Estate planning is the methodical approach of getting your personal and financial matters if you become mentally debilitated or pass away. The primary legal document required to plan for your passing is a Last Will and Testament, in which comprises of a written arrangement of guidelines to your loved ones as how you wish your estate to be allocated following your passing.
If You Pass Away Prior to You Creating a Will and Estate Plan
Each state has a legal process for establishing who is going to inherit the property of an individual that fails to create a genuine will using each state’s intestacy laws.
What is the meaning to have passed away intestate? It merely means that an individual has passed away without having created a genuine last will. When this is the situation, then the intestacy laws of the state in which the individual lived and was the owner of real estate at the time of their passing will establish who is going to inherit their property. Whereas each state has separate laws, they all adhere to the same common pattern. Primarily, your spouse and your children are going to inherit your belongings. When you don’t have a spouse or any children, your parents would inherit your property. If your parents have passed away before you, then your siblings would inherit your property. when these situations don’t apply, your property would then go to any nieces and nephews.
A Last Will and Testament typically comprises of 4 parts:
Part 1 – manages how your last bills are going to be paid off.
Part 2 – manages how the expense of settling your estate and/or any estate taxes or inheritance taxes are going to be paid off.
Part 3 – manages who is going to oversee the settling of your estate (your Executor/ Personal Representative) and what authority they are going to have. If there are minor children, the document will detail who will be responsible for up bringing the children—your Guardian/Conservator.
Part 4 – manages who is going to receive the balance of your estate, how they’ll receive it, and the time they’ll receive it.
The Disadvantage of Having All Property Pass Under the Conditions of a Will
Whereas a Last Will and Testament is a vital part of any estate plan, there is one primary disadvantage to having all of your property pass under the conditions of your will. The disadvantage is that your possessions are required to go through probate prior to your loved ones accessing it. Probate could take some time between 6 months to upwards of 9 months to over multiple years, meaning that your family is going to have restricted rights, and usually, accessibility to your assets isn’t possible until probate is finalized.
These situations are where revocable living trusts becomes an important factor. This document is a written legal agreement setting forth how your property is going to be managed when you are still alive and then after you pass away. The part that manages how your property is going to be overseen while you are still alive includes your mental disability arrangement. The part that manages how your property is going to be overseen after your passing will include the same conditions that would have been written in your Last Will and Testament if you chose not to put in place a revocable living trust.
How Do Revocable Living Trusts Bypass Probate?
How do revocable living trusts bypass probate? When your assets are funded into the trust throughout your lifetime, they will not be required to be probated following your passing. How can you fund your assets into your trust?
For financial institutional accounts and property holdings, your name is going to be removed from the asset. The name of your trust is going to be put in its place. For others, like retirement and/or life insurance accounts, the trust is going to be designated as a beneficiary of the asset.
After the trust is completely funded, you are no longer the owner of your assets—your trust will, and any property that is owned by a revocable living trust will not be required to be probated following your passing. Rather, the trust property may pass instantly and without delay to your loved ones.
Garber, J. (2021, January 10). What happens if you don’t have an estate plan upon death. Retrieved March 02, 2021, from https://www.thebalance.com/what-happens-if-you-dont-have-an-estate-plan-3505136
Arizona Family Law
Naming guardians in your will can be part of your estate plan. You may think you’re too young or don’t have enough money to justify the expense, but if you have children, you have priceless assets. There are many considerations when naming guardians for your kids. However, the process doesn’t have to be expensive or complicated.
There’s nothing better than the peace of mind you will have knowing you’ve protected your family at a time when they need it most. Let us help. Schedule a consultation or contact Ogborne Law, PLC of Arizona today.