Avoiding Probate

Probate.  Just mention the word, and chills run up the spine. Some businesses are even targeting seniors to scare them into purchasing expensive estate plans to avoid probate. They hold luncheon seminars telling seniors that a Will won’t avoid probate, and then try to sell the senior a Trust for thousands of dollars. Just because a person has a Will does not mean that probate will be required.  In many cases, there are other, less expensive options that would also avoid probate.

What is probate?

First, let’s define probate. Probate is a court proceeding to transfer assets and settle the debts of a deceased person.  At a minimum, a simple probate in Arizona takes at least 4 months to complete and can cost $1600 or more. A probate proceeding may also be opened if the Trustee of the deceased person’s Trust is not performing his or her duties, or if someone disagrees with part of the Trust.  

What is the best way to avoid probate?  

Stay alive.  Seriously, it depends.  Most Arizona real estate can be transferred with a Beneficiary Deed for less than $200.  That is substantially less than the cost of a simple probate.  If a person owns real estate in multiple states, it may be better to use a Trust to manage the transfer of property.  Depending on your unique situation, a Trust may be the best solution, or there may be other less expensive ways to transfer your assets upon death without a probate.

What type of assets require a probate to transfer?

In general, if property requires the signature of the owner to transfer title or access it, then it may require probate for transfer after death, unless a non-probate transfer device has been put in place before death.

What are some simple ways to transfer property without probate and without a Trust?

This table shows typical assets and ways to transfer without a probate. Some actions must be taken before death.

Property	Signature Required	Non-probate transfer options (MUST be done before death)	Small estate transfer options (After death)
Financial Account	Yes	Name a POD or TOD beneficiary	Affidavit of Collection if less than $50,000
Real Estate	Yes	Beneficiary Deed	Affidavit of Transfer of Real Property if less than $100,000
Motor Vehicle	Yes	Beneficiary Designation Form	Affidavit of collection if less than $50,000
Grandma’s Dishes	No	Give them to the person listed in the Will

How can I decide the best solution for my situation?

You can ask an attorney to decide for you, or you can get information from an estate planning professional like Prescott Tax & Paralegal and make your own decision about what is best for you.

Will having aTrust avoid probate?

Usually. However, if there is a disagreement over distribution, the Trustee acts improperly, or assets were not placed into Trust ownership, a probate may be opened. In a recent case, a probate was opened because the bank incorrectly titled the money market account as The Smith Trust instead of the The Smith Family Trust. When the original trustee died, the bank refused to release funds to the successor trustee because the name on the account did not match the name on the Trust document. The bank refused to pay for the proceeding, and refused to admit their error in incorrectly titling the account. Ultimately, we were able to obtain a court order forcing the bank to release the funds, but not without cost to the heirs was in time and money.

If you have questions about avoiding probate, estate planning, or how to transfer assets of a deceased loved one, call Prescott Tax & Paralegal at (928) 778-3113.

Prescott Tax and Paralegal, your tax resolution specialist in Prescott, explains your options when you are in tax trouble

A letter from the IRS is rarely a good thing. One of the most dreaded letters to get from the IRS is the CP90 – Final Notice Before Levy. It is a final warning shot to scare you into paying and should not be ignored. If you find yourself on the receiving end of an IRS letter, Prescott Tax and Paralegal, your tax resolution expert in Prescott, wants you to be aware of your options.

After an IRS final notice, you could:

• Pay in full – most people would have already done that if they could have afforded it
• Sign on for an installment agreement on your own - with penalties and interest so excessive it feels like it will continue until you die.
• Ignore them - and wait for terrible consequences like garnished wages and tax liens. Don’t do this, ever.
• Contact your tax resolution professional to see what your resolution options are.

The CP90 intends to intimidate you into calling the IRS so the tax man can take as much as possible from you even if it leaves you in dire financial straits, unable to pay your bills or support your family.

A better option is to work with a certified tax resolution expert that can negotiate on your behalf for better results. A tax expert can pursue resolutions that would be difficult - if not impossible - to negotiate on your own. Here are four options to deal with tax debt.

Offer in Compromise (OIC): An offer in compromise (OIC) is an agreement between a taxpayer and the Internal Revenue Service that settles a taxpayer's tax liabilities for less than the full amount owed. It can be far more reasonable than an IRS installment agreement, but you have to see if you qualify based on your unique financial situation and specific case.

Installment Agreement (IA) or Partial Payment Installment Agreement (PPIA): These are well-structured installment agreements that can slash penalties by 50%. The IA is an agreement to make monthly payments on what’s owed in full while a PPIA lets you make a monthly payment that does not pay the total owed. You must qualify for a PPIA based upon your financial circumstances. These agreements generally run 6 to 72 months.

Penalty Abatement (PA): This agreement strips away penalties tacked onto your tax balance. Penalties include failure-to-file, failure-to-pay, and failure-to-deposit (for business owners). If you’ve never had a penalty before, a first-time abatement (FTA) penalty waiver may apply. Otherwise, your tax relief consultant can fight for a reasonable cause abatement if any of the following apply:

• Illness, death, or incapacitation of the taxpayer or their immediate family
• Fire, casualty, natural disaster, etc. affecting the taxpayer
• Inability to obtain records and documents
• Currently Not Collectible (CNC)

In cases of extreme financial hardship, your tax rep can argue that you can’t afford to pay anything. With this option, your tax debt goes on the back burner, and you make no monthly payments although penalty and interest keep accruing. The big advantage of CNC is that the 10-year statute of limitations on collection keeps ticking so you might be able to ride it out and pay nothing on the tax debt.

If you’ve received an IRS final notice or threatening letter, don’t ignore it. Instead, contact Prescott Tax and Paralegal to speak with a tax resolution specialist in Prescott to get the IRS off your back for good. To schedule an appointment, call us at 928-778-3113. Learn more about the services we offer at http://www.PrescottTax.com.

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Prescott Tax and Paralegal, your estate planning experts in Prescott, answers the question: What property may need probate?

Thinking about your estate plan or lack thereof? There are ways to transfer property upon death that do not require probate. Prescott Tax and Paralegal shares with our Prescott clients what assets may need to go through probate.

A colleague asked if I would briefly discuss what assets require probate to transfer title. Briefly? I’ll try. In general, if property requires the signature of the owner to transfer title or access it, then it may require probate for transfer after death, unless a non-probate transfer device has been put in place before death.

The following table shows some typical assets, and one possible non-probate transfer option.  (I’m trying to be brief.)

Property	Signature Required	Non-probate transfer options	Small estate transfer options
Financial Account	Yes	Name a POD or TOD beneficiary	Affidavit of Collection if less than $50,000
Real Estate	Yes	Beneficiary Deed	Affidavit of Transfer of Real Property if less than $100,000
Motor Vehicle	Yes	Beneficiary Designation Form	Affidavit of collection if less than $50,000
Grandma’s Dishes	No	Give them to the person listed in the Will

Just because a person has a Last Will and Testament does not mean probate is required. If the only property is Grandma’s dishes, a probate court proceeding is generally not required.

Even when there is no Will, a probate proceeding may need to be opened if there is real estate which needs to be transferred. For those who think, “Ha, I’ve got a Trust!” Even a Trust may end up in probate court if there is a disagreement over distribution, if the Trustee acts improperly, or if assets were not placed into Trust ownership.

In a perfect world, no one would end up in probate court. Until then, probate provides the way to transfer property that requires a signature, when the owner dies before choosing a non-probate transfer.

If you are looking for help protecting your assets, choose the professionals at Prescott Tax and Paralegal. To obtain legal advice on the best solution for your situation, you should contact an attorney. To schedule a consultation, or if you are in need of an estate or trust plan in Prescott, contact the experts at Prescott Tax and Paralegal at 928-778-3113. For more information on services we offer, please visit http://www.PrescottTax.com.

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Prescott Tax and Paralegal, your estate planning experts in Prescott, discusses avoiding probate

Probate. Just mention the word, and chills run up the spine. Some businesses even target seniors to scare them into purchasing expensive estate plans to avoid probate. They hold luncheon seminars telling seniors that a Will won’t avoid probate, and then try to sell the senior a Trust for several thousands of dollars. In many cases, there are other, less expensive options that would also avoid probate. Prescott Tax and Paralegal wants our Prescott clients to be aware of what probate is and what you can do to protect the assets you’d like to leave to your heirs.

First, let’s define probate. Probate is a court proceeding to transfer assets and settle the debts of a deceased person. At a minimum, a simple probate in Arizona takes at least 4 months to complete and can cost $1000 or more. A probate proceeding may also be opened if the Trustee of the deceased person’s Trust is not performing his or her duties, or if someone disagrees with part of the Trust.

What is the best way to avoid probate? Stay alive. Seriously, it depends. Most Arizona real estate can be transferred with a Beneficiary Deed for less than $150. That is 1/10 the cost of a simple probate. If a person owns real estate in multiple states, it may be better to use a Trust to manage the transfer of property. Depending on your unique situation, a Trust may be the best solution, or there may be other less expensive ways to transfer your assets upon death.

The professionals at Prescott Tax and Paralegal are experienced in estate planning in Prescott and can help you protect your assets. To obtain legal advice on the best solution for your situation, you should contact an attorney. For a consultation or if you are in need of an estate plan, contact the experts at Prescott Tax and Paralegal at 928-778-3113. For more information on services we offer, please visit http://www.PrescottTax.com.

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Prescott Tax and Paralegal, your estate planning experts in Prescott, discusses when the State can get your stuff

You may have heard the myth that the State will get your stuff if you don’t have a Will.
In reality, whether or not you have a Will has little to do with when the State obtains property. Prescott Tax and Paralegal wants our Prescott clients to know what to do to protect your assets.

You may be surprised to know that you can be very much alive and the State can get your property. Arizona adopted the Unclaimed Property Act, found in A.R.S. § 44-301 through 339. The Act specifies time limits for determining when property has been “abandoned” by the owner. These time limits vary from one year to 15 years.  Three years is the most common.

For example, a money order which is not cashed within three years is presumed abandoned. The issuer of the money order then files a report with the State claiming that the property is abandoned. The abandoned property is turned over to the State.  The State must publish a list of abandoned property, and give the rightful owner roughly three years to claim the property. After three years, the State may sell the property and the prior owner can no longer redeem it.

Are you curious if you have abandoned property?  There are two good online sources where you can check:

• www.missingmoney.com (the official search site) and
• www.azunclaimed.gov (a resource for questions). When doing a search, start with your last name and your state. You can then refine that search by using your last name and first initial, and finally your last name and complete first name. If you locate property belonging to you, you can click a link to obtain the form to claim your property.

To avoid the possibility of the State becoming the owner of your property, consult with an estate planning professional to make sure your assets are protected. Prescott Tax and Paralegal has years of experience preparing estate plans in Prescott, and can help prepare the proper documentation for you and your family. To schedule a consultation, call 928-778-3113. For more information on services we offer, please visit http://www.PrescottTax.com.

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Prescott Tax and Paralegal, your estate planning experts in Prescott, dispels the myth that the State will get your stuff

Do you have a will? If not, you may be worried about what will happen to your property when you die. Because there is so much misinformation surrounding estates, Prescott Tax and Paralegal wants our Prescott clients to know the facts about probate.

When folks come to see us for a consult, they often say something like, “I better do a Will or the State will get my stuff when I die, right?”

Myth: The State will get your stuff if you don’t have a Will.
Truth: It is unusual for the State to become the beneficiary of your property when you die.

Arizona laws specifically address who will get your property if you do not have a Will. Laws covering probate are found in A.R.S. § 14-2101 to 2114.

Here’s the brief version (which does not include all the complexities):

• If you are married, your spouse and your children from a prior relationship inherit.
• If you are single, but have children, your children inherit. If a child died first, then that child’s children (your grandchildren) inherit in place of the deceased child.
• If you are single, without children or grandchildren, then your parents inherit.
• If you are single, without children, and your parents are deceased, then your siblings inherit; if they are deceased, your nieces and nephews inherit.
• If you are a single, orphaned, only child, then your living grandparents inherit.
• If you are a single, orphaned, only child, with no living grandparents, your aunts and uncles inherit; if they are dead, then their living descendants inherit.

Are there are times when the State will get someone’s property? The answer is yes, but it is unusual. Prescott Tax and Paralegal is your local Prescott resource for estate planning and we can help you prepare the right documentation to protect your assets. For legal advice, we can refer you to an attorney. For legal documentation preparation, or to schedule a consultation, call 928-778-3113. For more information on services we offer, please visit http://www.PrescottTax.com.

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Prescott family law experts, Prescott Tax and Paralegal, discusses factors that affect parental rights

Prescott Tax and Paralegal, your family law experts in Prescott, understands that it is important to know what kinds of things can affect your parental rights. Legal decision-making and parent time are two of the most important subjects related to parental rights.

Legal decision-making

When parents separate or divorce, the term legal decision-making refers to the person or persons with the legal right to make all non-emergency legal decisions for a child, such as those relating to education, healthcare and religious training.

• Where there is joint legal decision-making, both parents share the decision-making and neither parent’s rights are considered as being superior.

• Sole legal decision-making means that one parent has the legal right to make major decisions for the child; the other parent is entitled to reasonable parenting time unless the court finds that it would seriously endanger the child’s physical, mental, moral or emotional health.

Parenting time

Parenting time means the schedule of time during which a parent has access to a child.

The court’s determination of legal decision-making and parenting time

When parenting time is disputed, the court first sends the parents to mediation to determine a parenting plan. If the parents are unable to agree on any part of the parenting plan, the court decides that aspect. When determining legal decision-making and parenting time, the court is required to consider what is in the child’s best interest. This involves factors related to the child’s physical and emotional well-being.

Prescott Tax and Paralegal recognizes that it is important to understand parental rights and family law in Prescott. A divorce, legal decision-making, or a parenting time issue can leave you feeling overwhelmed while sorting things out legally. We strive to offer the legal document assistance you are looking for while making these important decisions. We can prepare documents statewide. To schedule a consultation, call us at 928-778-3113. Learn more about us at http://www.PrescottTax.com.

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Prescott Tax and Paralegal explains why outsourcing your bookkeeping will help prepare your Prescott business for tax season

As business owners, we tend to think we can do it all ourselves. Bookkeeping is one of those tasks that oftentimes gets dumped on the business owner and unfortunately, may be done wrong. Saving money is the goal, but if the bookkeeping is done incorrectly - or not done at all - it can cost your company a lot more money than it saves. Prescott Tax and Paralegal explains how outsourcing bookkeeping services for your Prescott business can prevent costly errors when tax season arrives.

Are you really utilizing your time and resources wisely?
You are an expert in your business. Taking precious time and resources away from operating and maximizing your business to do bookkeeping can spread you too thin and have a negative impact on your bottom line.

Taxes
Many small businesses get into tax trouble because owners are too busy running their business to do the bookkeeping required for accurate tax preparation. Outsourcing will not only save you unneeded stress, but it also ensures an accurate tax return - often resulting in paying less in income taxes. And no one wants to end up paying penalties and interest to taxing authorities.

Budgeting
A professional bookkeeping firm like Prescott Tax and Paralegal will be able to help you budget properly and find areas where perhaps you are spending too much money.

Experience & Expertise
One of the main benefits to outsourcing your bookkeeping to us is the benefit of many years of expertise and knowledge. Improving financial performance is and should be a goal to all businesses, and outsourcing gives you an edge to help you reach that goal.

Contact Us
Compliance with tax laws is a must, and outsourcing to a professional bookkeeping service is in your best interest. The experts at Prescott Tax and Paralegal can help by handling your bookkeeping needs, preparing tax returns and financial reports for your Prescott small business. To set up an appointment, give us a call at 928-778-3113. Learn more about all the services we offer at http://www.PrescottTax.com.

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Prescott Tax and Paralegal, your bookkeeping experts in Prescott, share why small businesses are likely to attract audits

Those dreaded audits! Why do small businesses seem to attract audits by the IRS? Prescott’s accounting experts at Prescott Tax and Paralegal, understand why small businesses are likely to attract audits and what you can do to help prevent them.

Fear not
There should be no unreasonable fear. In reality, an audit is simply a “second look” by the IRS on a business’ tax return. In an audit, the auditor compares the return to the business’ books, ensuring there are no errors or discrepancies. Many audits are completely random. As a compliance check, the IRS selects a certain number of returns every year.

Missteps to avoid
While most audits are completely random, there are some things you can do that increase the chances the IRS will pull your return aside for a closer look. Here are some missteps you can readily avoid:

• High meals and entertainment expenses. Here is where it can get kind of tricky. Meal expenses are legitimate business deductions, but you need to be able to prove that the expenses are ordinary and necessary. Don’t let fear of an audit stop you from deducting these expenses, but make sure you keep good records. detailing every expense: include the names of the people or group in attendance and the business relevance of the meal, or travel expense. Entertainment expenses are no longer deductible.
• Home office deductions. Home office deductions are legitimate tax deductions, but your home office must be used “exclusively and regularly” for business. Your home office needs to be a designated area in your home for your work, not just a kitchen counter or table in the bedroom. Also, be honest about the square footage when you do your calculations for your tax return.
• Vehicle expenses. Unless your vehicle is owned by your business, don’t claim that 100% of your automobile expenses are for business use. In most cases, you are better off recording and claiming your mileage at the standard mileage rate the IRS publishes each year instead of claiming your actual automobile expenses. It is important to keep detailed mileage records as required by the IRS.
• Not keeping receipts. If you do not have the receipt to prove the expense, the expense will be disallowed by the IRS.

Your accounting experts at Prescott Tax and Paralegal understand why small businesses are likely to attract audits and what you can do to help prevent them. Prescott Tax & Paralegal is here to help. To set up an appointment, give us a call at 928-778-3113. Learn more about all the services we offer at http://www.PrescottTax.com.

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Your local Prescott paralegal experts, Prescott Tax and Paralegal, explain the importance of powers of attorney, including mental health powers of attorney

Often as parents age, children become concerned because the parent may become forgetful, or worse, be diagnosed with dementia or Alzheimer's. Both dementia and Alzheimer's fall under the umbrella of ailments that may require a Mental Health Care Power of Attorney. Being prepared to help loved ones who are suffering from dementia is often easier when they have properly prepared their Estate Planning Documents prior to being diagnosed.

A Durable Mental Health Care Power of Attorney is a legal document that names someone as the “agent” to take care of these matters. Having this power of attorney in place will save your loved ones money and difficulty down the road.

The first step is choosing an “agent” to care for you if you can no longer make decisions for yourself. You need to make sure whoever you choose to act on your behalf has your best interest at heart. This person(s) has the authority to decide if you need to be in a facility or if you can live outside of care, so it is very important.

There are two different POAs in the state of Arizona. One deals with mental health issues and the other deals with health care. Just having a Health Care Power of Attorney will not be enough if the person needs to make mental health treatment decisions. In that case, they will also need a Durable Mental Health Care Power of Attorney. In the Durable Mental Health Care Power of Attorney, you can authorize your trusted agent to give you treatment that you say you don't want, and to place you in a level 1 facility which is a locked facility. 

Those two choices frighten many people. However, the reality is that when a loved one is diagnosed with dementia at some point it may become necessary to place that person in a locked facility to keep your loved from wandering and dying from exposure. As the condition of a person with dementia worsens, so does troubling behavior such as agitation and paranoia. Patients are often prescribed anti-anxiety medication to relieve the symptoms, however because of the paranoia, they believe that someone is trying to poison them and state that they don't want the necessary medication.

The implications of not preparing with a Durable Mental Health Care Power of Attorney would be putting your family in a position to secure treatment through an emergency guardianship which can be very expensive and a hassle, at the least.

Rememberyou must create the Durable Mental Health Care Power of Attorney while you are still able to make decisions. A big mistake people make is trying to do it after a diagnosis of dementia, which is generally too late. The best thing to do is to have one, and hope it is never needed.

If you believe it wise to look at your estate planning and make sure that a Durable Mental Health Care Power of Attorney is included, Prescott Tax & Paralegal is here to help. We are your local paralegal experts in Prescott, we prepare legal documents for any legal matter, and offer assistance in filing documents with the appropriate agency. We also provide procedural information for our clients, and can refer you to an attorney when needed. To set up an appointment, give us a call at 928-778-3113. Learn more about all the services we offer at http://www.PrescottTax.com.

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Prescott Tax & Paralegal, your paralegal experts in Prescott, reviews Arizona divorce proceedings

Everyone plans on living happily ever after on their wedding day. Unfortunately, sometimes things don’t work out the way we plan and the discussion turns to divorce. Because the legal procedure for divorce varies from state to state, Prescott Tax & Paralegal, your paralegal experts in Prescott, would like to share some information about divorce in Arizona.

• In Arizona, the legal name for a divorce is Dissolution of Marriage. The time that it takes to get a dissolution or divorce varies from case to case. State laws require that you wait 60 days from the date of service before a final decree can be entered. . After the 60 days from the date of service passes, the steps necessary to obtain a divorce will greatly depend on your situation.
• The person filing for the divorce is called the Petitioner. The person responding to the divorce is called the Respondent. If both parties agree to all issues within the case, the case may proceed by the parties filing a consent decree.
• The divorce may be less complicated if the parties have been married for a relatively short period of time, have no children, and have little property or debt. In a case where the parties have been married for a lengthy period of time, have minor children, or where there is a significant amount of property or debt to be divided - and the parties are in disagreement - the process may take much longer.

If the Petition for Dissolution has been filed and served on the other party and a response has not been filed within the allotted time period, the filing party may apply for a default.

Making sure the necessary paperwork is filed in a complete and timely manner, and in the proper order is important. If you find yourself in this situation and need help filling out forms or understanding the divorce process, Prescott Tax & Paralegal, your paralegal specialists in Prescott, are here to help. We prepare legal documents for any legal matter, and offer assistance in filing documents with the appropriate agency. We also provide procedural information for our clients, and can refer to an attorney when needed. To set up an appointment, give us a call at 928-778-3113. Learn more about all the services we offer at http://www.PrescottTax.com.

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