How to Plan your Estate in Arizona (FAQ)
What is estate planning?
My educational approach to estate planning focuses on these five objectives:
What documents do I need?
The essential components of any estate plan include:
Other more comprehensive components might include:
Do I need a lawyer?
Yes, if you want to do it right, then enlist the help of an estate planning lawyer.
Perhaps you are tempted to do your own estate plan as a do-it-yourself project. You could buy some software that purports to produce “attorney-drafted documents good in all 50 states.” You might even follow its directions carefully and produce a decent result. However, the use of a computer program will be successful only if (1) the program supplies the options you need, and (2) you understand the options well enough to choose the best one (or notice that the best one is missing). If you are not familiar with the methodology and mathematics involved with designing an estate plan, there will be no way for you to know whether the software produced a realistic and appropriate result. Generally, the saying, “He who has self for an attorney has a fool for a client” applies in the area of estate planning.
I recognize that many people are not persuaded by the above argument, so here is the longer version if you're still tempted by LegalZoom or other do-it-yourself options: 4 Reasons to Avoid Do-It-Yourself Apps.
Are you sure? My situation is different.
I often interact with people who oversimplify their situation and ignore the nuances. They make a quip about how simple their estate plan would be. But these people ignore the various problems that may occur when they avoid comprehensive planning. And they often gloss over the underlying concerns they should have with family dynamics like sibling rivalry, capital gains tax issues, and the need for inheritance protection.
On the other hand there are people who overstate the uniqueness of their situation. They might have divorced multiple times, a complicated family tree with step-grandchildren, a drug-addicted child, the proverbial black sheep, IRS tax problems, oil and gas interest, or unusual medical conditions. But these people forget that almost every family in America is a "blended family" and has its own complex issues. The unusual situation they describe is one an experienced estate planning lawyer has likely dealt with many times before.
I don't have much. Should I bother using an estate planning lawyer?
I was having lunch with a young professional who inquired about my law practice. He asked me, "At what point should I consider hiring you as my estate planning lawyer rather than simply relying on self-help will preparation software?" I think what he was really asking was, "How much wealth must I accumulate before the benefits of getting professional counsel outweigh the costs of paying for it?" These are interesting questions. My response was to describe four triggering events, any of which calls for the expertise of an estate planning lawyer. Here they are:
I hope that helps you too.
I have a will. Isn't that enough?
Many people sign a Will and nothing more. Unfortunately, the effect of a Will is to facilitate the probate process. A comprehensive estate plan will usually include a revocable living trust as an alternative to the Will. A living trust aims to eliminate the need for probate court involvement in the event of death or extended incapacity.
A comprehensive estate plan also includes planning for tax-advantaged assets (e.g., IRA, 401k, 403b, annuity, cash value life insurance). These assets, which typically add up to a large percentage of a person's net worth, are governed by beneficiary designations and subject to complex rules.
A comprehensive estate plan should address how to coordinate these tax-advantaged assets with the assets governed by a Will or living trust. If you have retirement accounts, annuities, or cash value life insurance, then you need to get counsel from someone who knows the latest estate planning strategies for dealing with these assets. A simple Will doesn't cut it. Neither does a do-it-yourself software program. Neither does an accountant, financial advisor, or an "estate specialist" they refer you to. You need an experienced estate planning lawyer.
Can't I just make my child joint owner of my assets?
No. This is a very common mistake. Here's why:
Do you help people outside of Tucson?
Yes, certainly. However, I do require the initial meeting to occur in person at my office.
Do you help people who live outside of Arizona?
Yes, occasionally. These situations are usually limited to cases where the client owns property in Arizona.
How is the fee determined?
In order to maintain a logical, consistent, and fair pricing system, most services I provide use a fixed fee arrangement. In other words, you will usually know the project cost before any work begins. The initial estate planning consultation is complimentary with no obligation to proceed. Reduced prices may be available if you need to update an estate plan prepared by another law firm.
Do you accept credit cards?
Yes. I prefer payments by check and cash because of the card processing fees, but most clients pay by credit or debit card.
Do you offer payment plans?
Yes. I subscribe to LawPay, which offers a legal fee financing solution called Pay Later.
Do you offer a complimentary initial consultation?
I provide complimentary initial meetings to prospective clients who reside in Arizona. The usual topics include wills, living trusts, irrevocable trusts, durable power of attorney, and health care directives. The purpose of the initial meeting is to become acquainted with each other and evaluate your estate planning needs. You will have an opportunity to share your story and any special concerns you have about the process. A fee quote will usually be provided, but there is no obligation to proceed.
What should I bring to the first meeting?
Please complete my Estate Planning Questionnaire prior to the initial meeting. The questionnaire app is posted on the New Client Forms page of this website and takes about 15 minutes to complete on your computer or mobile device. If you are unable to complete the questionnaire prior to the meeting, please come anyway. The interactive app uses logical programming to acquire some helpful background information about you, which is intended to increase productivity during the initial meeting. However, your completion of the questionnaire is not a prerequisite.
Please bring along copies of the following documents if you have them:
You are welcome to show me photographs of your children or other loved ones who may be included in your estate planning documents. It definitely helps when I can put a face to a name.
Is there a recurring annual fee to remain a client?
No. A common approach by estate planning lawyers is to charge an annual fee whether or not changes are actually made. I tried this approach many years ago and then abandoned it. The concept of offering a membership program never felt right in this context, and I couldn't find the right price point to justify my time on it. My solution - recommended by the esteemed lawyer Phil Kavesh - is to schedule courtesy follow-up letters without charging a costly annual membership fee. I encourage past clients to update and refresh their estate plans every 7 to 10 years, or when a major life change occurs. Most projects of this nature are billed at an hourly rate (currently $400), although some will use a fixed fee arrangement instead.
About the Author
Thomas J. Bouman provides legal counsel in the areas of estate planning, estate settlement, and asset protection. He brings a highly systematic approach to the practice of law, which is critically important when wading through the complex, and often bizarre, legal requirements associated with estate and trust law. Mr. Bouman is author of the Arizona Estate Administration Answer Book and a prominent member of Wealth Counsel, LLC, the nation’s premiere organization of estate planning attorneys.
My educational approach to estate planning focuses on these five objectives:
- Fulfill Parenting Responsibilities: Make certain that dependent children are taken care of upon death or incapacity of parents.
- Get Organized: Avoid unnecessary costs, delays, and loss of privacy upon death or incapacity.
- Protect Inheritance for Heirs: Restrict or protect inheritance for beneficiaries as appropriate.
- Model Good Stewardship: Minimize estate, gift, and income taxes.
- Protect Assets During Lifetime: Protect assets from "creditors, predators, in-laws, and out-laws."
What documents do I need?
The essential components of any estate plan include:
- Will
- Financial power of attorney
- Health care power of attorney
- Beneficiary designations (for life insurance, retirement accounts, etc.)
Other more comprehensive components might include:
- Beneficiary deed
- Living will declaration
- Revocable living trust
- Irrevocable decedent's trust
- Irrevocable QTIP trust
- Inheritance protection trust
- IRA beneficiary trust
- Asset protection trust
- Qualified personal residence trust
- Irrevocable life insurance trust
- Limited liability company
Do I need a lawyer?
Yes, if you want to do it right, then enlist the help of an estate planning lawyer.
Perhaps you are tempted to do your own estate plan as a do-it-yourself project. You could buy some software that purports to produce “attorney-drafted documents good in all 50 states.” You might even follow its directions carefully and produce a decent result. However, the use of a computer program will be successful only if (1) the program supplies the options you need, and (2) you understand the options well enough to choose the best one (or notice that the best one is missing). If you are not familiar with the methodology and mathematics involved with designing an estate plan, there will be no way for you to know whether the software produced a realistic and appropriate result. Generally, the saying, “He who has self for an attorney has a fool for a client” applies in the area of estate planning.
I recognize that many people are not persuaded by the above argument, so here is the longer version if you're still tempted by LegalZoom or other do-it-yourself options: 4 Reasons to Avoid Do-It-Yourself Apps.
Are you sure? My situation is different.
I often interact with people who oversimplify their situation and ignore the nuances. They make a quip about how simple their estate plan would be. But these people ignore the various problems that may occur when they avoid comprehensive planning. And they often gloss over the underlying concerns they should have with family dynamics like sibling rivalry, capital gains tax issues, and the need for inheritance protection.
On the other hand there are people who overstate the uniqueness of their situation. They might have divorced multiple times, a complicated family tree with step-grandchildren, a drug-addicted child, the proverbial black sheep, IRS tax problems, oil and gas interest, or unusual medical conditions. But these people forget that almost every family in America is a "blended family" and has its own complex issues. The unusual situation they describe is one an experienced estate planning lawyer has likely dealt with many times before.
I don't have much. Should I bother using an estate planning lawyer?
I was having lunch with a young professional who inquired about my law practice. He asked me, "At what point should I consider hiring you as my estate planning lawyer rather than simply relying on self-help will preparation software?" I think what he was really asking was, "How much wealth must I accumulate before the benefits of getting professional counsel outweigh the costs of paying for it?" These are interesting questions. My response was to describe four triggering events, any of which calls for the expertise of an estate planning lawyer. Here they are:
- When equity in real estate exceeds $100,000
- When cash and non-retirement investments exceed $75,000
- When retirement investments exceed $100,000 per non-spouse beneficiary
- When life insurance death benefits exceed $250,000 per non-spouse beneficiary.
I hope that helps you too.
I have a will. Isn't that enough?
Many people sign a Will and nothing more. Unfortunately, the effect of a Will is to facilitate the probate process. A comprehensive estate plan will usually include a revocable living trust as an alternative to the Will. A living trust aims to eliminate the need for probate court involvement in the event of death or extended incapacity.
A comprehensive estate plan also includes planning for tax-advantaged assets (e.g., IRA, 401k, 403b, annuity, cash value life insurance). These assets, which typically add up to a large percentage of a person's net worth, are governed by beneficiary designations and subject to complex rules.
A comprehensive estate plan should address how to coordinate these tax-advantaged assets with the assets governed by a Will or living trust. If you have retirement accounts, annuities, or cash value life insurance, then you need to get counsel from someone who knows the latest estate planning strategies for dealing with these assets. A simple Will doesn't cut it. Neither does a do-it-yourself software program. Neither does an accountant, financial advisor, or an "estate specialist" they refer you to. You need an experienced estate planning lawyer.
Can't I just make my child joint owner of my assets?
No. This is a very common mistake. Here's why:
- Your child no longer has a fiduciary duty to manage the asset in your best interest.
- Making your child a joint owner is an irrevocable gift. You can't change your mind if the relationship changes, and you may have to file a gift tax return.
- If you decide to sell the asset, you will need permission from the child.
- You may create family conflict by excluding your other children.
- You expose your own assets to the creditors of your child. For example, if your child is at fault in a car accident, the other driver may seek to attach your joint asset as part of the judgment.
- Your child loses the full step-up in tax basis at your death. For real estate, this means the possibility of capital gains taxes that would otherwise be avoided.
Do you help people outside of Tucson?
Yes, certainly. However, I do require the initial meeting to occur in person at my office.
Do you help people who live outside of Arizona?
Yes, occasionally. These situations are usually limited to cases where the client owns property in Arizona.
How is the fee determined?
In order to maintain a logical, consistent, and fair pricing system, most services I provide use a fixed fee arrangement. In other words, you will usually know the project cost before any work begins. The initial estate planning consultation is complimentary with no obligation to proceed. Reduced prices may be available if you need to update an estate plan prepared by another law firm.
Do you accept credit cards?
Yes. I prefer payments by check and cash because of the card processing fees, but most clients pay by credit or debit card.
Do you offer payment plans?
Yes. I subscribe to LawPay, which offers a legal fee financing solution called Pay Later.
Do you offer a complimentary initial consultation?
I provide complimentary initial meetings to prospective clients who reside in Arizona. The usual topics include wills, living trusts, irrevocable trusts, durable power of attorney, and health care directives. The purpose of the initial meeting is to become acquainted with each other and evaluate your estate planning needs. You will have an opportunity to share your story and any special concerns you have about the process. A fee quote will usually be provided, but there is no obligation to proceed.
What should I bring to the first meeting?
Please complete my Estate Planning Questionnaire prior to the initial meeting. The questionnaire app is posted on the New Client Forms page of this website and takes about 15 minutes to complete on your computer or mobile device. If you are unable to complete the questionnaire prior to the meeting, please come anyway. The interactive app uses logical programming to acquire some helpful background information about you, which is intended to increase productivity during the initial meeting. However, your completion of the questionnaire is not a prerequisite.
Please bring along copies of the following documents if you have them:
- Wills
- Copies of property deeds
- Powers of attorney
- Living will declarations
- Trust documents
- Life insurance policy info
- Annuity policy info
- Recent statements from investment accounts
You are welcome to show me photographs of your children or other loved ones who may be included in your estate planning documents. It definitely helps when I can put a face to a name.
Is there a recurring annual fee to remain a client?
No. A common approach by estate planning lawyers is to charge an annual fee whether or not changes are actually made. I tried this approach many years ago and then abandoned it. The concept of offering a membership program never felt right in this context, and I couldn't find the right price point to justify my time on it. My solution - recommended by the esteemed lawyer Phil Kavesh - is to schedule courtesy follow-up letters without charging a costly annual membership fee. I encourage past clients to update and refresh their estate plans every 7 to 10 years, or when a major life change occurs. Most projects of this nature are billed at an hourly rate (currently $400), although some will use a fixed fee arrangement instead.
About the Author
Thomas J. Bouman provides legal counsel in the areas of estate planning, estate settlement, and asset protection. He brings a highly systematic approach to the practice of law, which is critically important when wading through the complex, and often bizarre, legal requirements associated with estate and trust law. Mr. Bouman is author of the Arizona Estate Administration Answer Book and a prominent member of Wealth Counsel, LLC, the nation’s premiere organization of estate planning attorneys.