SHOULD YOU WRITE DOWN YOUR OWN LIVING TRUST?

By JacksonWhite Law Elder Law Attorneys

People often wonder if they could do their own estate planning.  A will can have guardians chosen for your children if something should happen to you.  A trust can hold assets for your benefit if you are not capable of managing them yourself.   Even if it seems easy and a smart idea, there are many things that could go wrong with writing a will or trust on your own.  These bloopers can cost you a lot more than you saved in legal fees.

In 1984, a man set up his own trust using a three-page form he purchased at an office supply store.  He documented a deed to transfer his home into the trust, but accidentally dated the deed 1983.  In 2009, this man wanted to borrow against his paid off mortgage on his home.  However, the mistake he made back in 1984 prevented him from receiving a loan from the bank because he didn’t have a clear chain of title to his home.  The problem was fixed over the course of two weeks and cost him $2,000 in legal fees.  That was about twice the amount he would have had to pay back in 1984 if he had a firm do it for him instead.

To make sure you and your family members receive the best return on your investment, it is essential that you put some time into planning your estate. We service the whole state of Arizona including Phoenix, Mesa, Scottsdale, Stafford, and Tucson. 

Contact the Arizona estate planning attorneys at JacksonWhite to have your estate assessed during a free estate planning consultation! Call (480) 818-6912.

For more information about JacksonWhite Elder Law or to download any of their free resources, feel free to visit:
www.arizonaseniorlaw.com/resources
www.arizonalongtermcare.com

www.myAltcs.com

SIBLING RIVALRY AND ELDERLY PARENTS

By Deloughery Law Office, PLC. of Deloughery Law, PLC

If you ask most people where they want to spend their final days, they will usually say that they would prefer to stay at home as long as possible. The reality, however, is that as a person becomes older they will require assistance from someone. It's only natural that one of those adult kids stepped in when this time comes.

Here's the challenge: Usually only one of the kids is going to become the caretaker. This raises all kinds of issues. Will the parent move in with the adult child who will be the caretaker? Do the other kids get along with that person? Will the caretaking child threaten to put the parent in a nursing home unless the parent transfers title to the house or bank accounts to that child? Does everyone trust each other?

The fact is that it is possible for a caregiver to convince the older person to change the estate plan and give more to the caretaking child than to the other children. The caretaking child says this only makes sense because he or she is giving up gainful employment (by tending to the parent rather than working at a job) and it is "only fair".

These can be very sensitive situations and the appropriate solution depends on the circumstances. If the family can be brought to a consensus, then traditional estate plan documents can often provide a framework for decision-making. These documents include using a health-care power of attorney, a general power of attorney, and sometimes a trust.

If there is a high degree of distrust or intense emotions involved, then it is probably appropriate to appoint a neutral third party as a guardian and conservator. I usually recommend using a licensed fiduciary in these circumstances. A fiduciary is a specially trained and licensed person who is experienced in dealing with high conflict situations.

An older person with declining health can be very vulnerable and susceptible to making financial and other decisions in favor of the caretaker. Ultimately the goal is to make sure that the older person is being well taken care of and protected.

Disclaimer: The information contained in this article is made available for general informational purposes only, and is not intended to constitute specific legal advice or to be a substitute for advice from qualified counsel. For that reason, you should not act or refrain from acting based on any information in this article without first obtaining advice from professional counsel qualified in the applicable subject matter and jurisdictions.

For more information, contact Deloughery Law @ www.delougherylaw.com  

FORMAL PROBATE VS. INFORMAL PROBATE

By Deloughery Law Office, PLC. of Deloughery Law, PLC 

What is formal probate (vs. informal probate)?

There are two distinctions in terms of how probate cases are handled. One has to do with whether a Petition is handled formally or informally. The other has to do with how much court involvement is needed during the course of a probate case.

Formal probate vs. Informal probate. Certain petitions can be granted informally by the Probate Registrar. For example, if he person dies with a validly executed will, and that will is submitted with all the correct documents, a personal representative or executor can be appointed on behalf of that presents a state without the need for a hearing. However, if the petition and accompanying documents do not fit within what the probate registrar is authorized to handle, then it must go before a probate judge or commissioner for ruling.

The probate case maybe started informally, but then may require a commissioner to rule on a petition. For example, even though a personal representative might have been appointed by the probate registrar informally, if the PR wants to have the court approved his or her legal fees and/or fiduciary fees, that would be filed as a petition requiring a hearing (i.e., formally).

Supervised vs. Unsupervised. Whether a petition in a probate action has been dealt with formally or informally has little to do with whether or not the case is supervised. Supervised administration means that the court must make decisions or approve actions before they are done. This usually happens when there is a significant about of money involved, and the various parties do not trust each other. If there is a dispute about what to do with assets, how to sell them, or how to distribute the sales proceeds, then the court would make all of these decisions on a step-by-step basis. One situation we have seen recently is when a trust owns commercial real estate and there is a dispute about who should be in control of the rental payments.  

A diagram might help show the different possibilities:

Formal-Unsupervised	Formal-Supervised
Informal-Unsupervised	Informal-Supervised

Notice that you can have any combination of formal/informal and supervised/unsupervised. For example, someone might be appointed Personal Representative informally, but then the family disagrees with how the estate is being handled so the court has to step in and make decisions (such as how assets are sold). On the flipside, the initial fight might be over whether a Will is valid or who should be the Personal Representative.  But once those initial issues are resolved the rest of the case goes along smoothly with little or no court involvement (supervision).

For more information, visit our website @ www.DelougheryLaw.com 

Surviving Spouse Has Some Protection Against Creditors

By Deloughery Law Office, PLC. of Deloughery Law, PLC 

The surviving spouse is protected up to $37,000 from creditors.  The historical intent of the Arizona statutes was to protect the surviving spouse when there were creditors so that the spouse's home and basic personal property is protected.

The surviving spouse is entitled to a homestead allowance of $18,000 to be paid from the surviving spouse's one-half interest in the estate. (See A.R.S. 14-2402.) This can be charged against any benefit or share that the surviving spouse receives by the deceased spouse's will, by nonprobate transfer or by intestate succession (unless otherwise provided by the decedent's will or by the governing instrument for a nonprobate transfer).

The surviving spouse can also keep up to $7,000 worth of household furniture, automobiles, furnishings, appliances and personal effects from his one-half interest. (A.R.S. 14-2403.) Note that this does not say the spouse gets $7,000 in cash. The statute specifically states that it is an entitlement to a "value that is not more than seven thousand dollars in excess of any security interests in that estate" in the types of property listed.

The surviving spouse can also get a family allowance of up to $1,000 per month (up to $12,000 total) of his one-half interest in the estate. (A.R.S. 14-2404.)  Inflation over the years has caused these values to seem less than exciting. And in most instances it is not worth litigating over $37,000. The way we normally see these allowances get handled is that the surviving spouse files a Notice of Intent to Claim Spousal Allowances, listing the amounts just mentioned. Then the Personal Representative will take that into account when paying creditors.

Also note that these amounts are payable out of the surviving spouse's interest. I see attorneys get this wrong occasionally, by claiming that this is something that gets paid off the top even at the expense of other beneficiaries. That is not what the statute says.

Take an example. Let's say an estate is worth $1 million, and there are creditors of $900,000.  There is a surviving spouse and also children of the decedent (who are not children of the surviving spouse). The surviving spouse would be entitled to $50,000 and the children are entitled to $50,000.
However, if the estate is worth $1 million and there is $1 million of debt, then without the statutes neither the surviving spouse nor the children would get paid. However, because of the statutes, the surviving spouse gets the $18,000 homestead allowance, $7,000 worth of personal property and $1,000 per month (up to $12,000). The children still don't get paid.

Interestingly, if there is a surviving spouse and minor dependent children not related to the surviving spouse, then the surviving spouse still gets the $18,000 homestead allowance, and the minor dependents get nothing. (Imagine a step-parent situation in which the surviving spouse figures that the dependents will get cared for by some other family members.) You can see some interesting scenarios in these days of step-parents and blended families.  

Visit us for more useful information @ www.delougherylaw.com 

Twilight Wish Foundation

ALTCS ~ Seniors and the Law

Seniors and the Law is authored by the attorneys at Jackson White Attorneys at Law and addresses legal issues that arise for the elderly and their families.  Questions can be sent to firm@jacksonwhitelaw.com.

Q:        I moved in with my mother about three years ago to provide her with care.  Since that time I have been able to attend to her needs, but I am starting to require some additional help.  I want to help Mom apply for the ALTCS program, but I hear that the state will take her home, which is troubling given that I currently reside in this home.  Is there advice you can offer?

Before I address your question, I want to address a piece of misinformation that seems to be guiding your assessment.  It is important to understand that the state never takes an ALTCS member’s home in exchange for ALTCS eligibility.  Rather, the general rule is that ALTCS can place a lien on an ALTCS member’s home if that ALTCS member’s spouse, minor child, or disabled child does not also live in the home.  The state can only enforce this lien upon the member’s death.

Assuming that you are no longer a minor child, then, ALTCS will likely attach a lien to the home if your mom qualifies for the program and if she is placed in a facility.  However, like most rules of generality, the rule that ALTCS can recover against the equity in its members’ homes does have a few exceptions.  One such exception seems to apply to the facts presented in the question above.

If the child of an ALTCS member has lived in that member’s home for a period of two or more years and has provided care to the ALTCS member that has kept that member from being institutionalized, the ALTCS member can transfer his or her home to the child without penalty.  ALTCS will need to examine the evidence before allowing this type of a transfer, but this is definitely worth exploring given the facts presented here.

           

Richard White is an elder law attorney at JacksonWhite Attorneys at Law.  For more information on Elder Law at JacksonWhite, please visit www.ArizonaSeniorLaw.com.

This article is provided for informational purposes only and is not intended to replace individual legal advice.

For more information about Jackson White Elder Law or to download any of their free resources, feel free to visit:  www.arizonaseniorlaw.com/resources

www.arizonalongtermcare.com or www.myAltcs.com

TRUSTS: Your Friend Can Inherit Your Property Without Probate

By Deloughery Law Office, PLC

Trusts help avoid probate and can also save taxes.  A trust is the best way to ensure that your friend can inherit all your property without having to go through probate or pay taxes. This is especially important if you are naming a friend (rather than a family member or spouse) as your beneficiary. 

Spouses, for example, have some special protections under the law.  Friends don't.

If you want your friend to inherit all your property upon your death, contact an estate planning attorney to help your create a trust. You will then transfer your property to the trust.  By property, I mean all your "stuff":  homes, vehicles, checking and savings accounts, personal possessions, etc.

I say that the best way is to have an estate planning attorney create a trust because if you use an online service, you never know what you are getting. The trust will name your friend as the beneficiary. Then the attorney can help you transfer your assets (your "stuff") to the trust. (The attorney can explain how to do this or help you do this.)

A related issue is how to prevent your family from raising Cain after you die. (You don't want your family suing your friend after your death, right?) One possible solution is to have your attorney send a letter to your "next of kin" saying that your have created a trust that names your friend as the sole beneficiary. You will want to keep copies of those letters with your estate planning documents. This will arguably start the statute of limitations for any family members who might file claims after your death. 

If you have any questions about trusts or how to enforce a trust after someone has died, let us know. We deal with these situations all the time.

To learn more visit our website at:  www.delougherylaw.com