Newsletter: Summer 2009 Edition

The certification and licensing is through the Arizona Supreme Court administration office of the courts, Certification & Licensing Division.

Legal Document Preparers are professionals, qualified through education, training or work experience, who provide the public with a simple and affordable option in handling their legal affairs. Legal Document Preparers are authorized to prepare legal documents for clients, which helps to avoid the high-cost of legal fees. It is an affordable, efficient, and effective solution for your representation needs. Legal Document Preparers provide better access to the legal system for individuals who cannot afford the high costs of legal fees.

USA Today reported that Americans could save $3.3 billion a year by using Legal Document Preparers instead of lawyers to handle legal matters.

The primary purpose of the certification in Arizona is to protect the public. The certification program ensures the highest ethical standards.

Ten years ago, the American Bar Association found that 38 million Americans are closed out of the legal justice system mostly because of the high legal fees.

According to Stanford Professor, Deborah Rhode, it is estimated that 80% of the legal needs of the poor and 60% of the legal needs of the middle income individual go unmet.

Legal Document Preparers fill these needs. Every American should have access to the legal system, regardless of income.

As a family’s tragedy was propelled onto the national stage, teaching everyone world-wide about the importance of a Living Will. A living Will is one of the most important documents a person can have because it clearly states a patient’s end-of-life wishes.

This simple legal document can eliminate the legal guess work and allow families to focus on the heart and soul of the individual who is terminally ill or incapacitated.

A Living Will explicitly states what kind of medical treatment you would like should you become terminally ill or incapacitated and you are unable to make healthcare decisions for yourself.

Probate

Most people assume their assets will go to their chosen beneficiaries. #1: If you have a WILL you will most certainly go through probate. #2: If you do not have a WILL the state has one for you and you will go through probate.

According to research done by the Estate Research Institute, their study indicates that 10% to 70% of a deceased person’s assets will be siphoned off by probate fees, federal estate taxes, state inheritance taxes, and other cost.

Everyone should know that the process of settling an estate can be incredibly costly, time consuming, and frustrating. I have watched grown men cry over the sheer frustration of probate. I have watched stock values deteriorate while the legal process moved forward with laborious and painful slowness. I have watched valuable businesses, built through years of hard work, falter and die in the probate process. I have watched small estates be almost entirely consumed by legal fees. I have watched savings accounts remain locked in low interest rates when the market rates were higher. I have watched homes given away in distress sales after standing unattended for 2 years.

Upon your death, before title to your assets can pass to your heirs, all claimants to those assets must be eliminated. The process of eliminating all claimants is called probate, a process that can be costly, time consuming, and agonizing.

You may say, “I have no debts.” However, whether an estate has any debts or not, each estate goes through the same probate process to determine whether unknown claims could exist against the estate.

The probate process creates trouble among family members involved in it. The longer the probate continues, the greater is the stress on the survivors. In addition, as probate drags on relentlessly, the greater is the chance of developing sibling rivalry-often resulting in irreparable wounds to the surviving family members.

Most people religiously guard their right to be free from invasion of their privacy-whether it be protection from someone entering their homes uninvited or from someone looking at their financial documents. How much a person earns or the size of a person’s estate is personal information and is considered sacred. However, upon your death and your estate going though probate it will all be made public.

For example, the death in 1952 of Dixie Lee Crosby, Bing Crosby’s first wife, resulted in the public knowing about the estate, the debts, and the cash available. The public also learned that Bing had to sell his interest in the Del Mar race track, as well as his horses, in order to settle the estate and pay all the resultant costs.

However, Mr. Crosby had learned his leson about probate, within a few days of his death, his legal firm in Beverely Hills announced that Bing had a living trust and there would be no further comment, no details of his estate were ever made public. We will never know who received what. That’s just the way Bing wanted it to be, he had learned how to preserve his privacy through a living trust.  

Dwight D. Eisenhower:  $2,905,850.00 estate reduced by $671, 420 a 23% loss.

Nat “ King” Cole:  $1,876,640.00 estate reduced by $1,577,740.00 a 84% loss.

Franklin D. Roosevelt:  $1,940,990 estate reduced by $574,860.00 a 29% loss.

General George S. Patton:  $844,360.00 estate reduced by $266,820.00 a 31% loss.

Invariably, a client will turn to his CPA for confirmation about the advisability of having a living trust.

The CPA may respond saying you do not need a living trust because you do not have a large enough estate. However, the CPA is talking about federal estate taxes, not the probate process.

Estate Planning is not the normal function of a CPA.

If your CPA says you will not have to go through probate or gives you specific probate costs, ask him or her to put that in writing.

The Probate process came to the U.S. from English Law, which is the basis for all constitutional law on this country. Unfortunately, the founding fathers adopted the most complex of the English probate systems. In Medieval England, estates went through a 3 court system: Common Law Court, Ecclesiastical, and Equity Courts

The proceedings were time consuming, complex, and costly. England eventually modernized its entire probate system.

Instead of adopting England’s 3 court system, American founding fathers heaped the entire process together into more complex, time consuming, and costly common law system and called it the “Probate Court.” Unfortunately, the passage of time has complicated, rather than simplified, the probate process.

As one legal scholar expressed it so well, “the cost of probate expands to consume the money available.”

A retired FBI officer told me that he spent 2 years as a federal referee, investigating estates that were being exhausted of their assets by attorneys. By the time the investigations were completed, the estates were stripped bare – with practically nothing left for their heirs. The FBI agent saw the Living Trust as the legal means to prevent estates from being drained.

Once the probate process has started it cannot be stopped under any circumstances.

Probate is a system that is suppose to ensure that a dead person’s debts and taxes are paid, that his or her will is valid, and that his or her estate will go to the people named in his or her will.

Everything stands still-nothing can be sold-as the probate process drones slowly on towards establishing clear title. All of the mental trauma associated with probate happens during the worst period in a person’s life, the loss of a beloved companion or parent.

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