16 Dec Importance of an Estate Plan
Estate planning is a strategic step to getting your finances and assets in order prior to incapacitation or death. Life has many unexpected turns along the way, and when we can plan for them them ahead of time, it saves time, money and unnecessary headaches. The estate planning process includes a last will and testament, which leaves your loved ones with specific instructions on what to do with your estate upon your death. Phelps Law, with locations in Gilbert and Scottsdale Arizona, has over thirty-five years of experience in strategic estate planning that will benefit you and your loved ones.
Negatives of No Estate Plan
Procrastination can get in the way of establishing a solid and beneficial estate plan. Many times the delay comes from the thought that there is plenty of time. Unfortunately, we have seen many people deal with financial hardships, headaches, and fighting in the courts when their loved one passes away without an estate plan. The two most substantial downfalls of having no prior estate plan include:
- No Say in Estate Distribution: Without establishing a set of instructions for how to distribute your own estate, it will then be up to the state to do so. This can become a mess for anyone involved. Each state has their own legal process in place that decides who will inherit the assets. Though the states differ in their legal processes, usually they will give the inheritance to the surviving spouse and children after being sure all debts are paid. If there is no spouse or children involved, then the parents would inherit. If the parents are deceased, then it would go to an individual’s siblings, then to the nieces and nephews. This is the usual route of inheritance being distributed through the state courts.
- Probate: With no prior protection established through a well-thought-out estate plan, your assets will be handled by probate courts- which means taxes and fees are compiled upon the transferring of assets, and it can take anywhere from six months to several years to be sorted out. This means your family will have limited-to-no-access to the assets of their loved one until probate is fully completed.
Components of an Estate Plan
While putting your affairs in order, there are four specific components you will use in a last will and testament to ensure everything is covered. This includes:
- Final Bills: Part one deals with the details and instructions of how your final bills will be paid.
- Taxes: Part two will address the estate taxes and inheritance taxes, and how they will be paid.
- Overseer: Part three addresses the person who will be put in place to deal with settling your estate. This section will address what kind of powers this person will hold, as well as who will be appointed as guardian for any minor-age children you are responsible for.
- Inheritance: Part four establishes who will receive the inheritance of your estate, how they will get it, and when they will receive it.
These sections of the last will and testament are imperative to ensuring you have a wise estate plan that is not encumbered by any of the more common mistakes often made in estate planning.
Phelps Law, with their vast years of experience, has seen their strategic estate plans play out with positive outcomes. For further asset and financial protection for you and your loved ones, contact us today!
Images used under creative commons license – commercial use (12/12/2017) Charly W. Karl (Flickr)