A little forced time away from the office might be an ideal time to get yourself organized and check some things off that TO DO list. One thing people commonly put off doing is creating or updating their estate planning documents. In fact, studies have reported that more than half of Americans do not have a Will. Having at least a Will and a power of attorney, both financial and health care, can be critical particularly for those individuals that have children under the age of 18. Below are a few items to consider.

1. Do you have a Will or trust?

The term “estate” essentially refers to everything you own. A Last Will and Testament, commonly referred to as simply a “Will,” is prepared to ensure your physical possessions and property are distributed as you wish upon your death. The creation of a Will alone requires certain steps to be followed, but a Will can be drafted relatively inexpensively.

If the personal property and real estate owned by you at the time of death exceeds certain minimum monetary thresholds, before those assets can be distributed, they must go through a legal process referred to as “probate.” The probate process can be lengthy (i.e., 6 months or longer) and, on occasion, costly. Setting up a trust is one way to avoid probate and, depending on the value of your estate, it can also prove to be a valuable tool to help minimize or avoid certain estate taxes. In addition to avoiding probate, having a trust will be extremely beneficial in the event that you become incapacitated. Even if you already have a Will and trust, it is a good idea to review them periodically as updates are frequently needed or desired as circumstances change.

2. Is a beneficiary deed a good option for you?

In Arizona, another effective and less expensive alternative to a trust exists if the only significant asset you intend to leave your beneficiaries is your home. This device is called a “beneficiary deed.” A beneficiary deed is a deed to real property that specifies who should receive ownership of the real estate upon the death of the current property owner. The designated beneficiary can be either an individual or it can identify multiple beneficiaries. A beneficiary deed can also designate a successor beneficiary. In order to be effective, the beneficiary deed must be executed in accordance with the law and recorded in the office of the county recorder of the county in which the property is located prior to the death of the property owner.

3. Do you have the proper documents prepared in the event you are unable to make health and financial decisions?

To ensure your health and financial decisions continue to be made in accordance with your wishes should you become incapacitated and unable to make sound decisions, you should make sure certain documents, such as a Durable Power of Attorney, a Health Care Power of Attorney, and a Living Will, have been prepared.

4. Are your beneficiary designations on accounts and insurance policies up-to-date?

In addition to trusts, there are other options to avoid probate proceedings. For example, bank and investment accounts, life insurance policies, and annuities typically allow the owner to assign a beneficiary to inherit the funds upon the owner’s death. If you previously designated beneficiaries on the foregoing policies and accounts, it is a good practice to keep track of who is to receive what as it may be something you wish to change or it may influence what you leave people in your Will or trust.

For more information on this topic or other business law and commercial litigation matters, please contact Mr. Olexa or another member of our Estate Planning, Estate Administration, and Probate practice group.

ABOUT THE AUTHOR

Garrett J. Olexa | Read Bio