When most people set out to create an estate plan, the first document they execute is a Last Will and Testament. A Will may act as the foundation of your estate plan in the beginning; however, at some point you may need more than just a Will. How do you know that your Will is no longer sufficient to handle your growing estate planning needs and goals? The Phoenix estate planning attorneys at Morris Hall PLLC offer some guidelines to help you decide if it is time to add to your plan.
Last Will and Testament
A Will is a legal document that allows the Testator (the creator of the Will) to make specific and/or general distributions of estate assets to beneficiaries at the time of the Testator’s death. A well drafted Will can distribute the Testator’s entire estate, ensuring that the Testator does not leave anything behind. A well drafted will is critical because when a decedent dies without a will (referred to as “intestate”), the Arizona intestate succession laws dictate what happens to the decedent’s estate – something you undoubtedly want to avoid. A Will also allows the Testator to name someone to be the Executor of the estate. The Executor is the individual responsible for overseeing the administration of the estate following the death of the Testator. Finally, a Will is the only opportunity to officially nominate a Guardian for your minor children, should a Guardian ever be needed.
These basic estate planning objectives are typically sufficient to meet the needs of someone early in life. However, as your estate and family grow, you will likely outgrow this basic estate plan.
When Your Will Is No Longer Enough
As a general rule, your estate assets increase in value and become more complex as you move through the various stages of life. In addition, if you choose to marry and/or become a parent, you will have additional people you will want to protect and provide for within your estate plan. Consequently, you will likely need to incorporate additional strategies and tools into your plan. The only way to know with certainty that you have outgrown your Will is to consult with your estate planning attorney. If you think that you have outgrown your Will, please consider the following common indicators that a simple Will is no longer enough:
- Your assets have increased significantly in value. When your assets increase, the need to protect those assets from creditors, divorce, or an economic downturn increases as well. It may be time to include asset protection strategies in your plan.
- You marry and/or become a parent. Marriage and parenthood mean you now have additional beneficiaries and additional estate planning concerns. For example, because your minor children cannot inherit directly from your estate, you will need to set up a trust to protect your child’s inheritance.
- You need to plan for the possibility of your own incapacity. Once you have a family, you need to ensure they are provided for if you cannot provide for them. The terms of a Will only apply upon your death. To protect yourself and your family from the possibility of incapacity, you may want to add a revocable living trust to your estate plan.
- You want to plan for the high cost of long-term care. Unless you can afford to cover LTC expenses out of pocket, you will need to include Medicaid planning tools and strategies in your estate plan well ahead of time to ensure that you qualify for Medicaid down the road.
- Your estate’s value now potentially subjects it to gift and estate taxes. By planning ahead you can shelter a considerable amount of your wealth from taxation – something a simple Will cannot do.
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about adding to your current estate plan, contact the experienced estate planning attorneys at Morris Hall PLLC by calling 888-222-1328 to schedule your appointment today.