The country is currently waiting to see what the effects of the Coronavirus will be. Many people have taken to “social distancing,” keeping away from groups and crowds and limiting exposure to others. We’ve received calls from people asking how they can keep a distance but still take measures to address their estate plans. We thought about what people can do in Arizona, here is what we came up with:
Review your plan.
Whether you have a formal estate plan or not, your assets will go somewhere and someone will be able to take care of your estate… it just might cost more and take more time. A few simple steps will get you started:
- Check your beneficiary designations, also known as Pay on Death (POD) or Transfer on Death (TOD) designations. Most accounts you own can be designated to pay on death to a certain person or persons. These accounts will go around probate and will not pass through the will, they will instead be transferred directly to the beneficiaries named, and in the percentages named.
- Look at old documents, including your Trust, Last Will and Testament, Durable Power of Attorney (Financial), Health Care Power of Attorney and/or Living Will. Be sure you can identify the Trustees on your Trust, the Agents on your powers of attorney, and the Personal Representative on your last will and testament. You should also be familiar with the distributions that would occur on your death. You should know how assets will be transferred, who they will be transferred to, and whether they are still held in trust after death.
- Identify Discrepancies by asking:
- Is my house in the trust?
- Are my beneficiary designations set?
- Do I have a succession plan for my LLC?
- Do I want to transfer to these beneficiaries?
- Have I named the right agents, should I change them?
- Are the assets I have outside the trust with no beneficiary designation worth more than $75,000 in personal property or $100,000 in real property (generally real estate)
Consider the results of your plan.
As I said, everyone has a plan, some work better, cheaper, or faster than others. Here are a few things to consider:
- In Arizona, if you have more than $75,000 in personal property or $100,000 in real property that is not in trust or does not have a beneficiary designation, that property will need to go through probate… even with a last will and testament. Probate is the procedure by which a last will and testament is proved by the Court, or where Arizona law determines the distributions in an estate where there is no Last Will and Testament.
- In Arizona, if you have no Last Will and Testament, Arizona Statutes A.R.S. § 14-2102 and A.R.S. § 14-2103 determine how your assets will pass. Generally, if you are married, your spouse will receive all assets if you have no children or if all children are from the same relationship. Generally, if you are not married, your assets will pass to your children in equal parts. More complicated scenarios arise where there are children from a previous relationship, one child predeceases you and there are grandchildren, or where there are no or few relatives.
- If you do not have Power of Attorney for financial purposes, a conservatorship would need to be established in Court to supervise the fiduciary who will be acting. Priority in that situation is shown in A.R.S. § 14-5410.
- If you do not have Power of Attorney established for Healthcare, A.R.S. § 36-3231 describes the people health care providers should look to and contact in order to make decisions.
Act to Ensure the Plan is Maximized.
- You can change beneficiary designations with many organizations online. If you’re worried about probate or want to make sure certain people get the majority of your assets, change the designation.
- If you’re trying to name or disinherit someone not in line according to state law, you can write a holographic will in accordance with A.R.S. § 14-2503. A holographic will is a handwritten will dated and signed in the testator’s own handwriting.
- Prepare an Arizona MVD Beneficiary Designation Form for any cars you’d like to pass around probate.
- Revoke a will in accordance with A.R.S. § 14-2507 to be sure that the provisions you made 25 years ago will not be the operative.
- Email Copies of all documents to your agents or kids (at your discretion). For those who want to make sure an agent has full authority, an email of current estate planning documents to the agents involved is a proactive step toward making sure your current estate plan is the one that is followed.
You may not be able to fix everything right now, but you can take steps to make sure major assets go where you want them. Be safe, be clean, be smart and try to make the best of a difficult situation. We are practicing recommended social distancing, and hope everyone does their part to make sure we come out stronger on the other end of this pandemic.
