Few moments in life are as distressing as the loss of a loved one – and that loss is only compounded and deepened when they pass on without sufficient estate planning in place. Estate planning is all about anticipating the inevitable and being ready for it. This article explains the basics every Arizona or California family needs to know about the estate planning process, including:
- Resolving some key misconceptions and misunderstandings that Americans hold about estate planning.
- What happens if you do not have a full estate plan in place and become incapacitated.
- What happens to your assets, business, or the children you leave behind if you pass away without an estate plan.
Do Most Americans Understand Their Estate Planning Obligations Or Consequences?
Most people understand that estate planning is something they’ll eventually have to do. Unfortunately, that is often where their understanding of the process ends.
All too often, people have little or no idea what estate planning is, and when they do, some of what they think they know is wrong. Tragically, these mistakes, misconceptions, and myths can lead to very real pain for families and businesses, as too many in Arizona or California have tragically already experienced.
Why Is Estate Planning So Important In Arizona And California?
Even if few Arizonans or Californians understand the details of estate planning, many have seen family members, extended family members, and in-laws go through the process – and they have seen what happens when loved ones or beloved businesses do not.
Families and companies can all too easily end up in stressful situations when someone dies without any estate plan. You may have seen your family scramble to try to figure out what to do and witness the cost, in time, effort, and money, for a family or business to untangle such situations.
Estate planning is all about anticipating inevitable situations, especially death or incapacitation, and preparing your legal and financial affairs accordingly with the help of an estate planning attorney.
What Is The Role Of An Estate Planning Attorney In Arizona And California?
An estate planning attorney is more than just the person who helps you fill out paperwork; their role goes much further than that. At its heart, the profession exists to educate you and everyone else about the basics of estate planning, the options available to you, and the impact of different tools and techniques on your legacy.
Everyone will come into an attorney’s office with a different level of understanding, and even when they think they have a good grasp of the field, there are often gaps. Perhaps they understand the tools but not how to use them or the objective but not how to achieve it.
As a result, estate planning always begins with the basics: what is probate, why you probably want to avoid it, and the tools you can use to help avoid it. For example, among the most frequently misunderstood estate planning tools are also some of its most powerful: trusts.
Aren’t Trusts Only Useful For The Super Wealthy?
Some people show up at their attorney’s office and ask for a trust to be set up. They know they need one, but they do not know why, or how, or which one. Others ignore trusts completely, assuming they are only for the rich and powerful.
At one time, perhaps, under older tax laws, not everyone needed trusts or other advanced estate planning tools. Once upon a time, only if you were over a certain threshold in terms of the minimum value of your estate, such as $400,000, then $500,000, and then $600,000, were advanced estate planning tools like trusts “worth it.”
Unfortunately, the way things are set up now, with the cost of probate and everything else stacked on top, it makes sense for almost everyone to incorporate some trust planning into their estate plan.
While not everyone is actually an ideal candidate for a trust, most families in Arizona or California are – especially those with small or medium businesses. After all, the problems that come from a lack of estate planning are no less real for those of modest means than they are for the wealthy.
Attorney W. Scott Lawler is a highly experienced business and estate planning lawyer based in Arizona and California who has helped hundreds of families prepare for the inevitable. His passion for estate planning arose out of a desire to meet the needs of his business owner clients, whose wealth, families, and legacies went too often unprotected.
Feel like you understand the basics of estate planning? Ready to move on to the advanced plans and start planning your own? Contact The Lawler Group today to schedule an initial consultation.
What Are The Fundamental Objectives Of Estate Planning In Arizona And California?
Estate planning services help you prepare for three very different but important categories of concerns: incapacitation, death, and caring for minor children. Each of these represents a wide array of scenarios and complications, with their own objectives and consequences for a lack of proper estate planning.
What Happens To Your Assets And Loved Ones If You Are Incapacitated In Arizona Or California?
While death is inevitable, incapacitation is hardly uncommon. Either for a short duration, a longer one, or indefinitely, you can easily be rendered entirely incapable of action, much less communication.
If you do not have a spouse, (or worse, if you and your immediate family are estranged), who will make medical decisions for you? Who will be able to manage your assets and finances or pay your bills while you are incapacitated?
Estate planning aims to answer these questions and give you the power to decide on and resolve them. In fact, even if you have a spouse or children with access to your online accounts (which is helpful), it could end up being a scramble for them and quite stressful on your family or disruptive to your business.
When you are incapacitated, you want your family to be able to focus on taking care of you rather than figuring out or muddling with financials.
What Happens When You Pass Away In Arizona Or California Without An Estate Plan In Place?
Whether you pass away with or without a will, your assets have to go through probate. During probate, your assets are retitled (as a deceased person can no longer transfer property) to your heirs and beneficiaries through the court.
Probate in both Arizona and California is time-consuming, costly, and very public. If your minor children publicly inherit a million dollars or even a hundred thousand in life insurance, then they become easy and tempting targets for unscrupulous people – and that’s only one reason to avoid probate, cost is another major concern.
Nationwide, the average amount lost from an estate during probate ranges from two to seven percent of your estate, and it can be even higher for small business owners. That is money that never gets to go to your heirs. Even when it does, the probate process adds considerable delays, it can take 12 to 18 months for your estate to go through probate, longer if things are slowed down by conflicts.
The only way to avoid probate entirely is with advanced estate planning tools like trusts. Which, coincidentally, make excellent tools for caring for the third and final central concern of estate planning: your children.
What Happens To Minor Children Without Adequate Estate Planning?
Most people will not die without an estate plan; as we age, we tend to eventually get around to it. But the most tragic cases are when people are taken away suddenly and unexpectedly, for example, by a deadly car accident, before they even have time to consider planning their estate.
On top of all the damage this can do to their estate and legacy, it often leaves minor children solely in the hands of the court. If you pass away before you can name a guardian for your minor children, that decision will be left solely up to the discretion of a judge who has never met you, your children, or any of the relatives who may end up fighting over them.
Sometimes, the choice is obvious and obviously correct, but sometimes it is not. There is just no way for anyone to know for certain what your wishes would have been, much less see that they are respected, if you never took the time to formally and legally lay them out.
That is the fundamental philosophy at the heart of estate planning as a discipline and tool. It is, at its most basic, a way for you to clearly indicate your wishes and set up the legal mechanisms to see that they are carried out when you are no longer able to. So, for the sake of your kids, health, assets, family, and business, it is always preferable that you take the time to sit down with an estate planning attorney and get those preferences and goals nailed down.
For more information on the Basics Of Estate Planning In Arizona And California, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (480) 771-9158 today.
Attorney W. Scott Lawler is a highly experienced business and estate planning lawyer based in Arizona and California who has helped hundreds of families prepare for the inevitable. His passion for estate planning arose out of a desire to meet the needs of his business owner clients, whose wealth, families, and legacies went too often unprotected.
Feel like you understand the basics of estate planning? Ready to move on to the advanced plans and start planning your own? Contact The Lawler Group today to schedule an initial consultation.