Simply put, estate planning is the process of arranging the distribution of your assets after your death. Estate planning can be complicated, so if you’re new to it, it’s best to start with the basics.
First - It's never too early to start. Don’t think that because you’re young, or not wealthy, that you don’t need an estate plan. Estate plans vary in complexity and purpose, and can be created for very modest estates as well as large estates. Anyone with any kind of property needs some form of estate plan.
Second - Understand what comprises a basic estate plan. An estate plan can include several components, here are just a few:
- A will – a document that directs how to dispose of your property after you die. A will must go through the probate process before assets are distributed.
- A revocable living trust - A trust is a fiduciary arrangement that allows a third party, or trustee, to hold assets on behalf of a beneficiary or beneficiaries. During a trustor’s (the creator of the trust) lifetime, he or she is usually the trustee as well. A trust need not go through the probate process and allows greater flexibility in tax planning and distribution.
- A power of attorney – a document that gives authority to a person you name to manage your financial affairs in the event you become incapacitated or are otherwise unable to act on your own behalf.
- A living will – a form that directs doctors on the kind of life-sustaining medical treatment you want, or don't want, if you are terminally ill or in a persistent vegetative state.
- A healthcare power of attorney – a form that gives authority to a person you name to make medical decisions on your behalf if you become incapacitated.
Third - Take inventory of all your assets. Assets include your retirement accounts, real estate, business interests, investments, and valuable items – such as jewelry, heirlooms, collectibles, etc. Your assets may also include things you may not think of on a daily basis, including patents or copyrights, airline or hotel miles, credits on credit or bank accounts, or credits on internet sites, such Amazon or Pay Pal.
Fourth - Decide how you would like your assets to be distributed. If you don’t decide, then the courts and the laws of the state will dictate distribution.
It's important to have a basic estate plan in place regardless of your net worth. If you would like to know what estate plan works best for you, contact the attorneys at Morris Hall for a free consultation.
Contributed by MH Phoenix Estate Planning Attorney Darren Richardson.
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We live in a litigious society, where over 1 million lawsuits are filed every year in America alone. Financial predators are looking for ways to take funds from others and often use litigation as their means to do so. At Morris Hall we provide your assets and your loved ones with important protections that can prevent financial predators from taking advantage of you. We do this through proper and current estate planning techniques. With an MH living trust, we can also protect your property, assets and loved ones from probate, estate taxes, gift taxes, creditors, Medicaid spend-down, conservatorship or guardianship proceedings, ex-spouses and more. A living trust also keeps your asset and beneficiary information private and secure to avoid giving financial predators information to use against you and your family. Without a living trust, this information will be made public. For those living in Arizona, we serve the areas of Phoenix, Mesa, Gilbert, Fountain Hills, Scottsdale, Cave Creek, Prescott, Flagstaff, Sedona, Tucson, Sonoita, Arrowhead, Avondale, Goodyear and Tempe. In New Mexico we serve the areas of Albuquerque, Santa Fe, Las Cruces, Rio Rancho, White Rock, Alamogordo, Truth or Consequences and more. Contact us today at 888.222.1328 to schedule an appointment with an attorney in your area!
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.