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What is the Difference Between a Will and Estate Planning?

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Do You Need to Prepare a Will or an Estate Plan?

Many people confuse writing a will with planning an estate. After all, a will is a legal document that indicates how your estate will be divided and distributed at the time of your death, and you’ll need an Arizona estate planning lawyer to help you prepare a will or set up an estate plan.

However, a will is only one of the legal documents in a comprehensive and effective estate plan. Your estate plan not only indicates how your estate is to be divided and distributed; it should also protect your assets, and it should provide financial security to your family for years to come.

No one can know what may happen tomorrow. If you do not have a last will and testament, the time to prepare one is now. If you own a home in Arizona, have a family, or own significant assets and properties, you should also prepare a comprehensive estate plan as quickly as possible.

What is the Purpose of a Will or an Estate Plan?

Your last will and testament determines what will happen to your property and assets upon your death. An estate plan usually includes a will, but your plan may also include additional legal documents that protect your family and estate after your death or if you become incapacitated.

Your estate plan helps your loved ones manage your medical care and financial affairs. If you have a family member with special needs, your estate plan should also include provisions for that person’s financial support and care after your death or if you become incapacitated.

Additionally, your estate plan may reduce any estate taxes that your estate may owe, and it should also allow your loved ones to avoid a costly and time-consuming probate proceeding.

What Should You Know About Wills in Arizona?

A will is the central document in most comprehensive estate plans. It includes your instructions for distributing your property after your death, and it names the person who will care for your minor children. Parties that you name in your will to receive your assets are your “beneficiaries.”

Your will should include instructions for your estate’s executor or the personal representative who administers your estate. The executor you name should be a person you trust to honor your instructions and manage your assets until those assets are distributed to your beneficiaries.

An Arizona probate court will supervise your estate’s executor to ensure that your instructions are obeyed and your wishes are honored. If your will is handwritten, Arizona law does not require witness signatures, but if your will is typed, the signatures of two witnesses are required.

What Constitutes Your Estate?

Most people know that what you leave behind upon your death is called your “estate,” but exactly what constitutes your estate? Basically, your estate is everything you own, including but not limited to your:

  1.  savings and checking accounts
  2.  investments, your home, and your other properties
  3.  vehicles and your other personal possessions

If you’re not sure whether something is part of your estate, your Arizona estate planning attorney will tell you. If your debts exceed your estate’s value, no assets will remain for your loved ones. However, relatives are not usually responsible for someone’s outstanding debts.

What Are Trusts?

Trusts are often used in estate plans along with – or sometimes, instead of – wills. A trust can reduce the estate taxes, allow your loved ones to avoid the cost of a probate proceeding, and indicate how your assets are to be distributed to your beneficiaries.

Moving your assets into a trust reduces your estate and its tax burden. Furthermore, unlike a will, a trust protects your privacy because it does not enter the public record as a will does during the probate process. Your Arizona estate planning lawyer can prepare the trust that’s right for you.

What Else Should Your Estate Plan Include?

A comprehensive plan should include a will and/or a trust, medical and financial powers of attorney, beneficiary designations, and a letter of intent. A financial power of attorney gives someone you name as your agent the authority to make your financial and legal decisions when you cannot make those decisions yourself due to disability or incapacitation.

A medical power of attorney gives the individual you’ve named as your agent the authority to make your medical decisions if you are incapacitated. The document may also address your end-of-life medical treatment and care.

Your life insurance and your bank and brokerage accounts are transferred to your designated beneficiaries upon your death – whether or not you have a will or a trust – but if you don’t name beneficiaries, a court may decide the fate of your financial accounts and life insurance policy.

A letter of intent isn’t a legal document. However, you may leave a letter of intent for your will’s executor or your trust’s trustee to explain how that person should handle particular assets. A letter of intent may also leave detailed instructions for your funeral arrangements.

What Should an Estate Plan Accomplish?

A comprehensive estate plan should protect the interests of your loved ones and express your desires and wishes for them after you’ve passed away. It’s important to work with your attorney to prepare an estate plan that won’t generate controversy and acrimony among your loved ones.

After your estate plan is in place, you can update or modify the plan whenever you need to. A marriage, a divorce, a relocation, or new tax laws may require you to revise your plan and bring it up-to-date.

Why Should Turner Law Firm Prepare Your Will or Estate Plan?

An Arizona estate planning attorney at Turner Law Firm will help you prepare a last will and testament or a comprehensive estate plan that will protect your assets, ensure your family’s financial security, and convey your instructions and wishes.

If your estate plan is already in place, an attorney at Turner Law Firm can review your plan to make sure that it is up-to-date, that it meets your needs, and that it complies with Arizona law. We serve clients in Mesa, Glendale, Phoenix, and throughout the greater Phoenix area.

Your first consultation with Turner Law Firm is provided with no cost or obligation. To find out more or to begin preparing your will or planning your estate, call Turner Law Firm promptly – at 480-618-1221 – to schedule your first estate planning consultation.

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