Arizona Estate Planning Laws
Why Should You Learn About Arizona Estate Planning Laws?
There are many reasons you should consider creating your estate plan and learning more about Arizona estate planning laws. Arizona estate planning laws permit an Arizona estate plan to include powers of attorney that enables a person you choose to manage your finances and make medical decisions for you in the event you are unable to do so. An estate plan may also avoid the need for your family to hire attorneys to determine how your assets and debts are to be managed and divided.
Including a Family Trust as a part of your estate plan will also allow you more control over when your assets are transferred to your family members and the conditions under which they will be transferred. A Family Trust also allows you to grant a part of your estate to future generations, such as grandchildren or great-grandchildren.
What Happens to Your Property If You Do Not Have a Will in Arizona?
The terms used to describe the situation of someone passing away without a will is “intestate”. If someone dies intestate, the Arizona laws will determine how your estate is to be divided among your heirs. There are too many scenarios to cover the numerous things that can occur, but relationships such as having a spouse (or not), children, grandchildren and even parents can affect how the estate is divided.
This creates an obvious problem, which is the fact that you and your family cannot control the manner in which your estate is divided. You may have certain intentions, but without a will, those intentions may not be realized.
How Are Wills Executed in Arizona?
Arizona requires a Last Will and Testament to be signed by the person making the Will, as well as two witnesses. Those signatures should be notarized. If properly executed, the Will can be admitted into probate court as a “Self Proven” Will; which means the testimony of witnesses to authenticate the Will is not required.
How Is a Power of Attorney Used in an Estate Plan in Arizona?
A Power of Attorney under Arizona estate planning laws is a document signed by you that gives a person the legal authority to do things on your behalf. You may grant a person a broad General Power of Attorney to act on your behalf regarding anything. You may have a Limited Power of Attorney that will only grant some limited authority to act on your behalf for only certain things.
You can limit your Power of Attorney to last only a certain time period or you can have it be ongoing until such time you revoke that Power of Attorney. You can do this anytime during your lifetime. This type of Power of Attorney immediately revokes all powers under it upon your death.
A Durable Power of Attorney, on the other hand, is meant to survive your death; meaning the person granted the power to act on your behalf may continue to do so upon your death. This does not mean he or she can do whatever they want with your assets. The person has a fiduciary duty to manage your assets and debts in a manner consistent with your estate plan.
Lastly, you may have a Power of Attorney that only becomes effective if you become disabled and are unable to make medical or financial decisions for yourself.
What is a Living Will in Arizona?
Situations arise when a person is significantly injured or suffering an impairment that prevents them from making medical and other care decisions for themselves. Arizona estate planning laws allow you to grant another person the right to make medical decisions for you in an Arizona Living Will. You may also, however, issue your own Advanced Healthcare Directives telling medical personnel what treatment you will accept and what medical procedures you do not want to be performed upon you.
What is a Probate Proceeding in Arizona?
A probate proceeding in Arizona is a formal court proceeding where the judge oversees that your wishes set forth in your Will and/or Family Trust are completed. There are specific Arizona probate laws that apply in those cases. The judge will oversee that the Executor you appointed in your estate planning documents is “closing up” your estate by paying your debts and distributing your assets.
The Executor will be responsible for documenting and providing an accounting of all of your assets, as well as monies being spent by the Executor to pay your bills until all of the tasks needed to be done are completed.
How Can You Avoid Probate of Your Estate in Arizona?
The creation of a Family Trust can avoid the need to go to probate court. The Family Trust, as the owner of the assets in the Family Trust, simply manages its own process through your appointed representative. That person still has an obligation to provide an accounting to all of your heirs and follow your wishes set for in your estate planning documents.
If a family member believes your representative is not fulfilling his or her obligations under the Family Trust, he or she can file a probate case and the court will then get involved to ensure your estate plan is administered as stated in your Will and/or Family Trust.
What Responsibilities do Executors and Trustees Have in Arizona?
As you can imagine, all of the person’s affairs must continue to be managed when they pass away. Bills need to be paid, assets may need to be sold and, most importantly, the terms of the deceased person’s estate planning documents must be completed. The person appointed as the Executor or Trustee performs all of those responsibilities. They must also provide an accounting of all assets and transactions he or she has done for the estate.
Your Executor or Trustee owes a fiduciary duty to your estate. This means he or she has to act in the best interests of your estate for the protection of your heirs and cannot simply be guided by his or her own interests. There is legal liability for breaching that duty; meaning the Executor or Trustee can be sued if they breach that fiduciary duty.
The Executor or Trustee will also be responsible to complete and file an income tax return for the estate. They typically refer the preparation of those tax returns to a CPA. They may also work with other financial advisers on the management of any investments held in the estate. So long as they exercise reasonable judgment on the decisions being made on behalf of the estate, they should not be held liable for any decisions that negatively impact the estate; like, for example, if the investments go down in value.
Typically, the end of the process occurs when all of the steps outlined in the estate plan have been completed. This may occur fairly quickly or may continue for years into the future if, for example, the estate contained terms outlining the Executor’s or Trustee’s continual payment, for example, of support to the deceased’s children or other family members over a period of time.
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