Estate Planning is not just for the very rich

Many people believe estate planning is only for the rich and their families. Because their estate is not complicated or significantly large, they believe that estate planning would not be beneficial to them. This way of thinking is incorrect. Every person should have an estate planning team consisting of an attorney, a CPA and a financial advisor. Many people already have a CPA and a financial advisor, so adding an estate planning attorney to the team is not a big leap.

A financial advisor will discuss many topics with their clients, such as monthly cash flow and budgeting, short and long-term financial goals, minimizing risk, investment strategies and estate planning, while confirming the client’s assets are titled correctly to avoid probate. A CPA will assist with tax planning and reporting of business income where appropriate. An estate planning attorney will see to the protection of accumulated wealth and safeguarding of long-term health care.

Many people assume that they are not wealthy because their only asset is their home. In the state of Arizona, if you have equity in your home of $100, 000 or more, your heirs may be disqualified from filing a small estate affidavit, which in short, means your estate will have to pass through probate According to Neighborhood Scout, the median Arizona single-family home price for 2021 year-to-date is $277,196. With a 20% down payment of $55,440 and monthly amortization of approximately $340, after 11 years your equity will exceed $100,000.

If your home is not held in a trust, your financial adviser should address this and refer you to an estate planning attorney. If you are the sole owner of your home, it is highly likely that following your death probate would be necessary to transfer or sell your home.

Under certain circumstances probate may not be necessary. For instance, executing a beneficiary deed for your home or a Motor Vehicle Beneficiary Designation form for your vehicles may put those assets beyond the reach of probate. But if you die without a will in Arizona, your assets will be subject to distribution under state intestate succession laws.

Probate is the process of administrating an estate; it is time-consuming, public and expensive. The minimum time required for a normal probate is four months. This is to allow any interested party to appear in the matter and for creditors to file any last claims against the decedent. There are a few exceptions for shortening this time period, but they are unusual. However, this timeline can extend much longer if the will is being contested or other litigation is pending.

Arizona does not set probate fees by statute unlike many other states. All probate fees in Arizona are required to be “reasonable,” which means that they must be in line with the fees charged by other attorneys. That said, because of the labor-intensive nature of handling a probate estate, the fees could be substantial.

Meeting with an estate planning attorney to prepare a trust, will, health care directive, and power of attorney will cost you between $2,500 and $4,000 for basic planning. This sounds expensive until you compare it with the cost of probate and, additionally, the lack of control that you will have following your death.

 

To guard against the need for your estate to pass through probate, call Agins Law Firm, PLC, PLC at

(480) 401-2660, to schedule a free consultation.