Probate is the process by which a court distributes assets after someone dies. Unfortunately, probate proceedings are public record and often cost a great deal of money (typically a few thousand dollars, if no one is fighting and there are no problems or complications), take a minimum of 5-6 months to complete, and cause substantial hassles and family conflicts, on top of losing a loved one. That means that your family or other loved ones may have limited access to your money and assets after you die for at least 5-6 months! Thankfully, appropriate trust-based estate planning can help avoid probate entirely. It is important to note that Wills do NOT avoid probate – dying with a Will but no trust ensures probate.

If you do not create a will that names who you want to take care of and raise your minor children, the court is going to decide for you. Thankfully, you can decide who will raise your children if you plan appropriately.

If you do not create a proper estate plan, the state of Arizona will decide who will inherit your assets and in what percentages after your death through a probate.

Through a proper plan, you can protect your hard-earned money and ensure that it not only goes to whom you want, but when you want, and how you want. Additionally, you can help protect the assets from future lawsuits, creditors, bankruptcies, and even marriages or deaths. How can you protect your money against marriages or deaths? Imagine that after your death, one of your four children, your 20-year-old son, gets married to someone you wouldn’t have approved of. Five days after the big wedding, your son is killed in a tragic auto accident. Without additional planning, your new daughter-in-law is going to inherit all of your son’s assets, including the inheritance you left him at your death. Many people would prefer that their life savings would go to their surviving children in such a scenario, rather than the new spouse. The only way to protect against this type of scenario is to establish a quality estate plan.

Unfortunately, there are many people who see new widows and widowers are targets that can easily be taken advantage of. A newly widowed spouse has often received large infusions of cash because of life insurance or retirement account payouts. Meanwhile, they are often suffering from grief, shock, and vulnerability because of the death of their loved one. Such a combination can make them an easy victim for those who may which to con, cheat, or use them for their financial gain. A well-thought out estate plan can help protect against that by instilling provisions that limit how much the money the surviving spouse has access to at any given time. Of course, the surviving spouse must have sufficient means to provide for him or herself, but the ability to say “I cannot access all that money now” may make all the difference in the world.

Without a proper plan, a person with special needs risks being disqualified from receiving social security or Medicaid benefits (ALTCS or AHCCCS). Proper planning can help them stay qualified for such benefits, and can protect the assets you leave behind at the same time. Even if a child or other family member does not have special needs now, such provisions are typically included in many of our estate planning documents just in case the need arises later. Special needs may include, but is not limited to, the following conditions: autoimmune disorders; autism spectrum disorder; cancer; cardiovascular disorders; heart attacks; dementia; diabetes; liver disease; end-stage renal disease; hematologic disorders; HIV/AIDS; chronic lung disorders such as serious asthma or emphysema; chronic and disabling mental health conditions such as bipolar disorder, major depressive disorders, or schizophrenia; neurologic disorders such epilepsy, paralysis, Huntington’s disease, multiple sclerosis, Parkinson’s disease; and strokes.

Families that have children from prior relationships have special concerns that traditional families simply do not share. It is crucial for blended families to plan so that children and current spouses are provided for as you want. Failing to plan here will nearly always result in unintended and undesired consequences, such as the disinheritance of the children from prior relationships.

Unfortunately, life doesn’t always go the way we want it to. Many times, people lose mental or physical capacity long before they think they will. Car accidents, strokes, and heart attacks happen every day. If you have a comprehensive estate plan, you can plan for what happens if something happens to you, including how you are to be treated, and how is your money to be spent. If you do not have an estate plan, you have likely lost that ability, perhaps forever. Additionally, your family and loved ones may be unable to care for you legally (such as the inability to access your bank accounts to pay bills, or to make medical decisions on your behalf) if you have failed to plan, so they may be forced to seek a guardianship or conservatorship from the court. Those proceedings are types of probates and can easily cost several thousand dollars, all while wasting precious time. Thankfully, proper planning can avoid those scenarios.

If you fail to plan for what happens to your business after your death or incapacity, you have likely sentenced your business to death too. Very few small businesses survive the loss of its owner unless proper planning was done beforehand. You can choose who will own and control the business.

What you would have done if someone gave you $1,000,000 when you were 18-years-old? Bought a Ferrari? Houses? Dates? Drugs? Alcohol? Gambling? More than likely, that is what your children will do with their inheritance too if they receive it too young – waste it. It takes the average recipient of an inheritance a mere 19 days until they buy a new car. One study found that 70% of wealthy families lose their wealth by the second generation, and a stunning 90% by the third generation. Yes, that’s right, in 70% of cases, mom and dad’s life savings (including life insurance) is spent by their kids and nothing makes it to the grandkids. It does not matter if the inheritance is $10,000,000 or $20,000 – it is gone quickly most of the time. Do you want your life savings spent way? If not, you need to set up a trust based estate plan to ensure that doesn’t happen. There are ways to prevent children from wasting their inheritance, but they require planning. A simple Will doesn’t cut it.