As trusted estate planning attorneys, we often hear some of the same questions from clients considering an estate plan for the first time. Below, we have compiled some of these FAQs we often come across and offer a brief explanation:
What is estate planning?
- Estate planning involves making arrangements for the management and disposal of a person’s estate during their life and after death, including wills, trusts, powers of attorney, and health care directives.
Why do I need an estate plan?
- An estate plan ensures that your assets are distributed according to your wishes, minimizes taxes, provides for your family, and appoints agents to make decisions for you during your lifetime if you are ever incapacitated/unable to do so yourself.
What happens if I die without a will?
- If you die without a will, your assets will be distributed according to Arizona’s intestacy laws, which may not align with your wishes. It can also sometimes lead to a longer and more costly probate process, depending on the circumstances.
What is a will, and why is it important?
- A will is a legal document that outlines how your assets should be distributed after your death. It can also name guardians for minor children and an executor (or personal representative in Arizona terms) to manage your estate. It also commonly waives the requirement for the personal representative to obtain a probate bond, saving both time and money.
What is a trust, and how does it differ from a will?
- A trust is a legal arrangement where a trustee (a trusted individual that you select) holds and manages assets for beneficiaries. Trusts can help avoid probate, provide privacy, and manage assets during your lifetime and after death.
Do I need a living trust?
- A living trust can be beneficial for avoiding probate, managing assets if you become incapacitated, and ensuring privacy. Whether you need one depends on your specific circumstances and goals, but there are plenty of advantages worth considering.
What is probate, and can it be avoided?
- Probate is the legal process of validating a will and/or distributing assets. It can be time-consuming and expensive. Probate can be avoided through strategies like living trusts, joint ownership, and beneficiary designations.
What is a power of attorney?
- A power of attorney is a legal document that grants someone (called an agent) the authority to act on your behalf in financial or medical matters if you become incapacitated. These documents provide crucial protection during your lifetime from life’s unexpected twists and turns.
What is an advance health care directive (or living will)?
- An advance health care directive, or living will, outlines your wishes for end-of-life medical treatment if you become unable to communicate them. It can dictate the level of care you wish to receive, from full life-sustaining measures to simple comfort care.
Can I make changes to my estate plan?
- Yes, you can and should update your estate plan as your circumstances and wishes change. This can involve amending your will, updating beneficiary designations, or modifying trusts.
How often should I update my estate plan?
- You should review and update your estate plan every few years or after major life events such as marriage, divorce, the birth of a child, moving into a new home, or significant changes in your financial situation.
Can I use online estate planning tools?
- While online tools might sometimes be helpful for simple estates, more often than not we see scenarios where clients have created more problems for themselves than solutions. Hiring an attorney is not the cheapest option, but it is the best option to make sure your plan is done correctly. Don’t fall for “attorney review” options these services offer – you get what you pay for, and it turns out to be very little help indeed.
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Hopefully, these FAQs have shed some light on any lingering questions you may have about estate planning. If you still have questions, our blog has a wealth of knowledge for you to look through. You can also schedule a free, 30 minute consultation with us to discuss your needs and options. Either way, we are always here to help!