Did you know that everyone needs an estate plan, regardless of the size of their estate, to ensure the distribution of their assets according to their wishes after they pass away?
Key Takeaways:
- Estate planning is essential for everyone, not just those with large estates.
- In Arizona, there are no inheritance or estate taxes, but without a plan, the estate goes into probate, allowing anyone to make a claim.
- A basic estate plan includes a will, but trusts can be used for larger families or assets.
- Assets include everything you own, from real estate to personal belongings.
- Consulting with an estate planning attorney in Arizona can help create a customized plan.
The legal phrase estate planning makes it sound as if you need to own an estate to create a plan for your loved ones’ future. That’s not true. Every person needs to make an estate plan, a term that simply means a plan for what will happen to your belongings, including your house when you die.
According to Smart Asset, in Arizona, the state does not charge inheritance taxes or estate taxes, so all of a person’s assets get distributed to their heirs. Without a plan for the distribution of assets though, when you die, your estate goes into probate. The probate court allows anyone to claim your estate, so while your spouse or children might obtain a portion of it, a cousin you’ve never met, or a creditor could also claim part of your estate. Making an estate plan creates a formal, legal instruction manual for the distribution of your assets.
What Goes in an Estate Plan?
Estate plans can consist of a simple set of documents or a complex system of documents. The most common set of estate documents, the will, has been immortalized in film, TV, and books. Those legal instruments work well for a simple estate, but choose a trust if you have a large family, many assets, a family member who will need nursing care, or a caregiver after your death.
A trust can create a living estate system, meaning one you can add to while you remain alive. This trust type refers to a revocable trust. You can also create a trust that remains the way you created it and that you cannot change after its creation, called an irrevocable trust.
From there, estate planning grows in complexity, including durable power of attorney documents, living wills, etc., according to Investopedia. Some individuals create more than one trust and have a testament. Which combination of estate options you choose depends on your assets and family situation. Consulting with attorneys in Mesa, AZ, who specialize in estate planning to create the ideal estate plan for your situation provides the best solution.
What Is an Asset?
Everything you own counts as an asset from your home to your car. Your camera, computer, kitty cat, puppy dog, chinchilla, or gecko count, too. If you collect baseball cards, guitars, harmonicas, or typewriters, those also fall into the category of assets. Most people think of stocks, bonds, savings accounts, mutual funds, etc. That probably explains why so many people don’t realize that they need an estate plan.
Getting Started with Estate Planning
Contact an attorney in Arizona who specializes in estate planning. Meet with them to discuss the many assets you own and who you want them to pass on to when you die. Also, discuss whomever in your family may need special care after you die, so your estate can provide for them. The sooner you create your plan, the better protected your loved ones will be.
Conclusion
Estate planning is a crucial step in ensuring that your wishes are respected and your loved ones are protected after your passing. It’s a common misconception that only those with large estates need a plan, but in reality, everyone can benefit from having a formal instruction manual for the distribution of their assets. By understanding what constitutes an asset and seeking the expertise of an estate planning attorney in Arizona, you can create a personalized plan that provides peace of mind and security for your family’s future. Don’t wait – get started on your estate plan today!
