To-Do and Not To-Do: Lessons from 2016

Written by Bogutz and Gordon

Posted on Jan 31, 2017

Every year, we survey the Bogutz & Gordon staff and compile ten lessons learned from our 2016 experiences (supplemented by the rumor mill) that could help all of us plan a bit better.  In no particular order:

1. Get it done, Part 1. If you don’t have an estate plan, know how your assets will be distributed at your death.  If there are no beneficiary designations or joint ownership, your assets will go according to laws of intestacy.  Many people don’t know that this means a surviving spouse will have to share with children from prior relationships.  Many people also don’t know that half-siblings are considered full siblings, but step-siblings are not.  If your family is blended, you need, at minimum, a Will.
2. Get it done, Part 2. Once you know who your legal heirs are, consider whether you might want to exclude one or more.  If you do, you MUST have an estate plan.  No matter how often you tell one sister how much you despise the other, the “bad sister” won’t be excluded unless you make that clear in a valid document.  Consider also whether your sister’s children also get cut out.  Too mean?  You get to decide.
3. Digital Assets. Arizona’s new Fiduciary Access to Digital Assets Act helps your agent, executor, or trustee to obtain access to your digital assets – if he or she can FIND them.  Consider what someone might need if you can’t communicate or have died.  Usernames?  Yes.  Passwords?  Yes.  Inventory your digital life, and keep it with your documents.
4. Odd Assets. If you acquire or purchase an unusual asset (such as oil, gas, or mineral rights; timeshares; business interests; family vacation properties) – pay attention to how you hold title and how you can transfer your interest at your death.  It’s often easier to determine what you have and how to transfer it at the outset.
5. International Assets. Your U.S. estate plan won’t govern your condo in Mexico or your farm in France. Seek separate legal counsel where the property is located, and note that if you have overseas property, you may need to report it to U.S. authorities.
6. Out-of-State Assets. Out-of-state real property might be subject to state-specific rules or taxes, such as estate, gift or inheritance taxes (which Arizona doesn’t have).  This may require a specific plan.  Be sure you get guidance wherever you own property so you know your obligations – and your options.
7. Check Your Financial Power of Attorney. Once your financial power of attorney has been signed, check to be sure that your financial institutions will recognize it.  Show the document to your bank, broker, financial advisor, etc.  Some institutions have their own forms, some object to a signature that is illegible or too light, or documents that are too old.  Your loved ones don’t want to find that out after it’s too late.
8. Too Safe? If you have a safe deposit box, consider who will be able to get access when you are incapacitated or have died.  If you own the box alone, it will take steps to get into it.  Banks often require that a probate proceeding be initiated – and if your family members have no idea what’s in there – it will be a tough call whether to spend the funds to do so.  And, if the key can’t be found, it’s another couple hundred dollars for the bank to drill it open. Consider alternatives, but if you must have one, keep a current inventory, consider adding a trusted person as an owner, and keep that key where it can be found.
9. Your Stuff. Family members fight over your personal belongings more often than money, so if you want to keep the peace, make a list for your tangible personal property, which Arizona law allows.  Your Will or Trust must make reference to it, and you must follow the terms in the document.  Check to be sure your documents include the option then follow the instructions.  Typically, the list must be in writing and signed, and it’s a good idea to date it.
10. Your Pets. Your animals are considered your tangible personal property, and if you want them cared for, it’s best to set money aside in a trust with specific instructions.  If you simply give someone extra money, they may or may not use it for the purpose you wanted.  We’ve seen it first-hand.  The beneficiary pockets the cash and the beloved cat gets shipped off to the pound.

Bonus:  We’ll say it every year:  Revisit ALL beneficiary designations to ensure they match your wishes.