When death takes a loved one unexpectedly and the deceased has left no will or trust, the family they leave behind may suffer with unanswered inheritance questions. Mourning relatives end up having those questions settled by the courts.
Sometimes these questions are minor, like who will inherit the 1950s baseball card collection, the Hummel figurines and the bank account.
But most often the issues involve the well-being of loved ones. If no guardian has been set up for the children, they could end up in the custody of someone you would not have chosen.
Or a second wife could end up out on the street because her name is not on the deed to their residential property.
"Anybody who has minor children needs a will to specify a guardian," said Matt Dana, of Dana Law Firm, an Arizona Bar Association certified specialist in trust and estate planning. "Anyone who wants to specifically describe who is to inherit their property needs a will."
An individual can use an attorney to draw a will up for a few hundred dollars or buy a kit for around $30. Handwritten or typed wills are also acceptable by the courts.
"But there are so many ways you can stub your toe," Dana said. "If you fit a standard mold -- married, no children from a prior marriage, and you are willing to study and read up a little bit I think those bookstore wills are fine."
Handwritten wills, or "holographic wills," are valid in Arizona provided they are handwritten and signed.
"Holographic wills are valid, but they are usually too simple and they leave out something, or it's open to interpretation and does not cover enough contingencies," Dana said.
For instance, Mike leaves his IBM stock to his second wife, but upon his death the stock is sold. Does she get the proceeds from the sale or is she out of luck?
Typewritten wills must be signed and bear the signature of two witnesses.
Courts previously accepted wills for filing prior to death, but no longer do so.
"The original (will) should be in a safe place -- your safe deposit box or your lawyer's office. A copy should be given to whoever is executor."
If Charlie gives a copy of his will to everyone who is going to inherit, then it is difficult to make changes later.
"I'm not a big fan of giving a copy to everyone who is in the food chain, but I believe the executor should have a copy," Dana said.
Trusts are for people with more complex situations.
"If you are married and your estate is over $2 million, you should absolutely have a trust," he said.
Married with a trust allows two federal exemptions totaling $2 million. Without a trust there is only one exemption equaling $1 million.
"With a will you say, when I die I leave my assets to Johnny," Dana said. "With a trust you say I leave my assets in trust for the benefit of Johnny, and here is how I want (the trust to be administered)."
If Johnny happens to be a special-needs child, it is critical to have a trust that will safeguard his needs.
"Another very common example of when to absolutely have a trust is second marriages, which are getting to be very common," Dana said.
In 1997, over a million children were affected by divorce, according to data gathered by Divorce Magazine. In that same year, at least one of the partners in 43 percent of second marriages had been divorced.
A simple will that leaves all assets to the current spouse can disinherit children of the first marriage.
A trust can be written to give the second wife the trust's income until she dies and the assets pass to the children.
Unlike wills, trusts avoid probate.
"There is a lot of exaggeration of the evils of probate," Dana said.
Arizona follows the Uniform Probate Code, a simplified procedure for selling an estate.
Probate costs between $2,000 and $5,000.
Estates are in probate for six months by law, but an executor of the estate is appointed in a few weeks. Once appointed, the executor can begin paying the bills and distributing the estate.
"In my opinion, I wouldn't be concerned about probate unless my assets were over $500,000," he said.
A married couple can have everything they own -- house, stocks, accounts -- in "right of survivorship," which transfers the assets without going through probate.
"A trust is a better estate plan than a will if one needs to go that far," Dana said.