Trusts & Wills 101: Your Essential Arizona And California Estate Planning Documents

An estate plan is put together to ensure that your wishes are respected after you die, and that your affairs, estate, and legacy are protected and passed on to those you wish. The truth is, however, the strongest estate plans are not built from wishes; they are carefully constructed with a series of vital legal documents and tools. This article will introduce you to:

• The two key components every estate plan should have in Arizona or California.
• A list of financial and medical documents you should include in your estate plan, and why.
• Instructions for how and when to update and change your estate planning documents, for example as your children age.

What Are The Key Documents That Form The Backbone Of A Proper Estate Plan?

If an estate plan can be compared to a building, then there are two things every building needs. Walls, and a roof. These are the core elements that make it viable as a protection from the elements and give it shape and purpose. The same is true of an estate plan, except its two key components are a trust and a will.

What Is The Purpose Of A Trust In Estate Planning?

If there is one document every estate plan ought to be built around, it is the trust. This is because it fulfills the fundamental purpose of avoiding probate by providing the key mechanism for doing so.

Probate court requires any assets still held in your name to be retitled when you die. This is the only legal method for passing on property or assets held exclusively in your name to your heirs when you are no longer around to do so.

A trust, however, allows you to handle things differently. Once you establish a trust, you “fund” it by retitling assets from your possession to that of the trust. This means that when you die, those assets are not held in your name but in the name of the trust. Therefore, they do not have to be retitled and do not have to go through probate.

These assets are in the name of the trust, and the trust document gives the successor trustee you chose the power to distribute those assets according to the wishes you set up in the trust.

Thus, like walls for a building, the trust fulfills that core principle of holding up the building and protecting what is put inside it. Like those walls, one or more trusts can be set up as intricately and extensively as you need. They might prove insufficient, however, without a solid roof above.

What Is The Purpose Of A Pour Over Will In Estate Planning For Arizona Or California?

In addition to the walls that structure and support your estate plan, the trust, you will want a roof to catch any unexpected extra factors. At its heart, a pour-over will is just a regular will, which might seem redundant if you have a trust. In some ways it is redundant, but it adds additional utility and protection in two important ways.

First, if you have minor children, their guardians still have to be approved by the court if you die. The pour-over will include your nomination for their guardians, which a judge will consider and almost always follow.

Second, the pour-over will act as a catch-all for any assets that somehow did not make it into the trust. It might say you set up the trust 20 years ago and that any assets not in it should be considered to be in it. The judge will most often respect that and follow it, ensuring that any left-over assets that did not make it into the trust are placed in it and do not have to go through probate.

Together, these two key documents make up the structure and fulfill the primary purpose of strong estate planning. Yet, as a house would be empty without additional furnishings, appliances, and decorations, so too can your estate plan be improved and cover so much more with additional important documents.

What Additional Documents Should Be Included In My Estate Plan?

In addition to your trust and your will, there are a number of essential documents that every estate plan should include.

• Powers of attorney:
  • Financial power of attorney
    • This gives someone the ability to make financial decisions and transactions on your behalf.
  • Healthcare power of attorney
    • This empowers the designated person(s) to make healthcare decisions for you if you cannot.
  • A certificate of trust you can show to your bank or other financial institutions without them seeing your whole trust.
  • A personal memorandum to keep track of your personal property and how you want it distributed.
  • A living will where you can designate your preferences for life-sustaining care through artificial means such as a ventilator, feeding tube, etc.

What Medical Documents Should Everyone Consider Having In Place? Should They Die Or Become Incapacitated?

The healthcare power of attorney and the living will are two key healthcare documents already mentioned above. Both of these tools serve to either express your preferences or entrust someone with the power to make decisions for you.

In addition to these core estate planning documents, you should also consider including HIPAA waivers for your close family members and loved ones – and especially for anyone who you want to be making healthcare decisions on your behalf. These documents allow doctors to share confidential and privileged healthcare information with those specifically designated individuals.

Attorney W. Scott Lawler is an attentive lawyer based in Arizona and California, whose practice combines business guidance with estate planning services. He believes strongly that no business or legacy is stronger than the legal documents at their foundation, and wants to make sure everyone is building on the best.

If your estate plan is still missing key documents or needs to be updated to reflect some major life changes, contact The Lawler Group today to schedule an initial consultation.

Are Estate Planning Documents Just For Older Adults, Or Should Adult Children Also Have Them?

Anyone can benefit from estate planning – even young adults. While we would like to imagine that our children will never experience harm, sentiment alone will not protect us should tragedy arise. As soon as children turn 18, whether they are staying at home or heading off to college, it is a good idea to get basic estate planning measures set up for them. If nothing else, this will offer considerable peace of mind just knowing that if you ever do need them, they are prepared.

What Planning Documents Do Parents Need To Protect And Provide For Their Minor Children?

Children who are still minors will also benefit from your estate planning. By placing your assets into a trust, you ensure that if anything happens to you, whoever you name as your successor trustee or trustees will have access to those assets and will use them to help take care of your children and their needs.

At the same time, your will can indicate who should be their guardian. The combination of both estate planning documents ensures that your children will be cared for according to your preferences and with all the resources you have been able to leave behind for them.

Should Estate Planning Documents Be Amended As Minor Children Age Up And Eventually Into Young Adulthood?

Just as the walls and roof of your home may need renovation and repair, your estate planning documents will benefit from regular review and updates.

A trust is the main thing that needs attention as you continue to add new assets or change how you want them distributed. A pour-over will, on the other hand, doesn’t necessarily have to be amended just because your minor children have grown up.

Both, however, should be looked at on an annual basis. For example, people you have named in the past as guardians may not be around or may no longer be your top choice, perhaps because a couple divorced or moved away. These updates are important, but they are not exactly based on the age of your children.

Similarly, you may want to make changes or amendments to your distribution choices in your trust. As your children age, they can become more responsible – or you may find them making questionable choices. For example, if your child marries someone that you do not think is very financially responsible, you may want to change your estate plan to provide extra protections to your family.

Of course, it can be tough to remember when all these updates may be required, but there is a simple way to make sure you never forget…

How Often Should We Review Our Estate Planning Documents?

You will never miss an important update if you review your documents every year. This is what we offer as a part of our client care program – but this review doesn’t have to be limited to your attorneys.

Often, an estate plan review can also include your tax accountant, financial advisor, and even your insurance agent so that everyone can be on the same page when it comes to adapting to changes. For example, maybe your life insurance agent made some changes that your financial advisor or attorney should take into account. Thus, a yearly review, (and preferably a comprehensive one), is always a good idea.

Another approach that can be used in lieu of, or in addition to, yearly review is to update and review whenever significant events occur. These could include any marriage or divorce, deaths, or the birth or adoption of other children, all of which are likely to require amendments or modifications.

Similarly, financial changes such as the purchase of a home or the start of a new business can warrant changes. Finally, any time your thoughts or preferences about the distribution of your assets change, it is worth looking at the estate plan with your attorney.

For more information on Essential Estate Planning Documents, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (480) 339-0181 today.