Do I Have to Be Wealthy to Have an Estate Plan?

It is a common misconception that estate plans are only for the wealthy. No matter what your net worth is, you should have an estate plan.

What is an Estate Plan?

An estate plan is a series of documents that allow you to leave important instructions about what should happen to your property, children, and health care if you die or become incapacitated. Standard documents included in a Phoenix estate plan are a last will and testament, revocable living trust, health care power of attorney, durable power of attorney, and living will.  

Estate planning is not one-size-fits-all. Each document is customized to the individual client. What the document will look like depends on the client’s goals and unique situation. For example, what is included in the estate plan will vary depending on whether the client:

• Is an individual,
• Is married,
• Is part of a blended family,
• Has adult children,
• Has minor children, or
• Has grandchildren.

Why Do I Need an Estate Plan If I Am Not Rich?

Everyone should have an estate plan in Phoenix. It does not matter how much property you own or how old you are. Below are five reasons to create an estate plan regardless of your wealth, health, or age.

1. You are planning for more than your death. Estate planning covers more than just who gets your property when you die. It also plans for incapacity through the use of trusts, powers of attorney, and living wills. No matter your wealth, these tools are critical for your family to have in the event you are incapacitated and cannot make decisions for yours. With a durable power of attorney, you can appoint an agent to handle financial matters on your behalf, such as filing taxes, paying bills, and selling property. In a healthcare power of attorney, you can appoint someone to make medical decisions for you. Through a living will, you communicate your end-of-life-care decisions.

• You can name a guardian for minor children. In a will, you can designate a guardian for your minor children. You can pick someone who you trust and who has the same family values. If you do not have a will, a judge will decide the guardian for your children. This is one of the most important decisions you make; you do not want it left up to the court.

• You can decide what happens to your property. Through a will or trust, you can decide to whom and how your property is distributed when you die. It is important to make these decisions no matter how large of an estate you have. It is also important to consider sentimental assets that may not have a high financial value.

If you die without an estate plan, Arizona intestacy laws will govern what happens to your property. Your spouse or closest relatives do not decide how it is distributed. The intestacy laws often differ from what you would have wanted, especially if you are part of a blended family or have children or parents with special needs.

• Avoiding or minimizing probate. If you die in Phoenix without an estate plan, your assets will go through probate. Probate is the court process of administering a person’s estate. There are many negatives of probate. First, it is expensive. Your heirs will have to pay court costs, attorney’s fees, accounting fees, and appraisal fees. Probate also takes from months to years to complete. It will be a long time before your family sees their inheritance. Probate is also public. Anyone can go to the courthouse and request the records.

There are many estate planning tools, such as trusts and beneficiary accounts, that you can use to avoid or minimize probate.

• It allows your family to focus on grieving. An estate plan is an amazing gift to leave to your family. Instead of trying to figure out what you would have wanted and dealing with logistics, your family will be able to focus on grieving and celebrating your life. Additionally, estate planning significantly reduces the risk of family conflicts. If you have clearly communicated your wishes, your family is less likely to fight over your property.   

Your Phoenix Estate Planning Attorney

Nicole Pavlik is an experienced Phoenix estate planning attorney who can help you create a comprehensive estate plan. If you have questions about estate planning, call Nicole Pavlik Law Firm today at (602) 635-6176 for a free consultation.