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Category Archives for Estate Planning

Are Handwritten Wills Enforceable? Princess Diana Thought So…

Princess Diana was one of the world’s most loved celebrities – and one of the richest.  Her tragic death in 1997 was world news. The majority of her estate, reportedly worth $40 million at the time of her death, was divided between Prince William and Prince Harry in her estate plan. However, she also prepared a handwritten will that directed her executors to give a number of personal effects to her godchildren. Those executors, her mother and her sister, went to court and had it ruled unenforceable.

However, she also prepared a handwritten will that directed her executors to give a number of personal effects to her godchildren. Those executors, her mother and her sister, went to court and had it ruled unenforceable.

Sorrell Law Firm, PLC 7575 E Redfield Rd Suite # 217, Scottsdale, Arizona 85260 (480) 776-6055

Holographic (Handwritten) Wills – Sometimes Enforceable, Sometimes Not

Princess Diana’s letter of wishes is similar to what’s known as a “holographic” will in the United States. In its most simple terms, it is a handwritten document which may or may not have to be signed.

State laws vary on whether holographic wills can be enforced and how they must be prepared.  Approximately half of U.S. states allow them and those require the matter to be probated. Some of the issues which frequently arise concerning handwritten wills include:

  • Validity: Did the decedent write the will? In contested cases, handwriting experts are often used to determine validity.
  • Undue Influence: Was the decedent unduly influenced to create the will? That’s difficult to prove – or disprove – as they do not have to be witnessed.
  • Intentions: Does the will accurately describe the decedent’s intentions? Again, without witnesses (creating an actual last will and testament generally requires two), that becomes difficult to answer.

The question becomes – if you believe that no one will contest your holographic will (and it is legal in your state), should you skip the lawyers altogether? The answer is NO.

Don’t Subject Your Wishes to Scrutiny

The whole purpose of creating an estate plan that spells out your intentions upon death is to make it enforceable. Although last will and testaments still go through probate, they provide the court with a signed and witnessed document which is likely to reflect your intentions. Want to avoid probate altogether? Then you may want to consider a “Living Trust” based Estate Plan. Handwritten wills are less likely to hold up in court and will be subject to a great deal more scrutiny.

The bottom line is that creating a will, a trust, or any other type of estate planning document is easy – when handled by an estate planning attorney. In effect, the process is simple and consists of having a conversation about your intentions, listing assets, and creating a legal document which will carry those intentions out. Sadly, Princess Diana’s godchildren got nothing. Don’t let someone else decide what you did, or did not, intend.

Call our office at 480-776-6055 now and we’ll help you determine which type of Estate Plan is best for you and your goals.

Living Trust Incentive Provisions

This edition of Whitney’s Tax Files answers a question from a client who asks, “How can I stop my kids from blowing the money after I die?” Well, the statistics show that most people go through their inheritance after about ten months, and most estate plans, the standard forms that you see, they say, “Give my kids all the income every year, and then they can have a third, a third, a third at this age, that age, and the other age.” Essentially, we are not providing any incentive for our children, and so long as our children survive to the next year, they get more money, whether they’re being responsible or not, so there’s a couple things that we can do to protect them from themselves.

I see a lot of clients liking incentive-types of provisions, so an incentive provision would say instead of, “Give my kids money every year,” it would say, “Let’s match my children’s adjusted gross income by 50 percent,” or whatever percent is appropriate. Now, we don’t want to discourage the children from entering good lifestyle choices. If the child is a police officer or in the military or joins the clergy, or is a schoolteacher, we don’t want to discourage good lifestyle choices that are responsible, so in those cases, we can match at a higher rate. But what if the child makes money, a lot of money, but has two or three DUIs or gets in trouble with the law or is doing acts of dishonesty or acting irresponsibly? Well, we can give flexibility in the trust so that the trustee can reduce their matching provisions, so this is a way to guide the children after you’re dead to encourage them to be responsible, contributing members of society.

Okay. Well, if these types of provisions are interesting to you, we can certainly help you with this, so give us a call at (480) 776-6055.





Will or a Trust? What’s the difference?

“What is the difference between a will and a trust, and why would I want a trust and not a will?” A will is a document that says, “Upon my death, here’s what happens to my assets.” It does nothing while you’re alive. So, if you’re alive and you become disabled, the will doesn’t help because it’s not yet effective, and so you need to go to a guardianship or conservatorship type of proceedings, and it’s expensive and not desirable.

A trust, on the other hand, would be effective immediately, so as soon as you sign a trust, you transfer legal title to your assets into your trust, and, thereafter, the provisions of your trust controls your assets. You can be the trustee of your trust, so you have total control over your assets, you still own all of your assets, and, while you’re alive, your assets are not going to be subject to a conservatorship or guardianship type of proceeding. Upon your death, a trust can say where your assets go, to who, under what terms. A will can do that, also. But, with a will, upon your death you go to probate. This means you go to court. You file a bunch of pleadings with the court. You give notice to everyone. You have to allow people that might have a claim to come bring their lawsuits against the probate estate. There are costs, and it’s a public proceeding, so the whole world knows what your assets are.

But, with a trust, the administration is private. You put the terms of your trust in your trust, and those are the terms and those are the instructions that your trustee will follow. It’s done privately, there are no court proceedings, there are no public disclosures, and then your trust can continue to live well after your death in a manner that can protect your assets in the hands of your children. So the trust can say, “Hey, hold the assets for my child, pay for my child to go to college, pay for additional things for my child, let my child have money at certain times during their life.” But, if your child were sued, divorced, files bankruptcy, gets levied by the IRS, none of the creditors can come to the trust and take your child’s assets. So this is the difference between a will and a trust, and, of course, a trust is much superior in the end result to your family.

Wills vs. Trusts

Confused about the differences between wills and trusts?  If so, you’re not alone. While it’s always wise to contact experts like us, it’s also important to understand the basics. Here’s a quick and simple reference guide:

What Revocable Living Trusts Can Do – That Wills Can’t

  • Avoid a conservatorship and guardianship. A revocable living trust allows you to authorize your spouse, partner, child, or other trusted person to manage your assets should you become incapacitated and unable to manage your own affairs. Wills only become effective when you die, so they are useless in avoiding conservatorship and guardianship proceedings during your life.
  • Bypass probate. Property in a revocable living trust does not pass through probate. Property that passes using a will guarantees The probate process, designed to wrap up a person’s affairs after satisfying outstanding debts, is public and can be costly and time consuming – sometimes taking years to resolve.
  • Maintain privacy after death. Wills are public documents; trusts are not. Anyone, including nosey neighbors, predators, and unscrupulous “charities” can discover the details of your estate if you have a will. Trusts allow you to maintain your family’s privacy after death.
  • Protect you from court challenges. Although court challenges to wills and trusts occur, attacking a trust is generally much harder than attacking a will because trust provisions are not made public.

What Both Wills & Trusts Can Do:

  • Allow revisions to your document. Both wills and trusts can be revised whenever your intentions or circumstances change so long as you have the legal capacity to execute them.

WARNING: There is such as a thing as irrevocable trusts, which cannot be changed without legal action.

  • Name beneficiaries. Both wills and trusts are vehicles which allow you to name beneficiaries for your assets.
  • Wills simply describe assets and proclaim who gets what. Only assets in your individual name will be controlled by a will.
  • While trusts act similarly, you must go one step further and “transfer” the property into the trust – commonly referred to as “funding.” Only assets in the name of your trust will be controlled by your trust.
  • Provide asset protection. Trusts, and less commonly, wills, are crafted to include protective sub-trusts which allow your beneficiaries access but keep the assets from being seized by their creditors such as divorcing spouses, car accident litigants, bankruptcy trustee, and business failure.

While some of the differences between wills and trusts are subtle; others are not. Together, we’ll take a look at your goals as well as your financial and family situation and design an estate plan tailored to your needs. Call us today at 480-776-6055 and let’s get started.

Estate Planning: 3 Reasons We Run the Other Way

We understand that it feels hard to get around to estate planning; it sounds about as fun as getting a root canal. However, we also understand that we all want to make sure that our loved ones are protected and receive our hard-earned assets – regardless of whether we have $10 million or $10,000.

Don’t let these common roadblocks stop you from protecting yourself and your family:

  1. Who Wants to Talk About Death? Discussions of death, dying, and illness – money and family – will and trusts – make many folks uncomfortable. Of course, that’s normal.  But, don’t let a few minutes of feeling uncomfortable stop you from taking care of yourself and your loved ones.
  1. This Isn’t a Good Time. Everyone is busy. We understand that, but there’s never going to be a better time. Call our office, get it on the calendar, and get it done.
  1. I Don’t Get It. Estate planning is documented in legal papers; finances are discussed; the law is analyzed. It’s common to feel uncomfortable in a world you’re not familiar with.  If that’s what you are thinking, you are not alone.  We will translate complex legal concepts into everyday layman’s terms for you, just like we do for everyone else.

The truth is that estate planning isn’t really that bad. In fact, with our help, estate planning is easy. We’ll chat with you about your goals and concerns, analyze your family and financial situation, and work with you to come up with a solid plan. You provide the information, which we always keep confidential, and we’ll take care of everything else.

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