Estate Planning Overview

Why Is Estate Planning Necessary?

Estate Planning in Arizona is a process that has great value both while you are alive, and after you pass away. It allows you to protect assets for the benefits of your heirs and keep them from being reached by creditors or litigious people.  For example, if you are involved in an accident that is your fault, then the other party might only be able to recover the maximum of your insurance proceeds, if you have had placed everything else inside of a Revocable Living Trust.  This could prevent you from losing everything.

Estate Planning also protects you if you become incapacitated.  If you have a lengthy illness, a bad accident, a stroke, dementia, etc., and you plan correctly, you can put your Agent/Personal Representative in charge of your health.  They can then make all the health decisions on your behalf, as contained in your Estate Planning documents.  

Estate Planning also helps you direct exactly who gets what (and when) after your death.  For example, you can leave a certain amount of money (via percentages) to your children which can be spread out as they attain certain ages (i.e., 25% at age 25, 25% at age 30, and the balance at age 35).  This allows your children time to become more mature and wiser about their spending as they age.

Also, proper Estate Planning allows you to direct your Final Wishes as to burial, cremation, etc.  It may be your wish to be buried at a specific cemetery in a specific place.  Or, you may wish to be cremated and have your ashes spread in several different locations at several different times of the year (with specifically chosen people to complete your final wishes.)

Lastly, if you die without a Will or Trust (i.e., “Intestate”), you are leaving all decisions    up to the State of Arizona in regards to who will get your assets, who will be the Guardians of your children, who will be the person to represent you in your affairs, and what will occur to your body after your passing.  This is probably the worst-case scenario, and it is known as “Intestate Succession.”

Beware: New rules have recently been passed regarding Individual Retirement Agreements (IRAs) and Required Minimum Distributions (RMDs).  Because of these changes in the law, many people who have created Wills and Trusts prior to 2020 now have outdated documents.  This is why it is necessary to have a skilled Estate Planning Attorney review your documents as soon as possible.  Also, keep in mind that a Beneficiary designation on these types of accounts will normally overrule any Last Will and Testament, should there be a difference between the two. Depending how you designate your Beneficiaries, this could have major tax consequences if done incorrectly.  One of the major benefits of a Revocable Trust is that it can be cancelled at any time by the Grantor (i.e., the maker of the trust).  The maker of the trust qualifies as both the “Grantor,” who puts the assets in the Trust), and as the “Beneficiary,” who retains ownership of the assets and receives any income from the assets.