16 Oct When to Start Estate Planning—Why You Shouldn’t Wait
Estate planning is a sensitive matter that many people avoid, especially if they’re young. But don’t assume that you won’t have to worry about it until the distant future—adults of all ages can benefit from estate planning. A thorough estate plan ensures financial security and that your assets are distributed according to your wishes. Let’s take a look at when to start estate planning, and why you shouldn’t put it off.
When Should You Start Estate Planning?
It’s never too early to start estate planning. Although the need for an estate plan feels more urgent as you grow older, tragedy can strike at any moment. If you pass away without a will, the court will decide who gets your assets, no matter what your wishes are. And an incomplete or invalid will can mean that your loved ones have to go through a lengthy and expensive probate process.
Eight Reasons Why You Shouldn’t Put Off Estate Planning
There are many reasons why people procrastinate when estate planning. Maybe they think that they’re too young, or that they’re not wealthy enough, or that it’s not necessary because they don’t have any children. But no matter your circumstances, there are many reasons why you should start estate planning early instead of making excuses for putting it off.
1: Life Is Unpredictable
Young adults tend to put off estate planning because they assume they won’t need to do it until they’re much older. But life is uncertain, and you don’t want to leave your assets vulnerable. Getting started on estate planning early in life ensures that your wishes are followed in any situation, whether it’s the type of medical care you want to receive or who you want to take care of your pets.
2: Protecting Your Loved Ones
Estate planning isn’t just about your needs, it’s also about safeguarding the future of your loved ones. If you have a family that depends on you, having an estate plan ensures that they will be cared for financially in your absence. Putting off estate planning only puts their financial security at risk.
3: Avoiding Probate
Probate is the legal process of verifying your will and distributing your assets. This process is long and expensive, and it can be a major burden for your loved ones during an already challenging time. Placing your assets in a trust keeps them out of probate and ensures that your beneficiaries receive their inheritances promptly.
4: Tax Planning
Luckily, Arizona doesn’t impose estate or inheritance taxes. But if you have a particularly large estate, you will still need to prepare for the federal estate tax. Estates valued at $12.92 million or more during the 2023 tax year are subject to the federal estate tax. Putting your assets in an irrevocable trust can help reduce the size of your taxable estate, thus reducing the taxes.
5: Protecting Your Business Interests
If you have a business, an estate plan is crucial in ensuring a smooth transition of ownership. You can transfer your share of the business to your family members or partners through a will or a living trust. Estate planning can also help you structure your business as an LLC in order to protect your personal assets in case your business ever gets sued.
6: Healthcare Decisions
Estate planning isn’t just about what happens after you pass away. It can also help protect you during your lifetime if you become incapacitated. Whether you get diagnosed with a progressive disease or are seriously injured in an accident, it’s important to have advance directives in place so that your medical care aligns with your wishes. For instance, a power of attorney can make important medical decisions on your behalf, and a living will ensures that your medical preferences are honored.
7: Avoiding Family Conflict
Settling your estate can be an emotionally charged time for your loved ones. If you pass away without an estate plan in place, they’ll only be able to guess at what your intentions were, no matter how well they knew you. Laying out clear plans and explaining your wishes helps prevent confusion and disputes over inheritance.
When Is the Best Time to Start Estate Planning?
As soon as possible! But estate planning is especially crucial after certain major life events. Major milestones like becoming a parent or a homeowner are often a good reminder to meet with an estate planning attorney.
When You Become a Homeowner
Owning your first home is an exciting milestone, and it’s a significant financial investment as well. Putting your home in a trust is a great way to protect your investment for the future. You can ensure your property avoids probate, and that the house is properly maintained if you ever become incapacitated.
After a Marriage or Divorce
Arizona is a community property state. That means any assets you acquire during your marriage are jointly owned. Your spouse is automatically entitled to half of these assets if you pass away or get divorced, even if your name is the only one on the title. An estate plan can help you ensure that your half ends up in the right hands.
When You Become a Parent
Whether you give birth, adopt, or become a step-parent, you need to create an estate plan to secure your child’s future. For instance, you’ll need to name a guardian for your minor children, just in case something happens to both of their parents. And with a living trust, you can leave an inheritance that will be paid in installments after they turn eighteen.
Estate planning is especially important with stepchildren, as they are not considered heirs by the court. If you want your stepchildren to inherit any of your assets, you must specifically name them as beneficiaries in your will or trust.
Before You Retire
Creating an estate plan can help you enjoy a worry-free retirement. It allows you to rest assured that your retirement accounts, pension plans, and other important assets are safe and aligned with your financial goals. It also gives you peace of mind that your loved ones will be provided for after you’re gone.
Estate Planning Services In Glendale, Arizona
Don’t put it off until it’s too late—the Phelps LaClair team can help you through the emotional process of securing your estate. We’ve been helping Arizonans of all ages with estate planning for over 40 years. Whether you need help creating a will, a trust, advance directives, or even an LLC, we’re here for you. Give us a call at 480-892-2488 today to schedule a free consultation in Glendale, Scottsdale, Mesa, or Chandler.