An effective estate plan uses a collection of documents and teamwork to protect one’s assets and personal property. An effective estate plan also explains and carries intentions of how to pass control down to successors in the event of your absence. An estate plan usually includes a will, a financial power of attorney, a medical power of attorney (with HIPAA consent), a living will, a living trust, and professionals who understand the importance of teamwork. When establishing a living trust, medical power of attorney and other estate planning documents, it is important to remember that the strategies you make in creating these documents are just as important as creating the documents in the first place. See Strategic Estate Planning for more information on how to apply expert methods to achieve your goals.
Estate Planning for Sierra Vista Residents
There are many significant benefits to establishing an effective estate plan. If a client wants to decide who inherits specific assets, possessions, or valuables, they need estate planning. Estate planning also allows parents to name guardians for their children, if the parents pass away before the children reach adulthood. Because of this, estate planning minimizes chances of family strife and unnecessary legal expenses and retainer fees.
Designating beneficiaries is a major component to estate planning. Assets could range from a car to a stock portfolio or even a vacation home. Without an estate plan, the selected heirs will have to navigate through a very stressful court process, called probate, that can take years. These heirs will rack up unnecessary legal fees so the courts can decide who receives specific assets. The court process is in place because the courts do not know which heir is most responsible and who should not receive free access to cash for various reasons. The courts will not automatically rule that a surviving spouse receive everything in the estate. To avoid the court process, it is vital that you and your loved ones have an effective estate plan.
Estate planning also protects young children. You can ensure that a child under the age of 18, is cared for in a manner of which you approve by designating a guardian, should one predecease their age of adulthood. Without a will, or living trust, the courts would step in to decide who will care for your children. This court procedure is called a “Conservatorship of a minor” or “Guardianship of a minor” and typically is a very expensive and complicated process. For these reasons, many professionals would recommend that having an estate plan is more necessary when a client has at least one child under the age of 18.
To think that family members will all get along and not argue at the time of a death is inappropriate. Stopping fights before they start is an important reason why an estate plan is necessary. One sibling may think that because of their contributions, they deserve more than the next sibling. Another sibling may think that the other sibling has a weak approach to controlling finances. These disagreements can easily end up in court, placing family members against each other and driving up legal fees.
With an effective estate plan, you can ensure that your assets are handled the way you intended if you were to become mentally incapacitated or die. With an estate plan one can choose who is in charge of your medical affairs, financial affairs and even specific assets such as a small business. An effective estate plan will also help you make individualized plans to care for a specific child with health problems or set up a different trust for one who may have troubles with maintaining a steady financial situation.
Sierra Vista Small Business Owners Need an Estate Plan
Estate planning is critical if you have a small business because a lot of things cannot go the way you intended if you do not take any action. Who dictates where a business goes? If a business owner does not have an estate plan in place, then state law would determine who is in control of the business. A living trust, along with many other benefits, would determine who is in control of a business if the owner should pass away. One of the most important questions that a small business owner can ask is: who oversees the business if I were incapacitated or deceased? A spouse may not be the most fit individual to take the responsibility of running the business. It may be a colleague, friend, or key employee at the company that could help keep the business running while you are not around. The person who inherits the business or oversees the estate can more than likely sell the business if they are not capable of running it. Sometimes, if the business has another owner, the surviving owner can buy out the deceased owner by paying the estate. There are plenty of ways to either sell or distribute the business. A key role in determining the best strategy is whether the business is likely to continue after the death of the owner. However, an estate plan is necessary for any control to pass smoothly between the deceased business owner and their successors.
For more information on your estate planning strategy and a Free Consultation, please contact us by clicking the button below, or by calling (520) 797-1400.
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