The Law Offices of Kelly J. McDonald, PLLC - Probate, Elder Law, & Special Needs

Phoenix Estate Planning And Probate Law Blog

Don't make these estate planning mistakes

Estate planning should be a priority for all Arizona residents. Unfortunately, many families don't understand the importance of estate planning until personally experiencing the headaches and court battles that come with settling the business of an estate. Here are some common mistakes that estate owners can avoid when setting up a will, trust or living will.

To avoid delays and creditor issues in probate, a contingent beneficiary should be named for all retirement accounts and insurance policies. Not renaming a beneficiary on an existing IRA after getting remarried is a common error. While a 401(k) automatically views the new spouse as the beneficiary, the beneficiary on the IRA should be updated.

Estate planning the right way

Even though many Arizona residents want to make sure their estate plans are properly planned so that the wealth they have accumulated will endure and benefit future generations, wealth is sustained in just a few cases. However, there are some steps that individuals can take beyond traditional estate planning methods to make sure their wealth can last for generations and help avoid conflicts regarding how the wealth is to be spent.

The manner in which an estate is divided should be the first consideration. According to estate planners, an estate can be divided equally, fairly or equitably. The division of an estate can be a difficult subject for estate owners to address because they are aware that their children differ with regard to being responsible and having certain prospects.

How to choose the right trust model

A trust is a common and valuable estate planning tool that allows Arizona residents to take advantage of all available tax-planning opportunities and dictate how they want their assets distributed. However, according to financial experts, many people sabotage their legacy plans by choosing the wrong administrator for their trust.

The administrator of a trust, or trustee, has many important duties, including conducting an inventory of assets, issuing monthly statements and filing notices to creditors. It is common for grantors to choose someone familiar with both them and their beneficiaries, such as a family member or a family friend, to be their trustee. However, this arrangement can present a couple of problems. The first, and most obvious, is that family members or friends may not have the expertise necessary to manage a trust. Another potential problem is that overseeing a trust may be too time-consuming or burdensome for qualified family members and friends.

Clues an aging parent may need help

As our parents age, it can be easy to overlook signs that they need a little help.

If you live some distance from a parent, checking in on their day-to-day well-being can be a difficult task. What’s more, parents may try to hide any difficulties from their loved ones for fear of being “put in a home.”

Estate planning can help avoid later disputes

For many people in Arizona, conflicts that had previously remained under the surface within a family can explode after the death of a loved one. Disputes over wills and the distribution of assets can tear a family apart. While there may be no way for a person to completely prevent the potential for such disputes, estate planning preparation can help to create clear documents and guidelines for a person's wishes about the distribution of their estate. This can be particularly important when the beneficiaries include blended families or people with long-running disputes.

When a person passes away, their last will and testament declares their wishes for the distribution of their belongings. Items that were not already distributed through other forms of non-probate transfer will be part of the estate handled in the probate court. Every beneficiary has a right to obtain a copy of the will and, if necessary, to challenge it. The probate court and the appointed personal representative are responsible for determining the extent of the estate, and paying off debts and taxes, before it is distributed to the beneficiaries.

Non-tax reasons for prudent tax planning

As the federal income tax filing deadline draws near (it is April 17 this year, by the way), it is natural for people to maximize tax savings strategies in anticipation of saving money that they may owe to Uncle Sam. Some strategies revolve around estate planning, as conscientious tax payers look to add more to their trusts, make charitable donations and maximize the gifts that they may give for the particular year.

Indeed, tax planning has its place within the estate planning realm, but there are other important non-tax reasons for having such a plan. This post will explore those reasons.

How can you ensure that your health care wishes are followed?

If an unexpected accident or illness leads to incapacitation, it is important that your health care wishes are known to ensure that your care is carried out as desired. We all hope to be mentally and physically fit throughout life. Unfortunately, none of us knows what the future holds.

While you may consider explaining your health care wishes to a trusted friend or family member, there are more secure, legally-binding options to explore. Do you understand how a living will or health care power of attorney can protect your best interests?

Talking to your parents about aging

When your parents begin to show the signs of age it can lead to many awkward feelings and conversations. There is a slow reversal of roles and it requires a delicate approach that shows respect and concern as you seek to make sure your parents are the best position for their level of health.

Do your parents need help with money or health care? Often, both parents and children trust that the other side will know what to do. When this happens, neither side initiates the conversation. Waiting too long can have serious consequences, whether it’s about independent living, medical decisions or predatory behavior by someone who takes advantage of the elderly.

Is it possible to skip probate all together?

The purpose of estate planning is to achieve control over things that happen after you die. One of these things is the probate process.

During probate, the court looks at your estate and locates assets to be distributed. The way to sidestep the probate process is to not have very much in the form of assets. This can be achieved in a variety of ways.

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