Consult with an estate planning attorney to understand what is the right estate planning process and strategy for you.
What do you know about Arizona estate planning laws? This guide can help you gain an understanding of everything you should know. Read now!
67% of all adults across the US admit they don't have any estate planning in place. Coming out of a pandemic, it's not to say they don't recognize the importance of doing some end-of-life planning.
Estate planning is often avoided because they think they have time or don't want to consider their own mortality. Some people might even say they don't think they need an estate plan because they don't have enough money to need one.
However, having a comprehensive estate plan is very essential for asset protection and helping your family members know where you want your belongings to go after your death. Going through the estate planning process can also help you understand what you need and what you don't.
If you live in Arizona and fall into this group of people, it's time to learn about some estate planning laws that might impact you and your family members.
If you're ready to get your affairs in order and do some estate planning, read on to learn more about estate planning in Arizona.
What Is Estate Planning?
Estate planning refers to a person's decisions related to their affairs, property, and assets for the end of their life or if they become incapacitated. In short terms, it is your end of life decisions. There is usually an estate planning process to help a person or family.
When you make an estate plan, you must decide about several things. This might include who you leave your assets to and caring for your minor children. You may want to minimize estate taxes and understand estate tax laws better.
Your estate planning can also include how you want investments handled in the future and your end-of-life wishes. A comprehensive estate plan will also talk to you about asset protection and estate administration.
Who Needs an Estate Plan?
Many people feel like they don't need an estate plan. Either they're young and think they have lots of time before death. Another belief is that they don't need estate planning because they aren't wealthy.
The reality is that once you become an adult, you should start an estate plan. You need an estate plan if you invest in buying a home, have children, or create a retirement account.
Having a last will and testament or a revocable living trust can help your family members in a crisis moment. It can not only save you money but more importantly time. You don't want to risk having minor children having no guardian or your life being on the line because you don't have a health care directive or health care power of attorney with an agent to make decisions for you. Health care directives are essential to save your family members a lot of stress.
Considerations for Estate Planning in Arizona
As you consider estate planning, there are some things to know about the laws in Arizona. Let's take a closer look at how Arizona estate planning laws related to your estate might impact you.
Avoiding Arizona Probate
An intestate estate is one where the person passes without a will. This means the estate must go to Arizona probate. In Title 14 of the Arizona Revised Statutes, the laws regarding probate are defined.
If you die and don't have a will that spells out how you want your affairs handled, the law requires it to go to probate, where the court will decide on your behalf. Even having a will doesn't avoid the probate process. Working with an estate planning attorney and having a comprehensive estate plan, with or without a revocable living trust, will help you avoid probate.
Property Laws to Know About in Arizona
Arizona is one of the states in the US that works as a community property state. This means that any property acquired during the marriage is considered community property.
A married person might also have separate property, which includes:
- Assets owned by a spouse before the marriage
- Property acquired by inheritance or gift during the marriage
- Property acquired after a legal separation
This becomes especially important when planning your estate because it will impact how the property is divided after. An estate planning attorney can help you create and fund a pre-marital revocable living trust to help you protect your assets against divorce.
You also want to ensure your assets have the proper distribution to the intended beneficiaries. Without a will or trust, you do not have control over your assets.
Spousal Community Share
Interestingly, you might be surprised to learn that Arizona makes it hard to leave a spouse out of your inheritance. Arizona classifies property as either community property or separate property.
If a spouse is left out of a will, according to Arizona law, that spouse can still seek up to 50% of both community and separate property from the estate. Speak to an estate planning attorney to understand your options. Having a comprehensive estate plan, specially if you have a blended family, is ex
Planning for Wealth Transfer
Part of estate planning involves accounting for all assets and thinking about how they will transfer to your heirs upon death.
Careful estate planning can help you with wealth transfer strategies, including:
- Gifting assets during life
- Setting up trusts
- Creating trusts and wills to provide for the distribution of assets
If you have investments or retirement savings, the type of account can impact how it transfers, so it's wise to work with an expert.
Just because Arizona doesn't charge estate taxes doesn't mean you don't want to plan and know about them. There are estate taxes from other states, and the federal government charges estate taxes. Also laws can change , adding tax planning to your estate planning process can help you minimize estate taxes in the future.
Depending on how they're structured, some investment accounts could be subject to taxes as well.
What Should You Include In Your Estate Planning?
As you consider your estate planning, knowing what to expect is reasonable. No two estate plans are exactly alike and may vary depending on how you structure them and what you want to have happen to your assets.
Working with an estate planning attorney to design a estate plan that is write for your family and assets is important. You don't want to work with a law firm that is not specialized in estate planning and understands the estate planning process and Arizona estate planning laws well.
Let's look at the most common components of a solid estate plan and what they accomplish for you.
Last Will and Testament
A will is a legal document written by a person that designates how your assets and property are distributed once you die.
A solid will can help avoid probate and guide your will's executor on how you want your affairs handled.
Most importantly, specially for families with minor children, a Will designates who will be the guardian of your children if something happens to you (and your spouse as well). You may want to use life insurance policies to fund a revocable living trust also to help future guardians take care of your minor children.
Some people choose to take a total pool of assets and put them into a trust. Often this is done to avoid probate and streamline the estate administration. There are many types of trusts, like a revocable living trust or irrevocable trust. An estate planning attorney can help decide which estate plan is best for your scenario.
The trust becomes its entity that will handle assets before and after your death. It is specially important to work with an attorney if you have business interests that will need to be addressed as part of your estate planning.
Included in most estates is paperwork designated as a power of attorney. This person can act on your behalf if you become incapacitated or when you die.
They deal with estate administration, making sure your assets go to the intended beneficiaries, and in worse cases, deal with your health and finances if you became incapacitaded.
End-of-Life and Medical Directives
Most estate plans include a living will, which provides directions about your preferences if you become ill and can't make medical decisions independently. They will help decide on medical treatment and medical care.
It also provides end-of-life directives. This means if you'd want extensive measures to keep you alive and whether you'd go on life support. Often you have your power of attorney with the authority to make those decisions on your behalf.
There are two main types of powers of attorney, a durable power of attorney, also know as a financial power of attorney, which takes care of financial decisions. And a health care power of attorney, which names agents to help you with health care decisions.
Meet With an Estate Planning Lawyer
The person who best knows and understands the intricacies of Arizona inheritance laws is an estate planning lawyer. They will get to know your unique wishes and assess your estate and other legal matters.
Then you can assemble the legal documents recognized in Arizona that will protect your interests and your family.
Understanding Estate Planning Laws in Arizona
Understanding estate planning laws brings you closer to creating an estate plan. This protects the assets you spend a lifetime building and makes it easier for your family once you're gone.
Estate planning can be a complex process, however, having an estate planning attorney who knows the legal procedure and laws associated is essential.
If you're ready to start your estate planning, we can help. Contact us today for your free consultation about your estate, click here or call (480) 565-8020. Citadel Law Firm will be pleased to help you.
It doesn't matter if your goal is to avoid probate, create a revocable living trust or make sure your children have a guardian. At our law firm we take into careful consideration your goals. As you go through the estate planning process our attorneys will help you create what is write for you. We have the legal experience to help you and your best interests in mind. We will help you protect your hard earned assets for your family members.