4 Key Elements of Estate Planning

As this past year has demonstrated, life is very unpredictable. Illness can strike us all, and even young, healthy people can pass away without an estate plan. This can create a very complicated situation for the loved ones they leave behind.

Dying without an estate plan in order can really leave your loved ones with the expensive and stressful process of trying to sort out your estate. This is especially true for those individuals who have minor children, own property, or are business owners.

Estate Planning allows you to say how you would like to be taken care of if you become incapacitated. Having your estate plan in order provides tremendous peace of mind for your family because it leaves nothing to chance. An experienced attorney can help you create an estate plan that ensures your wishes are carried out after your death, while minimizing legal hurdles, tax burdens, and other obstacles for your family. After all, the purpose of an estate plan is to make sure things go according to your stated plan after your passing.

If you are just getting started with the estate planning process, here are four key elements of estate planning that you should be aware of:

1. Last Will and Testament
   • What does the Last Will and Testament outline?

     Everyone over the age of 18 should have a Last Will and Testament. This is especially true if you have minor children, as this document is the only way you can legally name a guardian for minor children in Arizona.

     A Last Will and Testament is by far the simplest estate planning document available as part of your estate plan to help preserve your legacy and prevent any family disputes. It can also be drafted by an estate planning lawyer at a reasonable cost.

     Your Last Will and Testament should outline the following information:

     1. Identifies Your Intent– Your Last Will and Testament is a legal document where you identify who should receive your property and possessions after you pass away. The word “last” confirms that the document is your final declaration and revokes all previous wills you may have signed.
     2. Names A Personal Representative (“Executor”)- Your Last Will and Testament should name a personal representative who will manage the distribution of your assets. In Arizona, this person is referred to as a “personal representative,” but in other states they are commonly referred to as the “Executor.” The personal representative will make sure your intentions are carried out, will resolve any claims on the estate, and will ensure that all taxes are paid before a final distribution is made.
     3. Formalizes Important Decisions– Your Last Will and Testament should formalize your final wishes on important life decisions such as guardianship and asset distribution. This can include decisions about guardianship of children, pets, and other special provisions and instructions. It should also include a list of your assets and which beneficiaries receive them, as well as any other special conditions.
2. Healthcare Power of Attorney and Living Will

   • How do I know who to designate on my Healthcare Power of Attorney and Living Will?

     Your Healthcare Power of Attorney and Living Will give your designated agent the authority to make your medical decisions if you become unable to direct your own medical care because of illness, an accident, or advanced age. Many people put this part of estate planning off because it’s not an easy topic to talk about. However, if you don’t plan, these important decisions could end up in the hands of estranged family members, doctors, or even judges. Now ask yourself, would they be able to make decisions for you that are consistent with your wishes?

     When choosing who to designate as your healthcare agent, consider the following factors:

     1. Trust– Do you trust your designated agent and feel confident discussing your wishes for medical care with them? Your agent doesn’t need to agree with your wishes, but they must respect them and carry them out according to your wishes. For this reason, most people designate a spouse, partner, adult child, relative, or close friend as their designated agent.
     2. Assertiveness– Your designated agent may have to be assertive with estranged family members or medical personnel in order to assert your wishes. If you think there may be conflict with carrying out your wishes, make sure to choose someone who isn’t afraid of conflict or speaking up for you.
     3. Location– Proximity can be critical when decisions need to be made quickly. While you don’t need to select someone who lives in the same city or state, you will want to take your prospective agent’s location into account when designating an agent. You will want someone who is easily and readily available to make healthcare decisions on your behalf (either in person or via phone/zoom). Also, the proximity of your agent may be important if you have a long illness. For example, your agent may need to spend weeks or months nearby to assist with your healthcare decision making.
     4. Alternate Agent(s)– You may want to name one or more alternate agents to represent you if your first choice is unable (or unwilling) to act as your agent. It’s a good idea to name at least one alternate agent. Keep in mind, you should be just as thoughtful about naming your alternate(s) as you are about picking your first choice. Select only those individuals that will faithfully carry out your healthcare wishes.
3. Financial Power of Attorney

   • What should my Financial Power of Attorney include?

     Your Financial Power of Attorney gives your designated agent the authority to make your financial decisions if you become unable to do so because of illness, accident, or advanced age. It should include the following:

     1. Written– Your Financial Power of Attorney should be in writing and should outline the powers being granted.
     2. Names an Agent– The document should designate an agent and include sufficient and specific language to show your intention to grant the listed powers to the agent. It should also include language about when the powers become effective (immediately or when you become incapacitated).
     3. Notary and Witness Requirements– The person granting the powers must sign the document before a notary and have it witnessed by one disinterested person, in accordance with Arizona law.
4. Establishing a Trust

   • How can an attorney assist me when establishing a Trust?

     A trust is a legal document that allows a third party (“Trustee”) to manage your remaining assets after you die and to distribute those assets to your beneficiaries.

     An estate planning attorney can help you establish a trust by:

     1. Providing Legal Advice– A skilled estate planning attorney will know the current laws and how any changes in the law may affect your estate plan. Your attorney will also be able to advise you on the best type of trust to fit your specific needs and life circumstances.
     2. Navigating Complex Family/Financial Situations– Your attorney is a neutral third-party and will listen to your needs and offer advice when needed. For example, an estate planning lawyer can help advise you on who to select as your trustee.
     3. Drafting Trust Documents– Your lawyer will draft your trust documents and make sure that they comply with all applicable laws.

Contact Us

Your estate represents financial security for your spouse and children, regardless of the size of that estate. It’s very important to use a competent estate planning attorney to make sure that your estate plan is properly drafted and to help protect your family’s financial future.

When you hire Brown & Hobkirk, PLLC you can rest assured that our skilled and attentive attorneys will help you effectively plan your estate planning documents. We will take the time to customize your estate plan to meet your specific goals.

To get started, contact our legal team today.