The best estate plans are created by focusing on people not just property. In its most basic terms, estate planning is how your affairs will be managed in the event you are not around, either because of your death or incapacity. No one wants to think about their mortality but do you honestly want to leave your loved ones to sort out your affairs without your direction? Worse yet, if you do not create your own estate plan the courts will create one for you.
Advance Health Care Directives
Advance health care directives are written instructions that tell others how you want your health care managed when you are not able to do so yourself. Advance health care directives generally include:
Appointment of Health Care Representative. You appoint someone to make health care decisions for you in the event you are unable to do so yourself.
You direct how you want your end of life medical care handled. You give instruction should you decide to donate any organs upon your death.
Power of Attorney
A durable power of attorney allows you to appoint someone to manage your assets if you become incapacitated. The person you appoint can have broad powers to act but should at a minimum have the following powers:
Manage and transfer your assets
Create or amend trusts on your behalf
Pay taxes and deal with the IRS
A last will is a written document that states who you wish to be the guardians for your minor children and how you would like your assets distributed at your death. The last will names an executor to facilitate the management of your will during the probate process.
If you die without a valid will (known as dying intestate) your assets will be divided up according to State statute.
Trusts are a legal construct that allows you to create a separate legal entity to hold your assets. A trustee is named who manages the assets for the benefit of you and your beneficiaries. Revocable living trusts are created and funded during your lifetime and you often name yourself as trustee to maintain control of the assets until your death or incapacity. The type of trust used is dependent on your specific goals and circumstances.
Probate is the public process of filing and validating a will in court. The probate process allows claimants to come forward and ask for payment of debts owed by the estate. The probate court will oversee the distribution of the assets in the estate either according to the terms of a valid will or under Arizona law if there is no will. The probate fees are set by statute at 2.4% of the gross value of your assets.
Some assets avoid probate including:
Life insurance and annuity contracts with a valid beneficiary designation
Valid gifts made prior to death
Assets held in joint tenancy with rights of survivorship
Retirement plans and IRA’s with valid beneficiaries
Assets held in living trusts
Estate Planning Benefits
The many benefits that you will experience with a living trust should not be ignored or put off, they are too valuable to you and to your beneficiaries.
There are many Benefits
More and more individuals are putting their assets into revocable living trusts, which are completely flexible and broadly adaptable arrangements for management, protection and distribution of a family’s assets.
Developing an estate plan is a smart and caring act on your part. Whether you use our service or someone else's you are taking the first step to gaining control of your affairs and your loved ones will be very grateful.
A well thought out estate plan ensures that your plans for your medical care, guardianship for minor children, and management and distribution of your assets will be carried out according to your wishes and not left to the State or others to decide.
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