PHOENIX ESTATE PLANNING
Where There’s a Will, There’s a Way
A recent Caring.com study found that 60% of Americans don’t have an estate plan in place. This is amazing to me because I truly believe it is one of the best ways we can protect our families when we are no longer able to do so.
It lets us provide for our spouses, children, and grandchildren, and ensures that the assets we have spent a lifetime collecting go to the people we love. These documents can ensure we spend our final days the way we desire, and outline how we want to be cared for.
Why Do I Need an Estate Plan?
Many people mistakenly believe that they do not have any assets, or that they have plenty of time to create an estate plan in the future.
However, making an estate plan is more than just distributing vast estates among extended family. If you own a house or car, or contribute to a retirement plan at work, you have assets that will go somewhere after you pass. If you have young children, part of your estate plan is considering who will be their guardians after you die. If you are a small business owner, you should take into account what your succession plan will be.
Unfortunately, many people leave their estate planning until it is too late. In order to create a last will or assign power of attorney authority to someone, you must be legally competent to do so. Although everyone should have the opportunity to live a long and full life, this is unfortunately not always the case. If you are hit by a bus tomorrow and are put into a coma, who is in charge of consenting to surgery? At what point do you want to be taken off of life support?
Similarly, your mom may be healthy now, but if she receives a diagnosis of dementia or Alzheimer’s disease, she will no longer be able to sign a power of attorney or place assets into a trust. It’s never too early to start thinking about end of life care, but there may come a day where you will be unable to make these decisions.
Remember - estate planning is not a thing to do once and forget about. Our lives change in remarkable ways over time, and our estate plans should change too. If you are young and just beginning your life, your plan may be relatively simple, but as your wealth and family grow, you will have more to take into consideration and your estate plan should grow as well.
What is Involved in the Estate Planning Process?
Estate planning is like a puzzle - the process involves putting together a number of documents, each with its own important role.
When I meet with clients to discuss their estate planning options, I discuss each type of document. We will talk about the importance of each item, as well as any potential drawbacks. I will go over your options, as well as any questions you have about these papers.
Revocable Living Trust
A revocable living trust allows you to distribute your assets to your family after you pass. When you create this document, you will select a trustee who is in charge of the assets. The assets in the trust will be held for the beneficiary in the trust and distributed according to your instructions.
One of the biggest benefits of a trust is that it is easy to protect your young children and grandchildren if something happens to you. Your trust can be set up to provide for their day-to-day needs, or it can be designed to provide for future educational expenses.
Additionally, all assets that are either placed into a trust or name a trust as a beneficiary avoid probate.
Similar to a revocable living trust, a last will is a document that allows you to distribute your assets after you pass. Instead of a trustee who is in charge of trust administration, you will select an executor, or Personal Representative, who is in charge of distributing your assets.
This document is also important if you have minor children because it will name who the children’s guardians will be. This is the only document where you will make this decision, so it is important to have a last will in place, even if you have a revocable living trust.
Durable Power of Attorney Documents
Power of attorney documents are put into place to ensure that you are properly cared for while you are still alive. You will choose an agent to handle certain matters after you are no longer capable of making decisions on your own.
There are three different types:
- A financial power of attorney gives your agent power to handle all your financial matters.
- A health care power of attorney gives your agent authority to make medical decisions, including the authority to consent or withhold consent for medical procedures.
- A mental health care power of attorney gives your agent authority to decide if you need psychiatric hospitalization.
Without these documents in place, your family will need to go to court to apply for guardianship or conservatorship before they can take care of you. This can create additional stress and expense in a time of crisis, so it is important to sign these documents while you are still mentally capable.
When preparing your power of attorney documents, one of the most important things is selecting an agent who will do his or her job well. Your agent will have a significant amount of power and responsibility, so you want to choose someone who will act responsibly. You and I will discuss the specific duties your agent will need to carry out, as well as criteria for selecting the best agent for you.
Medical Living Will
Finally, your medical living will is the document that states whether or not you want to “pull the plug.” This document allows you to consider what you want your final days to look like, including where you want to spend them, and is highly flexible to match your desires. Similar to power of attorney documents, as long as you are not incapacitated, you can decide to change or revoke this document at any time.
My Holistic Estate Planning Approach
I believe in taking a holistic approach to estate planning because life isn’t limited to the contents of documents. Instead, my practice focuses on assisting my clients in making important decisions affecting their lives, and the lives of their families. I ask: What are your goals for your family after you pass? What are you afraid of? How do you want to spend your last days?
I take the time to get to know each of my clients and work through each option available. Estate planning is not a one-size-fits-all approach - it is as unique as your family. Even though there is a perception that this area of law is shrouded in death, many people find comfort in making plans to help their families and loved ones when they are no longer able to do so.
I am based in Phoenix, Arizona. I also assist clients outside Maricopa County via email and Skype. This article does not provide legal advice. To schedule an appointment to begin discussing your estate planning needs, contact me online or call me at (602) 996-4076 today.