Despite constant warnings from financial experts, many Arizona residents continue to underestimate the importance of an up-to-date estate plan. A recent survey found that over 50 percent of Americans do not even have a basic estate plan in place. Many of these people continue to believe that estate planning is a way to avoid taxes for those who are older and wealthy. Others refuse to think about the fact that we will all eventually face death. However, estate plans are essential for people of all ages and levels of wealth and require us to think about a variety of unlikely, and possibly depressing, scenarios.
The first step is often to create a living will to specify a medical care plan with regards to treatments such as resuscitation and ventilation. This lets doctors know how to proceed with your medical care if you are incapacitated or otherwise unable to express your wishes. Having a plan in place also takes the pressure off of your family, as they do not have to make such difficult decisions. You may also consider appointing a health care proxy to handle all matters relating to your health care.
In addition to specifying your medical treatment plan, you should also appoint someone as power of attorney to handle your finances if you become unable to do so. For many married couples, it is important to make sure that your spouse can act on your behalf, if necessary.
Next, you will need to draft a will. Young people may have trouble with this, as relationships change over time. But, it is important to remember that your will is never “set in stone” and that you have the power to change it over the course of your life. A will is important for both financial and non-financial reasons. For example, if you have children, you may use a will to appoint a trustworthy guardian to care for them if something happens to you. Trusts can also be useful to give your children access to your assets after they reach a specified age in the event of your death. A trustee can help manage the trust and make sure it reaches the appropriate parties at the appropriate times.
Estate planning may seem unnecessary, especially if you are younger and in good health. However, it is always better to have a plan in place than to be without one when the time comes.
Source: Forbes, “More Than Half Of Americans Don’t Have These Essential Estate Documents, Do You?,” Zach Conway, Jan. 26, 2018