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Ring in the New Year with an Estate Plan

January 30, 2024 | 3 min read

Ambitious fitness and savings targets often dominate New Year’s resolution lists. Common New Year's resolutions involve health and fitness or saving more money, but what about safeguarding your financial assets? In the event that something happens to you, ensure your loved ones are cared for with a comprehensive estate plan.

Here's why creating an estate plan is a great addition to your New Year’s resolutions list.

What is an estate plan?

An estate plan provides a blueprint for peace of mind. It contains legal documents that declare how you want your assets distributed while preserving certain aspects of the estate in the event of your death or incapacitation. Documents often include a trust, will, power of attorney and a medical directive that clarifies your desires.

Why Consider Estate Planning

A severe illness, accident or other sudden event could make it difficult for your loved ones to make healthcare decisions and take care of your finances.  Without an estate plan, your family may have to deal with legal issues, tax liabilities and a host of other difficult situations. An estate plan can provide clear instructions on what to do and when.

Basics of Estate Planning

While creating an estate plan can seem intimidating, there are only a few basic terms to understand as you begin the process (and an estate planning specialist can explain any others that come up).

  • Last Will & Testament – A document that outlines how property and assets should be disbursed after death. It can nominate legal guardians for minor children and may include instructions for funeral arrangements.
  • Living Will – This legal document outlines an individual’s desired limits of life-sustaining medical treatment should they be unable to communicate or make such decisions.
  • Trust – This legal agreement appoints a third party you choose to control and manage assets for your beneficiaries. For example, you might delay the distribution of an inheritance for a nephew until they turn 30 years old.
  • Executor/Personal Representative – The individual responsible for carrying out the wishes expressed in the deceased person’s will. They are responsible for ensuring debts and taxes are paid from the estate, beneficiaries receive assets and other estate management obligations are fulfilled.
  • Power of Attorney (Financial and Healthcare) – This document gives the person you choose the legal authority to act on your behalf while you are still living.

A qualified estate planning specialist can answer questions about how each legal document would apply to your situation. They may also introduce you to other documents to help you understand your planning options.

Common Estate Planning Mistakes

Prioritizing an estate plan in the new year is a smart move, but jumping in without considering your goals isn’t. Avoid these common pitfalls so you can ensure your estate plan does what you need it to.

  • Waiting for the “perfect time” to create an estate plan. It’s never too early to get started. If you pass away without an estate plan, the state may decide how your property and assets are distributed.
  • Not updating your estate plan. The plan you implement today may not always be relevant. Divorce, remarriage, adoptions and births are a few events that should trigger a plan review. You may need to update beneficiaries, nominate different legal guardians, or make other changes throughout your lifetime.
  • Taking action after you set up your plan. Preparing a will or trust is just the start.  After your plan is in place, you will need to visit each financial institution or investment company to ensure your plan is coordinated. Preparing deeds for your real estate is also an important step to complete.

Estate Planning Essentials for the New Year

Start the New Year off right bye taking action to ease the future for your loved ones by creating a comprehensive estate plan. Start by gathering key financial documents that will help you formulate a plan. Some may include:

  • Bank statements
  • Insurance policies
  • Real estate deeds
  • Business organization documents
  • Investment account statements
  • Funeral and burial pre-arrangement records

Protect your legacy with the help of an experienced Desert Financial estate planning specialist. They can provide valuable education and insights about legal documents contained in an estate plan. Learn more when you schedule an appointment or register for a free online or in-person educational workshop today!

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The material presented here is for educational purposes only and is not intended to be used as financial, investment or legal advice. 

Document preparation services are offered through Desert Financial Credit Union; an Arizona Supreme Court Certified Legal Document Preparation Business Entity (CLDP #81024). Legal document preparation services are not insured by the NCUA, have no credit union guarantee, and do not provide legal advice. 

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