Why is a Will important? Poor planning can affect you and your family for years.
One would assume that if anyone has taken all necessary steps to protect their wealth, it would be the rich and famous. Someone like Prince who passed away in 2016, with much at stake such as property, money, royalty income and a treasure trove of unreleased music, should have had his affairs planned years, even decades ago. But Prince was just like many of us. All too often we procrastinate and assume there’s plenty of time left to plan for uncomfortable life events that seem far off in the future.
So what happens when no Will is in place? The next step is probate, which is a legal process that often takes considerable time and money. This process allows a court to gather a deceased person’s assets and distribute them according to the state law. This process, which varies from state to state, could take many months to finalize and reduce wealth substantially in the end. Plus, if you have specific wishes, you’re leaving the decisions about your property to the state.
Where to start when it comes to estate planning may seem overwhelming, but it’s really not. Beneficiary forms and transfer on death forms are important for bank and investment accounts, as well as for life insurance plans. It’s common for people to fill out beneficiaries for their accounts, then forget about who they’ve assigned for years, while life changes happen. So beneficiary designations should be revisited periodically, since these documents do override a Will. But these forms do not cover everything, as a Will covers much more.
A Will offers the ability to include or exclude children or family members, and to even make arrangements for pets. It provides the opportunity to gift money to friends or a church. A Will can even protect special needs family members and can make provisions for blended families or previous marriages. You may also specify who should receive specific material possessions, such as a piece of jewelry or even a car. However, there even more important documents that everyone should ideally have.
In addition to a Will, your plan should include a power of attorney, which appoints someone to take specific actions on your behalf. A durable power of attorney allows someone you appoint to continue handling your affairs and making decisions if you become incapacitated. Your plan should also include a health care power of attorney, which specifies your health care wishes in the event of a life changing situation or the end of life. Having a comprehensive estate plan in place is important for taxes and asset protection, and most importantly, to ensure you and your family members are taken care of.
It’s always a good idea to put these documents in place in times of health so that decisions are made clearly. It’s the role of your financial advisor to educate you and discuss the options that best suit your situation to help plan for the unexpected. It’s never too soon to make sure you have a solid estate plan in place. If you only have a Will, it’s not enough.
Would you like assistance with creating a Will or Estate Plan? Simply request a call from a Bayntree financial advisor today and we can help you determine your options.
Bayntree Wealth Advisors, located in Phoenix and Scottsdale, Arizona, provides comprehensive financial planning and wealth management. The Bayntree team specializes in all aspects of financial health, including retirement planning, risk management, investment advice, tax strategies, estate planning and insurance.
Bayntree does not provide specific legal or tax advice. Please consult with your tax advisor or legal professional for guidance with your individual situation.