Arizona Estate and Trust Law Practitioners

Five Myths of Estate Planning

Clearing the Misconceptions

Conversations with loved ones, friends and colleagues provide a wealth of useful information. Unfortunately, with regard to estate planning, much of the information we get from these sources ranges from slightly misleading to blatantly inaccurate. Here are the most common misconceptions about estate planning:

Myth 1

Estate planning is all about asset distribution.

This is simply false. While the distribution of assets is an important part of your estate planning documents, it is very rarely the primary concern. In most cases, more important considerations include:

Myth 2

A will is unnecessary if you plan on leaving everything to your spouse and children.

When a person dies without a will, their assets are distributed via state intestacy laws. It is important to remember that these laws are not written to discourage people from making wills. Instead, they are intended to mimic what the deceased would have done with their assets had they written a will. The laws are based on assumptions that may or may not be true.

Generally, in Arizona, assets of a deceased spouse transfer to the surviving spouse and, failing that, to the children. However, the distribution becomes much more complex in many situations, such as when multiple family members die at the same time or if there are children from a prior relationship.

Intestacy laws may, in fact, distribute your estate exactly how you would want it. However, unless you have expert knowledge of intestacy laws, you can't be certain. With a well-written will, you can.

Further, as mentioned under "Myth 1," a will isn't just about asset distribution. You probably do not want to rely on the Arizona law "defaults" to handle those important matters.

Myth 3

I can write my own will. It is not that hard.

A self-made, handwritten will is called a "holographic will" and is recognized in Arizona and some other states.

If you have no will and have decided you will not enlist the services of an attorney to create one, I encourage you to create a holographic will. The holographic will is certainly superior to having no will at all.

That said, drafting a will is not as simple as you might think. When people draft holographic wills, they tend to write in common, everyday terms. Legal terms have very precise definitions that might not be the same as in everyday use. Problems can arise when these definitions differ A simple example is the word "children." When many people use this word, they are speaking not only of their biological children, but step- children, perhaps foster children, and possibly other minor relatives that live in the same home. However, Arizona law explicitly excludes these persons from the definition.

When someone expresses a desire to draft her own will, Tim Olcott, the owner of the firm and a certified specialist in estate planning, often says the following: "I don't know about you, but l rarely perform surgery on myself."

The point is, drafting a will is as complicated as it is important.

Myth 4

Will writing software and form books are just as good and much less expensive than hiring an attorney.

When it comes to using form books or software to write your will, there are two absolute truths: First, you will spend less money. Second, the quality of the document will be inferior.

The primary reason behind both of the above truths is the same. I call it "One-Size-Fits-All" estate planning. These products are intended to cover all bases, rich or poor, single or married, no children to a dozen children. It is less expensive because the product doesn't tailor the will to your specific needs.

Unfortunately, it is also inferior for several reasons. First, because it is intended for use by such a wide array of people, it is going to have sections and clauses (perhaps pages) that have no application to your estate whatsoever.

Second, there is no interactive dialogue between you and your planner. This back-and-forth between you and your planner is crucial because the planner assesses what is most important to you and what your special needs are, altering the document accordingly.

Finally, the document is difficult to understand. Because of the length, the language, and the lack of dialogue with an attorney, it is likely that you will not understand the majority of its contents. That is unacceptable. A will is a document of utmost importance, and you should understand its effect. A good estate planning attorney will be happy to review the document with you, paragraph-by-paragraph, and explain why each provision is included and what the effect that provision has.

Myth 5

Estate planning attorneys are too expensive!

There is no shying away from the fact that there is a significant cost to hiring an attorney to plan your estate. However, it is a necessary cost, and it is not as expensive as you might think. Attorney offices, including this one, often offer free initial consultations, flat fees, spouse packages and payment plans.

© Timothy A. Olcott, P.C. All rights reserved.