For asset protection, it’s going to require something called an Asset Protection Trust. Ensuring that your assets go where you want them to go is the nature of “Estate Planning.” Regardless of how much you have when you begin planning, you’re going to have what you have when you die. Still, whether it’s personal possessions, money, maybe your house, vehicles, those need to go somewhere. If you don’t make plans, there are statutes in the law that will decide, but it’s very possible that they’re not going to give them away in the way you had hoped.
By spending a relatively small amount of money, you can do this. It’s sort of like buying life insurance to protect your loved ones if something were to happen to you unexpectedly. One of the first things we discuss is who will be responsible for managing the gathering up of assets, paying off debts, and making sure things are correctly distributed. In a will, in Arizona, we call that a personal representative, and in a trust, we call that a trustee or a successor trustee.
As I alluded to earlier, the next thing we decide is whether you have any special gifts that you want to give, a percentage of your estate or a dollar amount to a person or an organization, maybe a charity or your church. And after that, the rest of your estate, do you want to divide it equally among your children or someone else?; and do you want them to get it immediately or do you want to distribute this to them over time?
What Is A Will, And Do I Need Both A Will And A Trust?
A will is the fundamental foundation of estate planning. If nothing else, everyone should have a will. Quite honestly, any adult, 18 years or older, should have a will. You may think, “Well, I don’t have anything,” but the odds are you are going to have something eventually. You may say, “Well, maybe I’m single right now in my 20s, shouldn’t I wait until I’m married, I have a house, I have kids, and settle down?”, That’s possible. You can always do a new will or amend it as your life situation changes. So it’s just a good idea to get it done because again, if you don’t, and then something unexpected happens, you could die without any estate plan at all.
Wills have been around since time immemorial in many forms. But, if you do get a living trust, you also get a will, but it’s a specialized kind. It’s called a Pour-Over Will, and it helps take care of assets you might have forgotten to put into the trust during your lifetime.
How Can I Plan For A Potential Or Possible Incapacity During My Lifetime? What Estate Planning Tools Or Documents Would Be Necessary?
You can plan for potential incapacity using the three powers of attorney: financial, medical, and mental health. So on those, sometimes people misunderstand them, and they think you can use those after somebody has died. That’s not true. They’re only effective when somebody is alive, so let’s start with the financial. You can give somebody a financial power of attorney to handle your legal affairs, financial, banking, and investments. You can provide that to them and make it effective immediately and not require that you be mentally incapacitated. So sometimes, people do that.
It’s imperative to name more than one person because that person may not be available when this incapacity happens. The second one is the physical healthcare power of attorney, “If something happens to me, maybe I’m in a terrible car accident, I’m in a hospital, there’s an emergency, decisions have to be made about surgeries and whether we’re going to withdraw life support and let the person just die naturally.” So again, you want to name more than one person for that.
Then, the third one is the mental healthcare power of attorney. If I’m declared incompetent, here are the people I name to make mental healthcare decisions, medications, even admitting me to a facility if needed. If you don’t have any of these, your family and loved ones may have to get a conservatorship and guardianship over you and your assets, and that is a significant undertaking. They cost thousands of dollars and are almost a mini-trial. You have to have medical professionals and family come in as witnesses, which can all be avoided with these very inexpensive powers of attorney.
For more information on Estate Planning Law In Arizona, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (623) 526-5597 today.