While no one likes to think about their death – particularly if they’re healthy and it seems a long way away – unforeseen circumstances can happen. For this reason, it’s a good idea for anyone with assets or loved ones to take the time to prepare the paperwork that will protect their assets for their heirs.
A last will and testament will ensure that your assets are distributed in the manner you choose in the event of your death. It’s also the way to pick an executor and nominate a guardian for any minor children (if applicable). If you pass away without a will, the determinations of who gets what are made based on the laws of your state of residence, not your wishes or those of your heirs. The process that would follow, probate, can be expensive and time-consuming, leaving your heirs with no access to your assets for a long time.
It’s important, however, not to confuse creating a will with estate planning. While a will is one important part of estate planning, there are other elements to consider, including:
Add an Advanced Directive
In addition to a last will and testament, you may wish to prepare advanced directives should you become incapacitated. A living will, sometimes called an “advance health care directive,” is a legal document that identifies a person of trust – a family member or friend — to make decisions about your assets if you are unable to do so, either temporarily or permanently.
Designate a Power of Attorney
A durable financial power of attorney (POA) transfers the right to an individual or organization that you designate the ability to make financial decisions for you if you are not able to do so yourself.
Consider the Creation of a Trust
The purpose of a trust is to help you ensure that your estate plan is executed according to your specified wishes. A trust can also help protect your estate from entering probate, in which a judge – and not your heirs — will make decisions about the transfer and distribution of your assets. There are several types of trusts, including revocable living trusts, irrevocable trusts, and charitable trusts, so it’s a good idea to consult with an estate planning expert to determine which is right for your situation.
Revisit Your Plans Regularly
As time passes, children grow up, needs change, marriages happen (or dissolve) and many other circumstances change. The will you made five years ago may no longer be accurate and match your wishes today. It’s a good idea, therefore, to revisit your plans every few years and ensure your end-of-life documents reflect your current wishes.
Consult with a Professional
While there are certainly ways to DIY your estate planning, these solutions tend to be very basic and may not meet all your needs. To ensure that your estate planning is carefully and thoroughly done in accordance with all current laws, consult with a professional estate planner. Arizona-based Prime Wealth Advisors is a full-service tax, retirement planning, estate, and wealth management firm that can take the guesswork out of filing your taxes.
Call 623.77.PRIME or visit our website for more information.