Are you an adult with a checking account? Congratulations, you have an “estate.” One of the most common misconceptions about estate planning pertains to who needs one.
There’s no monetary threshold in the definition of an estate. If you have assets and you’re an adult, you have an estate that will need to be handled at the time of your passing. If you have no estate plan in place, your assets will be distributed via probate to the appropriate government entities and family members.
Most people, especially those actively thinking about retirement or end-of-life decisions, aren’t satisfied with the idea of a judge or rigid legal process making all the decisions pertaining to disbursement of assets. You’ve spent your entire life building your estate – shouldn’t you get to decide where it goes when you pass?
We’ve recently compiled a detailed report on the estate planning tools you can use to secure and strengthen your family when you’re gone. We’ve strived to explain the ways in which a comprehensive estate plan makes an extremely difficult time far easier for the people you love.
The Gift of an Uncontentious Grieving Period
If you’re a parent or a grandparent, it’s likely safe to assume that your passing is going to be hard on your immediate and extended family. Two specific end-of-life responsibilities makes the loss of a loved one far more difficult for some families: funeral planning and probate.
Unfortunately, the probate process and disputes regarding the dissolution of estates can become extremely contentious. This is especially true when there are heated disputes between children, ex-spouses or grandchildren regarding who is entitled to specific assets or properties. Those types of disputes can potentially tear a family apart.
Most people don’t want their familial legacy to be acrimonious, which is why it’s generally best to prevent that process from ever occurring via an air-tight estate plan.
What Do Community Property Laws in Arizona Have to Do with Death?
Community property laws are usually discussed in the context of divorce. Any assets acquired via work or purchased during a marriage are considered community property. Those assets must be split evenly during divorce proceedings.
The other event that triggers community property laws is death. In Arizona, your surviving spouse usually inherits your half of the community property as well as any separate property that wasn’t covered by community property laws (such as gifts, inheritance or assets and property acquired prior to the marriage).
Things get more complicated if the person who died has children from a previous marriage or relationship. In that scenario, it may be the children, not the surviving spouse, who inherits your one-half of the estate if you don’t have a will or estate plan in place.
You Can Help Your Family Grieve in Peace with an Estate Plan
Any person who has dealt with the death of a spouse or close loved one is likely familiar with the exceedingly long list of responsibilities that accompany this personal tragedy. Some of those tasks include:
- Planning a funeral service
- Scheduling and paying for embalming or cremation
- Deciding where a loved one should be buried, or where ashes should be scattered
- Purchasing a casket, urn or burial container
- Obtaining necessary permits and burial plot (if applicable)
- Working with appropriate vendors and service providers (florists, printers for prayer cards, clergy, etc.)
The process is arduous, complex and expensive. All these responsibilities can arrive entirely unexpectedly in some circumstances.
You can give your loved ones the gift of handling these tasks yourself via a thorough estate plan that clearly dictates your wishes and the vendors to use. Bills can also be dealt with in advance, such as pre purchase funeral services, burial plots, urns or caskets and other necessary services. You can even assign part of a life insurance policy to a funeral home to pay for expenses.
Doing so allows your family to grieve in peace instead of forcing them to stress about logistics and payment during a difficult time.
Our Retirement Planning Team Is Here to Help
At Fullerton Financial Planning, most of our efforts are dedicated to a happier topic – ensuring that you have the assets to maintain your desired quality of life during a long, relaxing and productive retirement.
Although it’s not a fun topic to discuss, end-of-life planning is an unavoidable aspect of aging. We’re happy to provide additional tax planning and estate planning services to ensure we can provide a one-stop solution for our clients in Phoenix.
Speak with one of our planners today by calling (623) 974-0300.
