What Are Five Important Elements of Estate Planning?

Developing a robust estate plan can give you peace of mind as you age. In Arizona, you can customize your estate planning strategy to match your personal and financial circumstances. Whether you’re looking for how to provide for your loved ones, preserve your business, or create a lasting legacy in your community, an experienced attorney can advise on common elements of estate planning and how they might fit into a comprehensive solution that aligns with your final wishes.

Last Will and Testament

A last will and testament outlines how you want your assets distributed after your death. It also allows you to name individuals to serve in key roles, such as a personal representative to manage your estate and a guardian to care for your minor children. Without a will, Arizona’s intestate succession laws determine how your property gets divided. The court distributes assets to descendants in a priority order, which could mean a relative you want to exclude for personal reasons could receive your property. Not having a will can also lead to delays, increased legal costs, and potential disputes among your heirs.

Trusts

A trust is a legal arrangement that holds and manages assets for designated beneficiaries. Trusts can help your estate avoid probate, minimize its tax burden, protect assets from creditors, and provide for minor beneficiaries or those with special needs. Larger estates may face a lengthy and public probate process without trusts. Trusts also allow you greater control than a will regarding when and how your assets are distributed.

Powers of Attorney

An accident, illness, or the natural progression of old age could mean that you become incapacitated at some point. A power of attorney (POA) grants someone you trust the legal authority to manage your affairs. Various powers of attorney arrangements can meet your needs. For example, you can appoint an agent to make medical decisions for you. You can choose the same person to make financial or legal decisions on your behalf or appoint different agents to serve in those roles. Having a POA can help your family make important decisions that protect your interests and ensure your wishes are carried out according to your preferences.

Healthcare Directive (Living Will)

A healthcare directive or living will is an estate planning document that clarifies your medical wishes to prevent confusion if you can’t communicate them yourself. Some of the matters typically addressed in healthcare directives include preferences regarding life-sustaining treatments, resuscitation efforts, and end-of-life care. A healthcare directive can spare your loved ones from having to guess about your preferences and be submitted to the Arizona Healthcare Directives Registry for easy access.

Beneficiary Designations

Finally, you should designate beneficiaries for assets like retirement accounts, life insurance policies, and payable-on-death bank accounts to identify who will receive these assets upon your death, independent of your will or trust. Be sure to update beneficiary forms after significant life events, such as marriage, divorce, or the birth of a child. Otherwise, your assets may pass to unintended individuals.

Create or Update Your Estate Plan With Help From Brown & Hobkirk, PLLC

For guidance on creating these critical elements of estate planning, consult with an experienced Arizona estate planning attorney from Brown & Hobkirk, PLLC. Call or contact us today for a free consultation.