16 Dec Importance of an Estate Plan
Estate planning is a strategic step to setting your finances and assets in order prior to incapacitation or death. Life has many unexpected turns along the way, and when we plan for them them in advance, it saves time, money and unnecessary headaches. The estate planning process includes a last will and testament that gives your loved ones specific instructions for handling your estate upon your death. Phelps Law, with locations in Gilbert and Scottsdale Arizona, has more than thirty-five years of experience in strategic estate planning that will benefit you and your loved ones.
Negatives of No Estate Plan
Procrastination is one of the main culprits in preventing a solid and beneficial estate plan. Delays occur because we’re busy with everyday life, and we assume we have plenty of time to make decisions about an aspect of our life that seems far away, out there somewhere in the future. Unfortunately, at Phelps Law we have seen many people deal with financial hardships and battles in court because their loved one passed away without setting an estate plan in place.
The two main pitfalls of having no prior estate plan include:
- No Say in Estate Distribution: Without establishing a set of instructions on how you would like your own estate to be distributed, it is the state who decides. Each state has a unique legal process in deciding who will inherit the assets, but the normal outcome is that the inheritance is given to the surviving spouse and children, after all debts are paid. If no spouse or children are involved, then the parents of the deceased will inherit the estate. But if the parents are deceased, assets go first to the deceased’s siblings, and 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. Probate court means taxes and fees are compiled upon the transferring of assets. The process can take anywhere from six months to several years to be resolved, which 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 in a last will and testament to ensure that every aspect of your estate is covered.
- Final Bills: Part one deals with the details and instructions of how your final bills will be paid.
- Taxes: Part two addresses 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 addresses what kind of powers this person will hold, as well as who will be appointed as guardian for any minor-age children, if applicable.
- 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 made in estate planning.
Phelps Law, with their many years of experience, has seen their strategic estate plans play out with tremendous success. For 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)