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Estate Planning Checklist in Arizona

Posted on : February 4, 2019, By:  Christopher Hildebrand
Estate Planning Basics

A Good Estate Planning Checklist in Arizona

Not everyone realizes they need an estate plan. However, it is inevitable that each and every one of us will need to have an estate plan in place to deal with our death or possible disability in the future. It is also true that an estate plan for one person may look completely different for another person. The estate planning checklist that follows will help you decide what estate plan works best for you.

1. Arizona Estate Planning Basics

An estate plan addresses important decisions and issues that occur in the event of someone’s death or disability. The estate plan will determine what happens to the assets your own, the payment of your debts, the financial support available to your family, an attempt to avoid probate court and, in some cases, minimizing estate taxes in the process.

There are many ways these needs can be met by using beneficiary designations on accounts and other assets and by setting up appropriate estate planning documents, such as a Will or a Trust. Estate planning should also consider appointing a guardian for minor children, as well as have a plan for your medical care in the event you were to become disabled.



2. Estate Planning for Your Assets

Many financial assets, such as retirement, investment, life insurance, and bank accounts can be automatically transferred to whom you wish upon your death simply by adding that person as the beneficiary of that financial asset. The financial asset is still owned solely by you but would pass upon your death to the named beneficiary. You may also change your beneficiary designations at any time.

Another approach is to title assets as joint tenants with the rights of survivorship. This, however, places ownership in both your name and your beneficiaries’ name. The problem with this approach is that the beneficiary now equally owns half of that asset and you cannot change your mind and take that ownership back. Since you can simply use a beneficiary designation without giving away half of your estate during your lifetime, joint ownership of assets is not typically part of an estate plan.

3. Debts and Estate Planning

Many people wonder what happens to your debts upon your passing. Your creditors can sue your estate if your debts are not paid, so figuring out what do with your debts is an important thing to think about when making your estate plan. If your estate will have enough money to pay off your debts and you will still have enough money left over for your loved-ones to inherit, debts will not be much of a consideration.

However, if you have a lot of debts, you may consider securing a life insurance policy, naming your estate as the beneficiary of that life insurance policy, and including provisions in your estate plan to pay off those debts to ensure your heirs receive enough of an inheritance to support themselves.

4. Last Will and Testament

As you can see, a lot of financial assets and other property can go to your heirs through beneficiary designations. As to the rest of your property that cannot be passed to your heirs through beneficiary designations, a Last Will and Testament can be used to pass your remaining assets to your heirs. Although a Last Will and Testament will suffice, your estate may still need to finalized in probate court. The disadvantage of “probating” your estate is that it requires your family to get court approval of the transfer of your assets according to your Will.

You will also have to appoint someone to be the executor of your estate. An executor is a person you designate to make sure all of the assets pass to your heirs according to the terms of your Last Will and Testament. You can also designate someone to be the guardian of your minor children.

5. Living Trusts in an Estate Plan

Because many people want to avoid their family having to go through probate court, many people creating an estate plan opt to create a living trust; sometimes referred to as a “family trust”. These trusts can be either revocable or irrevocable; meaning you can either terminate the trust at any time or you are prohibited from terminating the trust.

You then title all of your assets, such as your house, cars, financial accounts etc into the name of the trust you have created. You will typically name yourself as the trustee of the trust, but you will name someone else to become the successor trustee upon your death. The person named as the successor trustee would then distribute your assets out of the trust to your beneficiaries according to the exact terms of the trust you created. All of this negates the need to go to probate court; saving your family time and money.

6. Financial Power of Attorney

A Financial Power of Attorney enables someone else to manage your assets. In estate planning, these powers of attorney are referred to as Durable Financial Powers of Attorney. The term “durable” simply means the power of attorney continues to allow another person to manage your assets upon your death. These powers of attorney, by their very terms, do not allow a person to manage your assets and finances until you are declared unfit to do it yourself or upon your death.

Having a financial power of attorney also prevents your family from having to go to probate court to obtain control over the management of your assets. This can prevent a lot of frustration and confusion in the event of a person’s death or sudden incapacity.

7. Health Care Power of Attorney

Estate planning also involves decisions about your medical care in the event you are unable to make those decisions for yourself through the use of a Health Care Power of Attorney. In a health care power of attorney, you designate who can make medical decisions for you in the event you are unable to make those decisions for yourself. It is, therefore, important that you educate the person to whom you are giving the Health Care Power of Attorney about your wishes regarding your medical care should you be unable to make those decisions for yourself.

8. Living Wills

You also need to decide if you want a Living Will and what you will include in that Living Will. A Living Will contains your express wishes regarding end of life care and what medical procedures you authorize in the event of your incapacity. This enables you to maintain control over what life-saving medical procedures you authority and which you do not authorize and it takes precedence over anyone holding your Healthcare Power of Attorney.

9. Letter to Your Executor

It is a good idea to leave a letter to your executor to help guide him or her in locating your estate planning documents, understanding all of the assets and debts you have, and providing an explanation of what you have decided to do with your estate. You should also include the name, address, and telephone number of all of your heirs to enable your executor to contact those people.

We hope this information was helpful to you. Please call us at (480)947-4339 to schedule your free personalized estate planning consultation today.

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