Planning your estate can be as simple or as complicated as you need to make it, depending upon your circumstances. (Although legal advice from an estate lawyer is always recommended.) Certainly, estate plans are not just for the very rich.
Most adults and emancipated minors – men and women – want to make legal decisions about what is to happen to their children, spouses, properties, business interests, and more, in the event of their untimely death. But individuals can also decide how their residences, personal assets, healthcare, income, inheritances, and more will be handled during their lifetime. To control what happens in the future and near future, people should formalize their intentions with a written estate plan that satisfies all the formalities required by law.
The first step in creating an estate plan is to understand the different components. Every estate planning instrument has a specific purpose. Some people opt for a simple Last Will and Testament, while others desire a Will, Living Trust, Power of Attorney, and more. Importantly, before getting started, carefully consider all possible answers to the question “What happens if?” when creating your own estate plan. What happens if your children are minors and need a guardian? What happens if you are seriously injured in a car accident? What happens if you predecease your spouse? What happens when you are elderly and need 24/7 care? There is much to think about, so start with the basics.
What Is an Estate Plan?
The first division with any estate plan has to do with implementation. Estate plans vary, depending upon whether they will go into effect during the person’s lifetime or upon the person’s death. Some components will take effect during life (such as a power of attorney) while others do not have any legal effect until after the person’s death (such as a Last Will and Testament). In legal terms, this is the difference between inter vivos and testamentary intent.
What Instruments Go into an Estate Plan?
There are many possible elements for an estate plan. The most commonly used instruments are the:
- Last Will and Testament
- Living Trust (Inter Vivo Trust)
- Testamentary Trust
- Power of Attorney
- Designation of Health Care Advocate (medical power of attorney)
- Living Will (advance directive)
- Life Insurance (beneficiary designation)
- Disability Insurance
A knowledgeable will and trust lawyer can explain how all of these instruments are used and how they might apply to your circumstances.
Estate plans, especially those intended to protect assets, can be very complex and require careful consideration of federal and state tax issues. In all cases, contact an experienced estate planning attorney. One who can help create a plan that is best suited to you and your family's needs in anticipating and preparing for whatever the future may hold.
Brian Winter is a family law and estate planning attorney in Phoenix, Arizona. Mr. Winter is a partner with Stewart Law Group with offices throughout Arizona. The firm has helped many clients navigate the legal complexities of estate planning, wills, probate, divorce, child custody, spousal support, property division, parental visitation, and child relocation disputes.
