and efficiently, outside of the court system.

If a person waits until they are on their death bed to create an estate plan a couple of major problems may arise. First, depending on the nature of their last illness, the person may lack capacity to create and sign off on an estate plan. Even if the person has sufficient capacity, the fact that they waited to do so to the end will often induce others to contest the estate plan based on alleged incapacity or undue influence by other persons which the mere fact of waiting until the end is used as support for those allegations. Secondly, the effect of waiting until the end, though better than doing nothing at all, causes hasty decision-making which in the end may not support that person’s final wishes.

At Arizona Mobile Attorneys we specialize in helping our clients devise effective estate plans that help clients leave the legacy they desire in an effective, efficient manner that takes care of their loved ones.

©2023, Arizona Mobile Attorneys

Often times married couples assume that their spouse will inherit their property when they die. They also often assume their children will inherit their property when they die. The truth is that inheritance always depends on the family situation and the nature of the property in a person’s estate.  In a community property state like Arizona a person can die with separate property which is in their own name. A person can die owning community property (property shared equally in their marriage) or they can own property jointly with a spouse or other persons as jointly held (non-community) property.

Certain legal rules must be applied that can sometimes have less than desirable results for both the deceased person and their surviving family members. These rules are very much dependent on what type of property the deceased person held while living.  For example a person can inherit a home from their deceased parent. This property being held solely in the inheriting person’s name is considered their separate property. If that person dies leaving a surviving spouse and a minor child they may very well believe that the husband will inherit the house and carry on. The truth is the husband would inherit half of the home and the minor child would inherit the other half of the home.

The above result seems harmless at first glance; however, the inheritance would only occur as the result of a time consuming and costly probate proceeding in the Superior Court. In addition the fact that the minor child has acquired a substantial asset means that their father will need to establish a conservatorship on their behalf which will be subject to substantial time consuming court supervision and substantial legal fees and costs until the child reaches 18 years of age.  This would render the child’s financial estate a public matter during their minority.

A much more time and money efficient approach for the inheriting parent would  to establish an estate plan upon their own inheritance that is designed to pass the property directly to the person(s) they wish to give the property to in a manner that bypasses probate proceedings as well as any subsequent conservatorship of an heir, keeping the matter private. At Arizona Mobile Attorneys we have prepared many such estate plans and can assist you with your plan.

© 2023, Arizona Mobile Attorneys

We often encounter single clients who have joint bank accounts with a child or a trusted friend. While these accounts are convenient and will avoid probate on death, we do not recommend them for the following reasons:

1. Fraud. When an additional person is named as an owner on a joint account they have free access to that account and may treat the money as their own. Many older adults have found their accounts gutted by a child or a friend that they considered above reproach.
2. Exposure to Legal Liability. If this person who has been named as an additional owner on an account runs into legal trouble the money in the account is considered their money for purposes of satisfying any lawsuit judgment.  This would include accident liability, creditor issues, divorce judgments and more.
3. No Inheritances.  If the true owner of the account passes away all the money goes to the surviving joint owner. That is fine if it is what is intended. Often times however, the joint owner has promised to distribute the money to other heirs. Unfortunately that person has no obligation to distribute the funds and often does not honor that intent.

There are three steps every person can take to assure that they can avoid fraud and legal liability while assuring that their money goes to the persons  they want it to go to when they die:

1. Remove the joint owner(s) from the account. They are not necessary if you merely need them to help you manage your finances and other business and aren’t providing them with a gift.
2. Execute a Durable Financial Power of Attorney that allows the joint owner to fulfill those financial and business management functions you need them for. An effective Durable Power of Attorney will protect the maker from being financially exploited and protect against the problems discussed here.
3. Complete beneficiary designations with the institutions holding the accounts to assure that those persons you wish to inherit the money will actually get it. These institutions typically have forms for you to fill out and sign. It is a fairly easy task that avoids the need to go through a probate proceeding in court to get the property distributed.

At Arizona Mobile Attorneys we can help you with these and other matters concerning estate planning and physical and mental capacity planning. Please contact us for more information

It’s time to ring in a new year and, with it, an excellent time to review your estate plan.  If you need changes or help, contact an elder law/estate planning attorney. In the meantime here is a list of things to consider in reviewing that plan:

• Were there any life changes such as death, birth, marriage, divorce, a move out of state, family relationship issues, or disability?  
• Do you own real estate in another state, moved from another state, or own a business?
• Do you have minor children, problem children, or no children?
• You wish to change beneficiaries or otherwise disinherit someone;
• Review your beneficiaries on Trusts, bank accounts, life insurance, 401k, retirement accounts, and investments to make sure they exist and this follows your estate plan;
• If you have a Trust verify that all assets intended for the Trust are titled to the Trust;
• If you have a partner that you are not married to proper estate planning can give both of you the ability to help each other legally and inherit from each other if you so choose;

If you do not have an estate plan or are not sure where to start in reviewing your estate plan an elder law and estate planning attorney can be invaluable in helping you with this task. 

At Arizona Mobile Attorneys we stand ready to help with any or all of these issues.

From time to time we run into clients who want to disinherit some or all of their heirs. This most often occurs due to damaged relationships, or a perception that persons or organizations other than the heir are in greater need of the resources to be passed on.

Disinheritance typically causes conflict between the disinherited heir(s) and the heirs and devisees (other beneficiaries) to whom resources are passed, causing the estate plan to be legally contested. This causes considerable time to be spent and unintended stress for those who are left to defend the estate plan, not to mention financial resources of the decedent that must be spent to provide that defense.

There are a number of steps that can be taken to avoid or at least mitigate this problem.

1. Don’t needlessly delay creating and updating your estate plan. When a person waits until shortly before they pass away the disinherited heirs will often claim they didn’t have capacity since they were near death and that their illness or condition prevented them from being able to think clearly. By taking care of your estate planning now, when you are lucid and thinking clearly you can avoid this argument. When major life changes occur the plan should be updated to avoid the same pitfalls.

• Make sure your estate planning documents (Will and/or Trust) identify who your legal heirs are. These are the people who would take your property if you were to die without any will, trust, or other document that legally states who are to take your property when you die. By naming them they can’t claim you forgot they existed (indicating incapacity), which is one argument for contesting an estate plan. If you complete your estate plan sooner, rather than later, you have more time to manage relationships with both inheriting and disinheriting heirs.

• Explicitly state that those heirs you are disinheriting are not to receive anything in your estate planning documents. Some Wills and Trusts actually have language stating that any person who contests the provisions of the document will be disinherited. These provisions are difficult to enforce because state law and the courts are very liberal about accepting excuses for doing so (“Medical people said she was not competent to manage her finances”, or “He was so close to death he couldn’t even legibly write his name”).

Another problem with these No-Contest clauses is the need to “give them something” for the threat of disinheritance to mean anything. There is a popular belief that leaving someone a small inheritance prevents them from claiming they were forgotten. While that may be true, it does not prevent the incapacity argument (“He forgot what our relationship was”) or that there was undue influence or exploitation of a vulnerable person.  These clauses don’t cause harm but they typically aren’t enough to prevent a law suit.

Disinheritance can be a very tricky endeavor when it comes to estate planning. At Arizona Mobile Attorneys we have considerable experience in this area and are ready and able to help you navigate through this difficult aspect of estate planning.

© 2022, Michael G. Kelly

Q.           I am retired and my adult child is borrowing money from me. There is nothing in writing and I am worried about getting paid back. I also want to be fair to my other children when I die. How do I handle these issues?

A.            This is a common problem in a sluggish economy that is forcing adult children to turn to their aging parents for financial assistance.

A written promissory note should always be used when loaning money to a family member, including a child. While it may seem impersonal and cause some tension, it imposes legal responsibility and, in some cases, dealing with personal responsibility is exactly what the child needs. This also makes sense because an aging parent has taken care of the kids. It’s time to worry about oneself. An aging parent has a retirement and increasing healthcare needs to finance. Children who are forced to borrow money are certainly in no position to help. In this context the promissory note itself becomes very important for an older person to preserve financial security.

Many people recite a loan to an heir in their trust or will and attempt to deduct it from the child’s share. While this is one approach, the promissory note approach is a better foundation for imposing fairness. It can be enforced after death to continue payments to the estate which can then distribute the proceeds accordingly.

Sometimes an older parent will want to provide a loan to a child to help with a first home purchase. In situations where real estate is concerned it is also important to secure a loan with a lien, especially for protection in the event the child divorces a spouse or other financial issues come into play regarding that child and their ability to continue to own the purchased home. This will provide the older parent with necessary security if things go awry.

It is highly advisable to consult an elder law and estate planning attorney when considering a loan to a family member to avoid these pitfalls. Arizona Mobile Attorneys is ready to provide solutions to these problems.

CALL FOR A  CONSULTATION

PHONE: (623) 628-1110
FAX: (623) 240-2609

Arizona Mobile Attorneys

© 2022, Michael G. Kelly

One of the most overlooked areas of estate planning is in regard to passing a business interest on to others and how that is to be handled. This is a very important area of estate planning because it affects the rights of current owners who survive an owner who dies, successors of a deceased owner, and the operation of the business itself.

A host of issues will likely arise when a business owner dies: who are that person’s successors? What are their qualifications regarding business management decisions? Should the new owners have voting rights or any other right to participate in the management of the business? If new owners are allowed to participate in voting and management then how are deadlocks and other management disputes handled? How these questions are answered and when they are answered should all be answered in the estate plan as well as in the business formation documents.

At Arizona Mobile Attorneys we provide business formation services as an integral part of our estate planning service. We can help you address these issues in an effective manner that provides you and your family with piece of mind and helps to ensure the business continues to run smoothly after you are gone.

© 2022 Michael G. Kelly

The New Year is a Great Time to Assess Your Estate Plan!

Many of us procrastinate about this task, sometimes until the very end of life. It is actually one of the most important things we can do for ourselves and our loved ones and should be given ongoing periodic attention.

Everyone over 18 should at least have a plan that helps protect them and their loved ones in the event that they become unable to make informed decisions regarding their property or care due to debilitating injury or illness. This plan should include at the very least Durable Powers of Attorney for Financial Affairs and Health Care, as well as authorizations for others to obtain records from health providers.

As a person goes through life and acquires more wealth and property it becomes more and more important to preserve that wealth for those whom we care about most. As time goes by Wills, Trusts and other estate planning documents become increasingly important to protect those whom we love. Those loved ones can change and often do due to death or other reasons. That is why it is important to take stock periodically and maintain a well-conceived estate plan. The new year is a perfect time to do so.

Arizona Mobile Attorneys will work with you to make sure you have a well-conceived estate plan that meets your needs and protects your loved ones.

© Michael G. Kelly

We often encounter single clients who have joint bank accounts with a child or a trusted friend. While these accounts are convenient and will avoid probate on death, we do not recommend them for the following reasons:

1. Fraud. When an additional person is named as an owner on a joint account they have free access to that account and may treat the money as their own. Many older adults have found their accounts gutted by a child or a friend that they considered above reproach.
2. Exposure to Legal Liability. If this person who has been named as an additional owner on an account runs into legal trouble the money in the account is considered their money for purposes of satisfying any lawsuit judgment.  This would include accident liability, creditor issues, divorce judgments and more.
3. No Inheritances.  If the true owner of the account passes away all the money goes to the surviving joint owner. That is fine if it is what is intended. Often times however, the joint owner has promised to distribute the money to other heirs. Unfortunately that person has no obligation to distribute the funds and often does not honor that intent.

There are three steps every person can take to assure that they can avoid fraud and legal liability while assuring that their money goes to the persons  they want it to go to when they die:

1. Remove the joint owner(s) from the account. They are not necessary if you merely need them to help you manage your finances and other business and aren’t providing them with a gift.
2. Execute a Durable Financial Power of Attorney that allows the joint owner to fulfill those financial and business management functions you need them for. An effective Durable Power of Attorney will protect the maker from being financially exploited and protect against the problems discussed here.
3. Complete beneficiary designations with the institutions holding the accounts to assure that those persons you wish to inherit the money will actually get it. These institutions typically have forms for you to fill out and sign. It is a fairly easy task that avoids the need to go through a probate proceeding in court to get the property distributed.

At Arizona Mobile Attorneys we can help you with these and other matters concerning estate planning and physical and mental capacity planning. Please contact us for more information

© 2021, Arizona Mobile Attorneys