Estate planning is key to ensuring the security of your finances and personal assets in the future. It allows you to feel comfortable about what would happen to your estate at the time of your death or incapacitation.
Estate planning lets you outline how you would like your assets managed and loved ones cared for. With the help of an attorney, you have the power to designate who controls your finances and who makes medical decisions if you become injured or ill.
Estate Planning Checklist
It’s not uncommon to have an attorney guide you through the details of the estate planning process, but there are some basic things you can do on your own to safeguard your estate.
- Create an inventory of your assets (tangible and intangible)
- Consider your family’s long-term quality of life needs and expenses
- Decide which legal directives you need, like a power of attorney, medical care, a trust, etc.
- Review your list of beneficiaries and check policies/insurance accounts to see who is listed as a beneficiary
- Be aware of your state’s estate tax laws and if/how they might affect your loved ones
- Seek professional guidance from an attorney or estate tax professional
- Revisit your estate plan and be open to revising it, if necessary
Why Is Estate Planning Important?
An estate plan gives you peace of mind that you always have control over your assets — even after your death. It removes the stress on your family and gives them a roadmap for dividing your assets. An estate plan is designed by you to guide your loved ones through the process of what to do when you pass away. It honors your memory and continues traditions or legacies that are important to you.
It can also help prevent family feuding over inheritance and bequeathments after your passing.
When Is a Good Time to Start an Estate Plan?
There is a preconceived notion that estate planning is only for those who might be getting closer to retirement or the end of their life. The truth is anyone can draft their estate plan no matter their financial situation or how old they are.
Estate planning lays out what happens to your money, belongings, kids, house, car, pets, digital assets and accounts. Some estate planning tools can even potentially be used to reduce your current tax burden.
It’s okay to take time and think about what is important to you and how you would prefer your assets to be distributed after you pass.
Does an Estate Plan Ever Need to Be Updated?
An estate plan is intended to be altered and adjusted as you grow older and circumstances change. A good rule of thumb is to review your estate plan every few years or whenever there’s a material change in your family or financial situation. It’s also important to note any amendments to state or tax laws and how those changes might affect your plan. Meeting with a financial advisor and estate planner may help you decide whether it’s necessary to update your documents.
What Documents Does an Estate Plan Require?
An attorney, paralegal, or estate tax professional can help you determine which documents you need to establish a comprehensive estate plan.
- Living will: A legal document that states your preferences for medical treatment
- Health care proxy: The person you authorize to make medical decisions for you if you become incapacitated
- Power of attorney: The person who is granted legal rights to make decisions on your behalf about your health care, finances and legal affairs
- Last will and testament: A legal document that provides instructions for handling your assets after your death and usually specifies who will receive them
- Insurance policies: Life insurance policies should ideally come close to replacing your income and providing for your family after your death
Get Help with Estate Planning in Phoenix
While estate planning and retirement planning aren’t necessarily the same, they do go hand in hand. Fullerton Financial Planning helps those who are thinking about retirement. We gladly offer estate planning to ensure our clients and their families are protected as much as possible from probate. Call us at 623-974-0300 to schedule an appointment.
