Why You Need an Estate Plan to Protect Your Family and the High Cost of Procrastination and Neglect

How Your Family May Suffer Severe Financial Loss if You Die or Become Incapacitated without a Comprehensive Estate Plan

by Richard Keyt, Arizona estate planning & wealth preservation lawyer

I am an Arizona estate planning lawyer. I prepare wills and trusts and related documents for my clients. I want to speak candidly about a subject that most people do not want to think about - death.

Most people have not prepared for their incapacity or death. There are three primary reasons for this:

1. Procrastination: This is probably the biggest reason people do not have a will or a trust. Most people think "I'm not going to die for a long time so I'll deal with estate planning later." By procrastinating, we are betting our family's financial and emotional well-being on not becoming incapacitated or dying until we get our ducks in a row years from now. It may work, but if you are wrong, your family will be the victims of your procrastination and suffer the financial and emotional consequences.

2. The Unknown: Estate planning is a complicated area that involves a lot of different issues. When we do not understand something, we have a tendency to reject it. One of my goals is to help people learn about Arizona estate planning, which is why I created the Arizona Estate Planning Library on my website.

3. The Cost: A comprehensive estate plan prepared by an experienced Arizona estate planning attorney is not cheap, but not having an estate plan can be much more costly to your family. For example, consider the cost to your family if any of the following happens to you:

A. You become incompetent and lack the capacity to manage your financial affairs. Without a financial power of attorney, your family may have to get a court order appointing somebody as the conservator of your property with the power to sign documents and act on your behalf. The cost to hire an attorney to obtain the court order could be $2,000+.

B. You are unconscious and lack the capacity to make decisions about your medical care. Without a healthcare power of attorney, your family may have to get a court order appointing somebody as your healthcare agent with the power to make medical decisions for you. The cost to hire an attorney to obtain the court order could be $2,000+.

C. You are in a terminal condition, unconscious and being kept alive by artificial means. Without a living will instructing the doctor to pull the plug, your family may have to get a court order instructing the doctor to pull the plug. The cost to hire an attorney to obtain the court order could be $2,000+ and take several weeks while the doctor and hospital bills continue to sky rocket.

The consequences of scenarios B and C are best illustrated by the sad situation of Terry Schiavo. The story of the legal fight between the comatose Terry's parents on one side and her ex-husband on the other side made national news for months. Terry did not have a healthcare power of attorney that gave somebody the power to make medical decisions for her. Nor did she have a living will that instructed the doctor to pull the plug. Each side spent incredible amounts of money litigating under the bright glare of national publicity, all of which could have been avoided if Terry had adopted these two very important documents while she was able.

D. You Have Minor Children: If you were to die while you have minor children, who will care for your children? If you have a will, you can nominate the person(s) to become the legal guardians of your minor children. Without a will, your family may fight over who should raise the kids and go to court to ask the judge to decide. Do you really want a judge to decide who will raise your children without any input from you? The financial and emotional cost to your family to get the court order could be great.

E. You Die: Without a will or a trust that disposes of your property, the State of Arizona will determine who gets your property rather than you. Too many times people have contacted me with sad stories about their loved ones dying without a will or a trust and the property of the deceased going to the wrong person(s). A common disaster arises when a married person dies with children from a person other than the spouse of the deceased. Arizona law says the community property of the deceased spouse goes 1/2 to the surviving spouse and 1/2 to the children who are not children of the surviving spouse. Ask yourself what surprises about their inheritance or lack thereof will your family experience if you were to die without a will or a trust?

F. You Die and are Married and Have a Taxable Estate and Lack a Trust that Includes Estate Tax Planning Provisions: Federal estate tax law currently provides that if a person has an estate valued more than $1,000,000 and that person dies after 2010, the excess over $1,000,000 is subject to estate taxes at the 55% rate. A married couple with a trust that includes estate tax planning provisions can save their family and loved ones as much as $550,000 in federal estate taxes. Compare the $3,500 cost of my custom drafted estate planning trust and comprehensive estate plan documents to the cost to your family of bearing the burden of paying estate taxes on 55% of the value of your estate between $1 million and $2 million dollars.

The Cost of Fun Stuff vs. The Cost of an Estate Plan

I charge $2,500 for a comprehensive estate plan including a trust and all of the ancillary documents. If a couple has an estate over $1 million, I charge an additional $1,000 for the estate tax savings provisions added to the trust. See the list of what I include in my comprehensive estate plans.

Many people are reluctant to adopt a comprehensive estate plan because of the cost. If the cost is what is preventing you from adopting a comprehensive estate plan to protect your family, ask yourself, "How much money do I spend on things I do not absolutely need?" Here's a list of common expenditures for a few non-necessities:

Fun Stuff	Cost
Big flat screen TV:	$2,000 - $4,000
Cable TV:	$500 - $1,200/ year ($5 - $12,000 10 years)
Golf clubs:	$500- $1,500
Vacation:	$2,000 - $10,000 each vacation
Nice car:	$$$$$
A 2nd nice car:	$$$$$
Country club membership:	$$$$
Clothes:	$$
Jewelry:	$$$
Boat:	$$$$

Don't you think that before you spend a lot of money on non-necessities you should first protect your family with a comprehensive estate plan? I know your family comes first, but don't risk your family's future financial health by purchasing stuff before you spend the money to protect your family from your death or disability. Protect your family now before it's too late.

How to Hire Richard Keyt to Prepare Your Estate Plan

I want to prepare your Arizona estate plan. The process is actually very easy. Here's what you need to do:

Step 1. Complete my online estate planning questionnaire. It gets you thinking about the design of your estate plan and who you want to be your agent for things like medical decisions, financial decisions, guardians of minors, trustees of your trust and the distribution of your assets to your loved ones.

The questionnaire for a married couple is here:

www.keytlaw.com/ep/epqm.pdf

The questionnaire for a single person is here:

www.keytlaw.com/ep/epqs.pdf

Complete as much of the questionnaire as you can, but don't worry if you don't know the answers to all the questions. Mark your questions so we can discuss them at our initial consultation.

Step 2. Call my legal assistant Milena at 602-906-4957, ext. 106 to set a time for a free 1 - 1.5 hour consultation with me to answer your questions, explain wills and trusts and design your estate plan. We will go over your estate planning questionnaire, answer any questions you have and complete the form.

Step 3. At the end of our meeting, I will offer you my standard form estate planning engagement agreement for you to sign. If you decide you don't want to hire me, you have no further obligation. If you hire me, I'll ask you to sign the engagement agreement and pay 1/2 of the total fee at that time.

Step 4. Either the day of our meeting or the next business day, my secretary Milena will contact you to set a date and time in approximately 7 - 14 days to return to my office to meet with me to sign your estate planning documents. The balance of your fee is due on the date of signing.

If you want to make any changes to your estate plan documents, we will make the changes for free within 90 days after the date you sign your documents.

If you have questions about Arizona estate planning, please call me, Richard Keyt, at 602-906-4953, ext. 101.

One final thought, acknowledge to yourself what you know to be true - your family is the most important thing in your life and you would never want them to suffer because of your procrastination or unwillingness to pay the relatively small cost to buy the protection they need and the piece of mind you need.

P.S. Don't forget to subscribe to my free weekly newsletter on Arizona wills, trusts and estate planning.

About Richard Keyt

Richard Keyt prepares wills, living trusts, estate plans and other related estate documents for Arizona residents. Rick, a former partner in one of the largest law firms in Arizona, has practiced law in Arizona since 1980. Rick's email address is rickkeyt@keytlaw.com. His direct phone number is 602-906-4953, ext. 101.

This article was first published on July 30, 2008.

To hire Richard Keyt to assist you in designing your estate plan and to prepare your estate plan documents, complete the appropriate online Estate Planning Questionnaire for a single person or a married couple and mail it to Rick.

This page was last modified on October 10, 2008.

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