Often estate planning clients come in with specific goals for their estate plan. They may want to disinherit someone, or leave their estate to charity. They may want a specific types of estate plan after reading about it online. Their goal may even be just to get an estate plan, any estate plan, done before an upcoming surgery.
There is nothing wrong with having goals for your estate plan. In fact, you should have some goals! But, often times, a client’s goals will focus very heavily on one piece of the estate planning puzzle. When starting the estate planning process, there are many considerations that you and your estate planning attorney should consider.
Legal considerations
When discussing estate planning your attorney is likely thinking about these legal considerations. They might well be the same things that brought you into the office.
- Tax minimization. The federal estate tax exemption is currently $13.61 million per person, for deaths in 2024. That means an individual can leave $13.61 million to heirs and pay no federal estate tax. This is doubled for a married couple. In 2026, the basic federal estate tax exclusion amount is expected to drop by 50% unless Congress makes further changes. Of course, that may leave plenty of room for you to avoid estate taxes. Arizona does not impose a separate estate tax, but if you have property in other states, or are planning on moving, your attorney is taking that into consideration. Depending on the types of assets that you have, your attorney may also be thinking about capital gains tax implications. For example, there may be tax benefits to making charitable donations from some retirement accounts rather than from other assets.
- Dispositive provisions. One of the primary purposes of an estate plan is to transfer assets on your death. When making recommendations about estate planning, your attorney is likely considering the most efficient way to transfer those assets while remaining consistent with your goals. For example, if you want not only to leave money to your children, but also control how they spend it, your estate planning attorney will likely recommend some sort of trust.
- Probate avoidance. Most of the time, clients want to avoid probate. It gets a bad reputation for being invasive, time-consuming and costly. But, probate is not always bad — or at least not as bad as people think. There may be benefits of your estate going through probate that you may not realize. Your estate planning attorney is likely taking this into consideration.
- Qualification for benefits. If you or one of your beneficiaries may qualify for means-tested government assistance now or in the future, this may require special planning and provisions. For example, an estate planning attorney may recommend you leave assets to a special needs trust for a beneficiary who risks losing their benefits due to a large inheritance.
- Planning for incapacity. Often times, clients don’t realize that estate planning is not only for planning for your assets after your death. It also includes planning in case you become incapacitated during your lifetime. Earlier this year we wrote a whole newsletter with details on planning for your own incapacity. Just know that when discussing your estate plans, your estate planning attorney is also considering the possibility that you may become incapacitated.
Non-legal considerations
Legal considerations are not the only considerations though. Estate planning attorneys are also likely taking into account your budget, your desire for simplicity, and your schedule.
- Simplicity. Estate plans vary in their complexity. If you have a preference for simplicity or complexity, an estate planning attorney will take that into account. Depending on what you are trying to accomplish or your life circumstances though, your estate plan may need to be more complex or simplified. For example, if you have a blended family with a large estate including real property all over the world, your estate plan is likely going necessitate more complex planning. On the other hand, if you think you want a living trust, but are unwilling to do the requisite trust funding, your estate planning attorney may suggest a simplified estate plan.
- Budget. The more complex your estate plan is, the more it likely costs. If you are cost conscious, your estate planning attorney is likely taking that into consideration too when recommending an estate plan to you.
- Timeline. Estate plans take time to draft and refine. In our practice, we get a lot of snow birds hoping to leave town for the summer. We also see clients who have major surgeries or travel plans on the horizon. Your estate planning attorney is also likely considering your timeline during your initial estate planning consultation.
Information we need from you
Sometimes when clients schedule their estate planning consultation with our office, they are surprised by how extensive our pre-appointment estate planning questionnaire is. We really do need all of the information we ask for.
In order to take into account all of the considerations above (and more), estate planning attorneys need accurate information about the people involved. This includes full names of beneficiaries, ages of beneficiaries, disability status and contact information. We also need information about assets like the types of assets, amounts of assets (at least an estimate) and how assets are titled. Your attorney may also want to know about other advisors you work with to manage your investments or who your accountant is. They also likely want to know about you, what are your goals for your estate plan, what is important to you, what is your budget and what are your travel plans, so we can make sure your plans get done before you go.
One Response
In your article, “Are There Benefits to the Probate Process?” referenced in today’s article on “Estate Planning Considerations,” you state “The court oversees each probate and ensures that the administration of the each estate is done according to state law.”
In Arizona?
The “Order to Personal Representative” set forth on the website of the Pima County Superior Court, and available elsewhere, contains the following:
“This Court will not review or supervise your actions as Personal Representative unless an
interested party files a written request to the Court. In Arizona, if you are a beneficiary of an
estate, you are expected to protect your own interests in the estate.”
The personal representative is required to mail a copy of the order to the beneficiaries, and to file proof of mailing, within a specified time. If the personal representative fails to file the proof of mailing within the time required, what action does the court take?