older we get the more conscious we become of the need to put something in place
to protect our heirs from the hardship of a death without estate planning. The
present time is always the best time to take care of that.
we find ourselves in a situation where there is a need to change arrangements
we have already made, for instance:
- We have an older trust that was made for
reasons that are unnecessary now. For example the threshold for being liable
for any estate taxes has increased from about $600,000 to about $12 million
dollars in the last 20 years, yet people still have overly complex trust
documents to deal with estate tax liability.
- Things have changed over time and you want
to change your beneficiaries.
- You have a trustee that you no longer want
to have serve, or who has died, and you want to make a change.
- You have a beneficiary who does not manage
their money effectively and you want an alternative to leaving them a huge sum
of money all at once.
Again, there is no time like the present to address
these types of issues. Arizona Mobile Attorneys has extensive experience in
this area and we stand ready to assist you in this endeavor.
Arizona Mobile Attorneys
Often, a business, typically a limited liability company
(“LLC”) is created as part of an estate plan. This is done because LLCs are
somewhat informal business entities and are easy to administer compared to a
Corporation. In addition, unlike a Trust, an LLC can continue in existence
indefinitely. These types of arrangements are often used to deal with a
specific asset, such as a home, vacation cottage, or other real estate. A new
federal law called “The Corporate Transparency Act” is going into effect January
1, 2024 with new requirements for companies and very severe penalties for
noncompliance, with civil penalties up to $500 per day, with a maximum cap of
$10,000. Willfully providing false information in such reporting carries a
prison sentence of up to two years.
These penalties are applied to beneficial owners and senior
This law requires the disclosure by companies of the
beneficial ownership in the company (any individual who owns at least 25% of
the company is considered a beneficial owner). A new system called BOSS will be
made available for companies to report this online. Companies that already
exist as of January 1, 2024 will have until the end of the year to comply.
Newly formed companies will have 30 days to do so from formation or
At Arizona Mobile Attorneys we assist clients in the
formation of businesses and related estate and succession planning. Please call
us to arrange an appointment.
© 2023, Arizona Mobile Attorneys
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 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
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.
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.
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:
- 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.
- 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.
- 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.
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
- You wish to change beneficiaries or otherwise
- 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.
- 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
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
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