estate planning basics

Estate Planning Basics

Estate planning is what you do to ensure that your wishes will be followed if you are incapacitated or you pass away. It accounts for how you want your assets distributed and what decisions are made for medical care or end of life. Phelps LaClair, serving Chandler, Mesa, Phoenix and Scottsdale has been in the estate planning business for forty years. We have helped thousands of families with bulletproof estate plans that avoid probate and see that your assets are properly passed on to your beneficiaries. Here are five things you need to do in preparation for creating an estate plan:

1. Inventory your assets.

People may think that estate planning is only for the very wealthy. The truth is, everyone can benefit from a solid estate plan. You can begin to estimate your wealth by listing both tangible and intangible assets. Tangible assets include things like homes, land or real estate, cars, boats and other vehicles, and collectible items such as memorabilia, antiques, and art. Other items such as furniture or unique personal possessions or collections are also tangible assets.

Intangible assets might include bank and money market accounts, investments, stocks and bonds, retirement plans and IRAs, insurances, and businesses that you own or in which you are a partner.

Once you know what assets you have, you need to estimate the value of each item. You will likely be surprised at how much the value of your assets actually is. There are some items that will have increased in value since you acquired them; other assets may have diminished in value. The present value is what you need to know, and for that, you may need the services of an appraiser.

2. Ensure your family is protected.

Whether you have great wealth or modest wealth, your family will usually be the benefactor of your estate. You will want to do as much as you can to protect your assets so that your family can receive the maximum benefit from the years you spend growing your wealth.

One of the first things to address is life insurance. Do you have enough life insurance coverage to ensure that your spouse can pay off the mortgage, that your children can go to university, and that your family has the financial resources to recover from your loss? If your lifestyle has required dual incomes, or if you have a special needs child, this question becomes even more important.

If you have minor children, your estate plan should also address your desires for guardianship in the case that both you and your spouse perish or become disabled at the same time. This will avoid the unnecessary expense and drama of a family custody battle in court.

It is also possible to include your desires for how your children are to be raised in your estate plan. There is no guarantee that a court-appointed guardian will share your values for how your children are to be brought up, even if the guardian is a family member.

3. Establish directives.

A medical care directive will state how you want to be taken care of in case you are unable to make those decisions or communicate them yourself. You can authorize someone via a medical power of attorney to make those decisions for you.

Likewise, a durable financial power of attorney is also advised so that your financial affairs can be kept in order if you are unable to do so. This would include managing your assets, paying your bills, and filing your taxes.

Powers of attorney can be limited if you so desire. There is no need to give a carte-blanche authority. How you want to structure the delegation of authority is totally up to you. This is one of the major advantages of estate plans, trusts and wills over probate—you get to say what, when, who, how, and how much.

4. List your beneficiaries.

This is where you determine who is going to get your stuff. Don’t take anything for granted. Each asset should be accounted for and designated to a single or several beneficiaries. It is also very important to keep this beneficiary list up to date. If an ex-spouse is not removed from the will or trust, it may cause serious problems if the will is contested. You should also name a backup beneficiary in case the primary beneficiary dies before you do.

5. Review.

Life is constantly changing. Your estate plan also needs to change to reflect the new directions your life has taken. You may have sold a home and bought a new one. You may have divorced and remarried, or perhaps you had the birth or the loss of a child. Maybe you changed jobs or retired. All of these life circumstances call for an update to your estate plan.


We are here to help you!

Whether you are drawing up a new estate plan or revising an old one, Phelps LaClair can help. The rules and regulations surrounding estate law are often complex and require specialized understanding. That’s where we come in. Call us for a free first consultation with no obligation. We can discuss your goals and your situation and move forward from there in creating an estate plan for you. There is nothing to lose and everything to gain!



Images used under creative commons license (Commerical Use) 03/16/2020  Image by Paul Brennan from Pixabay

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