Powers of Attorney, Wills and Trusts

A Durable Power of Attorney provides an Agent (commonly referred to as the Attorney-in-fact) with the authority to act in personal business matters for you, the Principal before and/or after you are no longer able to handle your own personal and business affairs, but only as specifically delineated in the Power of Attorney document.

A power of attorney (POA) or letter of attorney is a written authorization to represent or act on another's ​behalf in private affairs, business, or some other legal matter. The person authorizing the other to  act is the principal, grantor, or donor (of the power). The one authorized to act is the agent, attorney, or in some common law jurisdictions, the attorney-in-fact. This document can be limited for a  specific time period.

A Health Care Power of Attorney is a document through which the Principal appoints an Agent to make health care-related decisions for the Principal in the event the Principal should become incapacitated, and is no longer able to communicate his or her desires in that regard.

Upon execution of this document, you, the Principal, are giving another person, your Agent, the authority to make all health care decisions for you, consistent with your wishes, taking into consideration your moral and/or religious beliefs.

If the Agent you appoint is not certain   as to your viewpoint regarding a particular matter, he or she will be obligated to act in your "best interests." "Health care", by definition, includes all procedures, treatments and services to diagnose and treat  physical and/or mental conditions.

Your named Agent typically is given the power to make far-reaching  health care decisions for you. Typically, your named Agent may consent or withdraw consent to any  medical procedure, service or treatment, and may even have to make decisions regarding the withdrawal (or withholding) of life-sustaining treatments.

A Mental Health Power of Attorney allows you to designate a trusted person (your "Agent") to make mental health care decisions on your behalf. When a doctor has determined you no longer have the capacity to make decisions for yourself, this document will go into effect.

A Will is a statement you make that directs the   disposition of your property upon your death. The State of Arizona has statutes, commonly referred to as the “Laws of Intestate Succession” which dictate to whom your assets will go to if you die without a Will. 

A Will provides for the distribution of property which is part of your estate at the time of your death. Certain kinds of property are not property of your estate at the time of your death. Examples of such property would include any property held in a Trust, property held as a Joint Tenancy, or Community Property with Right of Survivorship. A Will can provide for the distribution of tangible personal property, investments, real estate and other assets.

A Last Will and Testament becomes operative upon the   death of the Testator. There are no provisions in Wills for the management of one’s assets during one’s lifetime.

If you have minor children, a Will can provide you with a vehicle by which you may protect them by nominating a Guardian and/or Conservator (the person who would care for the and/or manage their finances) in the event of the death of both parents.

If there have been prior marriages that have produced children, a Will can clarify how an individual’s  property is to be distributed, and help the heirs avoid costly probate-related litigation.

Also, in a Will, you may appoint a Personal Representative (commonly known as the Executor/Executrix)  who will be responsible for distributing your property, paying the debts and taxes your estate may owe,  and carrying out your last wishes concerning your funeral and related arrangements.

All property passing under a Will is included in the estate of the deceased for federal and state estate  tax purposes. The decedent’s property will be subject to probate unless it is worth less than $75,000.00 in personal property and $75,000.00 in real property.

A Living Will is a document containing specific instructions regarding how you are to  be cared for medically should you later become incompetent to make those decisions. It may contain instructions that your Health Care Power of Attorney Agent is obligated to follow should you lack the capacity to make and communicate such decisions for yourself. Your Living Will can define the person(s) who will decide whether you lack this capacity. 

Even if you execute a Living Will, you will still make your own health care decisions long as you are able. You can revoke the authority you have given the Agent in the Health Care Power of Attorney orally, in writing, or by executing a new Health Care Power of Attorney naming someone else. You can revoke a Living Will by destroying it, andinforming the persons to whom you have given copies that  it is no longer in effect.

What will have if you have not executed a Health Care Power of Attorney or Living Will and become incapacitated so that you cannot make or communicate decisions regarding you health care? Someone may need to initiate a guardianship proceeding in the Probate Court on your behalf. This can be costly and protracted.

In the absence of a Health Care Power of Attorney, Arizona law gives certain persons  (spouse, adult child, parents, or siblings) certain kinds of authority to make health care decisions for  you, if necessary, subject to certain limitations. For example, only an appointed guardian can authorize the withholding of artificially administered food or fluids if you are incapacitated with no hope of recovery.

Execution of the aforementioned documents should not be done without careful thought and  communication about your beliefs and preferences regarding medical issues.

A Revocable Living Trust may be used in conjunction with a Will to transfer your property upon your death. A Revocable Living Trust is a legal entity, somewhat analogous to a corporation. A Revocable Living Trust holds title to your property, and continues in existence even after your death, just like a corporation. 

The persons who create the Revocable Living Trust are called the Settlors or Trustors. The persons  who are responsible for managing the assets of the Revocable Living Trust, and for following the directions set forth in the Trust for distributing the Trust property to the beneficiaries, are the Trustees. 

While the Trustors are still living, and competent to manage their own affairs, they can also be the Trustees, as well as the beneficiaries of the Trust. The beneficiaries are the individuals who receive distributions of property from the Trust.  Other designated beneficiaries of the Trust could include  the children of the original Trustors, the Trustor’s relatives, their friends, or charitable institutions.

There are two steps to using a Revocable Living Trust. The first is the creation od a written Declaration of Trust. The second step is funding the Trust:

1. The Declaration of Trust contains all of the provisions for the acquisition and management of Trust property and the handling of Trust debts during the lifetime of Trustors, and instructions   for disposing of Trust property upon the Trustors’ death. The creation of a Revocable Living  Trust usually requires the execution of a Pour-Over Will, which provides for the disposition   of property that was not transferred into the Trust.

2. The Funding of the Trust is the process by which property is transferred into the Trust.  Examples of property that may be transferred into a Trust include the following: real estate,  motor vehicles, certificates of deposit in banks, stock certificates and other investments.   Property owned by the Trustors outside of the Trust at the time of their deaths may be  subject to probate.

If the Trust owns all of the Trustors’ property at the time of their deaths, the Trustors will have no   property left in their name that will need to be probated. Avoiding probate is a major objective in setting up a Revocable Living Trust. Property in the Trust  will not be subjected to the delays and fees associated with probate. The Trustee, in most cases, can begin distributing Trust property as soon as practicable after the last surviving Settlor’s death. There is no  need to pay Personal Representative fees, attorney fees, and other expenses required for   probate litigation.

Additional advantages of choosing a Revocable Living Trust instead of a Will include:

- Avoiding the needs for ancillary probate:  A Settlor who owns property in other states can  transfer the property to a Revocable Living Trust during his or her lifetime. Such transfer   can avoid the necessity and expense of filing ancillary probate proceedings outside of Arizona.

- Maintaining privacy:  Probate is a public proceeding, and the contents of a Will can  become a matter of public record. In contrast, because a Revocable Living Trust avoids  probate, the contents of a Trust are not a matter of public record and can remain private.

- Avoiding Will contests:  Will contests are not unusual. Specific statutory procedures   exist for contesting Wills. A well-drafted and implemented Revocable Living Trust, however, is difficult to invalidate and challenges are rare.

- Protecting the incapacitated Settlor:  If a Settlor becomes mentally or physically  incapacitated and unable to manage his or her own financial affairs. A Revocable   Living Trust can be used to manage the Settlor’s estate and provide for the Settlor’s needs.  A Trust, therefore, can eliminate the need and expense of conservatorship proceedings in Court.

- Protecting property from creditors:  During probate proceedings, creditors have an opportunity   to come forward and file claims against the estate for monies owed. By avoiding probate,   property in a Revocable Living Trust is not directly subject to creditors’ claims. Although Trust assets are still available to creditors, the process for making a claim against such assets is difficult and often discourages creditors.

- Protection from elective rights:   In some states, a surviving spouse can take (or “elect”) a share of the assets of his or her deceased spouse only if the estate is subject to probate. Thus, in some states, property in a Revocable Living Trust can be protected from the surviving spouse’s elective share rights. In states where the surviving spouse has a right to assets even if they are in Trust, this right may be ineffective if the Trust has provided for the reasonable needs of the surviving spouse.

- Permitting observance of the Trustee’s performance:   If the Settlor appoints another person or entity as the Trustee, the Settlor can observe the Trustee’s performance during his or her lifetime. Thus, the Settlor can make any necessary changes or provide knowledgeable advice before he or she passes away.

- Providing for continuity of management: A Settlor, during his lifetime, can select an   established corporate Trustee and provide for continuity of management of Trust property   before and after his or her death. The corporate Trustee can continue to manage the Trust   property throughout the lives of the Trust beneficiaries.

In the case of a married couple, both persons typically serve as the Trustors and Trustees of the Revocable Living Trust, and manage the Trust assets just as they did before they were transferred to the Trust. They can buy, sell, trade, spend, receive income from, invest and pay taxes on Trust assets and earnings in the same way they did before the Trust was created. 

Successor Trustees named in the Trust agreement typically take over the management and disposal of the Trust assets when the Trustors become incapacitated or die. The original Trustors/Trustees generally have the right to revoke any portion, or all of the Trust, at any time during their lifetimes. Thus, the name Revocable Living Trust. 

The terms of a Revocable Living    

Trust can be flexible, and a relative, friend, bank or Trust company can be appointed to manage the Trust’s affairs if the Trustor becomes incapacitated or even after he or she dies. A Trust can provide for the disposition of your property at the time of your death, or several years after your death, to whomever you name, and upon the terms and conditions you set forth in the Trust and related documents.