Posts Tagged ‘Northwestern Mutual Life’

Elder Law Q&A

SEPTEMBER 4, 1995 VOLUME 3, NUMBER 10

Question: How do Arizona laws differ from other states with regard to durable powers of attorney, health care powers, living wills and trusts?

Answer: In most respects, Arizona law is comparable to other states. A will or trust written in Arizona will usually be valid in every other state, as well. A will or trust valid in the state in which it was executed will be honored in Arizona.

The most important technical requirement for wills is that they be witnessed by two persons. Those witnesses must actually see the testator sign, or at least be present when he or she confirms the signature. That technical requirement is inherited from English law predating colonization of America, and so the requirements are very similar in most states.

One area of concern: Arizona recognizes “holographic” wills and some other states do not. A holographic will is one substantially in the handwriting of the testator and signed by him or her, but without the usual witnesses. Even though another state may not recognize holographic wills, a valid Arizona holographic will might be admissible in that other state.

Durable powers of attorney (and health care powers) are a more diverse issue. Every state now has some version of the Uniform Durable Power of Attorney Act, but specific requirements vary. Arizona, for example, has recently adopted a requirement that such powers be witnessed andnotarized; most other states do not require the extra step. Consequently, an out-of-state power of attorney is likely to be insufficient under Arizona’s new law.

Health care powers of attorney are specifically recognized in most, but not all, states. Specific requirements vary from state to state, as do questions about the duration of the powers, when they become effective and how they may be revoked. Anyone with an out-of-state health care power of attorney should be encouraged to execute an Arizona-specific version.

Send your legal questions to us for future discussion in Elder Law Issues.

Divorce Changes Beneficiary Status

Previous Elder Law Issues have discussed the various changes made to laws governing wills and inheritances by the Arizona legislature last year. Now securities, insurance and banking industry representatives are beginning to take note of some of the more subtle changes.

One example: effective January 1, 1995, any life insurance beneficiary designation naming a spouse or some relatives of a spouse will be revoked by divorce. This makes good sense in an orderly world, but most people refuse to live according to anyone else’s sense of order.

A recent letter to all Arizona agents for Northwestern Mutual Life points out the pitfalls inherent in this legislative change. According to Northwestern’s analysis, failure to make the necessary changes after divorce might even result in gift tax consequences or income taxation of proceeds (which are ordinarily exempt from income taxation). The moral: review all the effects of divorce while the legal issues are still fresh.

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