Date: Mar 06TH, 2024

Where to Start with Estate Planning

Estate planning is important at any age, but the closer you edge toward retirement, the more urgent the need. The consequences of insufficient estate planning are dire: they include family legal battles; long, drawn-out intestate procedures that can go on for years; or a loss of control over medical decisions and control of your assets. For this reason, the time is now to begin effective estate planning. But it’s a lengthy and complex process, so you may be wondering: where do I start?

Begin With a Will

To begin your estate planning, you will want to create a last will. The goal is to ensure that you don’t pass away intestate (without a will), which means state government officials will decide how to distribute your assets. This process is complex and takes a long time and may not divide your estate the way you would have wished. 

Before you begin drafting a will, you’ll need to do an inventory of your assets and choose beneficiaries from among family, friends, or charitable organizations. 

Consider if a Living Trust Works for You

A living trust is another option you may consider. This trust delineates who will receive your assets after you have passed away but transfers ownership of those assets into the trust you set up. During your life, you remain in control of your property. A strong benefit of a living trust is that once you have passed away, your assets go directly to your beneficiaries without the need to go through probate court, which can save significant time and money. 

Consider Creating a Living Will

As people live longer today, they often require complex medical care at the end of their lives when they may not be in a position to make decisions. A living will, or an advance directive, is a legal document that outlines your wishes regarding the type and extent of medical care you wish to receive (or don’t wish to receive, in the case of life support or feeding tubes) in case you become ill and incapacitated and cannot communicate your wishes. 

Ensure the Smooth Transition of Assets to Your Heirs

Estates are often complex and expensive to settle, so the more steps you take in advance, the better you can ensure that your heirs won’t wind up facing delays, disagreements, or high costs. In smart advance planning, you can also take steps to minimize the taxes heirs will need to pay. 

Minimizing Tax Implications in Estate Planning

A majority of estates today will not owe any federal estate tax, as only estates worth more than 12.92 million dollars (as of 2023) are subject to federal estate taxes. If your estate is worth more than that, it’s important to discover the ways you can minimize these taxes so you can pass along as much of your estate as possible to your heirs. 

Developing Comprehensive Estate Plans

A financial advisor is invaluable for estate planning. These are professionals who will work closely with you to determine your unique financial goals and needs and help you create a plan that will meet those needs. 

Arizona-based Prime Wealth Advisors is a full-service tax, retirement planning, estate, and wealth management firm that can craft a robust wealth protection plan to cover you, your business and your heirs. Call 623.77.PRIME or visit our website for more information.