Each state has “intestate succession” laws controlling what happens to your assets if you die owning them in your name without written instructions stating what you want to happen to those assets. These laws are designed to provide what people will want generally, but they often aren’t what you'd want to happen in your particular situation. While for instance, your state’s laws may provide for the equal distribution of your asset to your children, your circumstances may warrant some form of unequal distribution. You also may prefer to have the assets held in special needs trust.
A will conveys your wishes to override your state's intestate succession laws. If you have assets in your name at death, they will be subject to probate and will be controlled by your will, if it exists, or by intestate succession laws in the absence of a will. Each state has laws dictating the value at which an estate must pass through probate. In Arizona, an estate consisting of personal property valued at $75,000 or less and equity in real property of $100,000 or less may bypass probate through the filing of a small estate affidavit.
However, if your assets are held in the name of a revocable trust they won’t be in your name at death and they won’t have to go through the probate process. The probate process may be more or less expensive and time-consuming depending upon the jurisdiction. In any case, it is a public and time-consuming process and can also deplete the assets of the estate. A revocable trust allows for private management of your assets without court supervision since it is essentially a contractual agreement among the grantor of the trust, the trustee(s) and the beneficiaries. While you’re alive and well, as the trustee, you will be the person managing those assets. If you become incapacitated (as defined by state law) or after your death, the person you’ve chosen to be your successor trustee would assume that role. This incapacity protection can be invaluable especially in the event of unanticipated or protracted illness.
Regardless of whether you choose a will or a trust as the basis of your estate plan, you must update your plan periodically to ensure that it is consistent with and applicable to your then-current circumstances. Are you comfortable with the successor trustees who would take over in the event of your incapacity? Are you comfortable with the distribution of your assets upon death?
Many things can happen in the course of a year, especially in light of the current COVID crisis. If you haven’t made an estate plan you should talk to an attorney about doing so at once. If you already have an estate plan, be sure that it is still consistent with your wishes and update it as required.
Call Agins Law Firm, PLC, PLC at (480) 401-2660 to schedule an appointment to prepare or review your estate plan.