Getting started on your first estate plan can seem like a daunting task, due in large part to the fact that the average person is not familiar with most of the documents used in an estate plan. To make the process less intimidating, the Phoenix estate planning attorneys at Morris Hall PLLC explain some of the most used estate planning documents.
Last Will and Testament
Typically, a Last Will and Testament serves as the foundation of a basic estate plan. Executing a Will ensures that you will not leave behind an intestate estate. Dying intestate means the state decides what happens to your estate assets using the state intestate succession laws. Instead, your Will allows you to make specific and/or general gifts to loved ones. In addition, your Will lets you appoint someone as the Executor of your estate. The Executor is responsible for overseeing the administration of your estate. Finally, your Will offers you the only opportunity you have to officially nominate a Guardian for your minor child should one ever be needed.
Trust Agreement
Although they were traditionally used only by the wealthy to protect and guard the family fortune, trusts are now commonly found in the estate plan of the average person. A trust is a relationship where property is held by one party for the benefit of another party. A trust is created by the owner, also called a “Settlor”, “Trustor” or “Grantor” who transfers property to a Trustee. The Trustee holds that property for the trust’s beneficiaries. Trusts are broadly divided into two categories, testamentary and living trusts. A testamentary trust does not activate until after the death of the Settlor whereas a living trust takes effect as soon as all the trust agreement is in place and the trust is funded. A living trust can be further divided into revocable and irrevocable living trusts. A trust can help achieve a wide variety of estate planning goals and can even serve as the foundation of you estate plan if probate avoidance is desirable.
Advance Directive
Although the primary focus of your estate plan will undoubtedly be to ensure that your assets are distributed according to your wishes after you are gone; you should also ensure that your wishes are honored while you are still here during a period of incapacity. An advance directive helps you plan for that possibility. The State of Arizona recognizes two primary types of advance directives, including:
- Arizona Health Care Power of Attorney– permits the appointment of an adult as Agent. This section lets you name an adult agent to make decisions about your medical care, including decisions about life-sustaining treatment, if you can no longer speak for yourself.
- Arizona Living Will – the advance directive lets you discuss your wishes about medical care in the event that you develop a terminal condition or are permanently unconscious and can no longer make your own medical decisions. Your Living Will may control or guide your Agent’s decisions regarding your health care treatment.
Power of Attorney
A power of attorney allows you to appoint someone as your Agent to act on your behalf in legal transactions. There are two types of power of attorney, general and limited. A general power of attorney (POA) gives your Agent almost unfettered authority to act on your behalf, meaning your Agent can engage in financial transactions on your behalf, enter into contracts in your name, and sell your assets. A limited POA, on the other hand, only gives your Agent the specific authority indicated in the POA agreement. If you make any POA durable it means that your Agent’s authority will survive your incapacity. If you make any POA durable it means that the authority granted to your Agent will survive your incapacity.
Contact Our Phoenix Estate Planning Attorneys
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about documents commonly used in an estate plan, or you are ready to get started on your estate plan, contact the experienced Phoenix estate planning attorneys at Morris Hall PLLC by calling 888-222-1328 to schedule your free consultation today.
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.
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