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Estate Planning Basics: What You Need to Know

Posted by Zach Dana on March 31, 2016

estate planning

estate planning

What You Need to Know About Estate Planning in Arizona

You may think that estate planning means creating a last will and testament so that your possessions are distributed according to your wishes after you die. And while a will is definitely a very important part of an estate plan, it is not the only one you should be thinking about. There are many helpful estate planning tools that can ensure that all of your wishes can be carried out after you are gone and during your life. Here are just a few:

  • A revocable living trust allows your assets to pass to your beneficiaries outside of the probate process.
  • A living will allows you to give control over your medical decisions to someone else in case you are seriously injured.
  • A durable power of attorney allows a person you trust to step in for you if you are unable to make an important decision due to incapacitation or unavailability (like being out of the country, for example).

Even though these tools are available and most people know that estate planning is important, it’s estimated that more than half of Americans who have children don’t have wills and 40 percent of Americans ages 55 to 64 don’t have a will.

It might not seem urgent to get your estate planning done, but the truth is you never know when you might die or become disabled and unable to make your wishes heard. That’s why it’s so important to start planning now.

How early should I start my estate planning?

It’s never too early for adults to build an estate plan. While a 65-year-old’s plan will look a whole lot different than a 20-year-old’s, both should put some amount of effort into ensuring they have a plan in place. That being said, as long you are mentally healthy, it’s never too late to make an estate plan either.

For young adults, estate planning tools such as a durable power of attorney, health care proxy and a living will are especially important.

If you have college-aged children, have them sign a durable power of attorney. It will allow you to step in for them to make important decisions if they are unable to do so. It can also make helping them in case of an emergency easier, like if they are overseas and you need to get in touch with the embassy or wire them money. Durable power of attorney can be set up so that you won’t have power unless your child becomes incompetent or unable to be present to make legal decisions, so your kids don’t have to worry about giving up any power unless it’s absolutely necessary.

Another form that young adults should sign is a health care proxy. This allows a trusted adult to make medical decisions for the person if they are unable to do so themselves. This document can be combined with a living will to express wishes for end of life care.

Where to begin.

A good place to start is by listing all of your assets. The big ones like your car, house and major bank accounts will be easy, but don’t forget about other smaller possessions, like your grandmother’s tea set that you want to leave to your granddaughter, for example.

Keep in mind that as our world becomes more and more technology driven, some of your assets may be on a computer or online. Make sure to list out all your usernames and passwords for online assets. You should also create a list of all the family members, friends or organizations you would like to leave things to and include their contact information.

It’s also a good idea to start a list of questions that start to come up in the beginning stages of your estate planning. When you are ready to meet with a lawyer to help you put your plan into action, all of your questions will be easy to access and you can be sure they all get answered.

How often do I need to update my estate plan?

Our lives are changing constantly, and just like your life is different now than it was 15 years ago, your estate plan needs to be different, too. You should look over your estate plan once a year and make updates if needed. If you don’t do it once a year, at least be sure to do it when big life changes happen, like when you get married or divorced, you have kids or a family member mentioned in your will dies, or when laws change.

What will happen if I don’t have an estate plan?

Dying without a will in place, or dying intestate, can make things difficult for the people you leave behind. Some scenarios are more straightforward than others. For example, in Arizona if you are unmarried and have no children, but your parents are still alive, your possessions will go to your parents. If you have kids, but no spouse, everything will be left to your children.

But if you are married and have children, or are married with no children, but have children from another marriage, dividing up your belongings gets a little more complicated.

Creating a good estate plan will ensure that you are in control of who gets what after you are gone. It will also prevent your family from fighting over family heirlooms and having to hire lawyers to help sort everything out.

Do I need to hire a lawyer to help me?

With all the different types of estate planning tools available, the process can get a little overwhelming. The easiest way to make sure your estate plan is legally binding and in line with your state’s current laws is by getting the help of an experienced estate planning attorney.

At Dana Law Group, we have more than 70 combined years of estate planning experience. We take the time to get to know you so we can help you build an estate plan that represents what is truly important to you and we review your plan regularly. Call us today at 480-924-4557 to schedule a free consultation.