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7 steps to create a successful estate plan

A file folder with "Estate Plan" written on a green tab

The basic elements of an estate plan are cut-and-dried. Beneath the surface, though, are issues that catch many people by surprise.

Here are steps you can take when creating an estate plan to avoid some of the most common pitfalls.

Is your family ready?

You need a complete estate plan, one that includes a will, living trust, power of attorney, advance medical directive, and other documents. But even people who normally remember to dot all their i’s and cross all their t’s can overlook something just as important – the human side of the equation.

Here are 7 tips to help.

1. Make sure the next generation is prepared

Often, an estate plan fails because the younger generation is not ready. They waste the assets that they inherit. They make bad investments. Or they indulge in a lifestyle that invites personal ruin. You can avoid these financial hazards by establishing trusts that give your children limited access to their inheritances. Even better, though, is educating them about sudden wealth, whether it’s millions or thousands of dollars.

2. Expect family disputes

You also need to acknowledge that family conflicts sometimes are inevitable. Don’t make the situation worse with vague instructions. Your estate plan should take into account all possibilities. Do not leave decisions in the hands of your children, who may have widely different opinions on financial matters. One classic mistake is having children jointly inherit property or a business, which can lead to serious problems.

3. Have a plan for making gifts

You can help prepare your family with a plan that provides suitable gifts. Property gifts, for example, are often better than cash, which can be spent quickly and unwisely. It’s also important to take tax consequences into consideration.

4. Take time to understand your estate plan

Surprisingly, few people understand their own estate plans. Ask questions. Take notes. Do research. If you cannot explain your own plan to someone in clear terms, that’s a problem.

5. Make it easy on your executor

Make the job of your estate’s executor easier by preparing details about your estate. Make sure that written, complete records of all assets are readily available.

6. Have a plan in place for your business

Just like you plan for your family, plan for your business. Who will operate it? Who will own it? Will it be sold? Sadly, few businesses survive a second generation of owners because the original owners did not have a clear succession plan.

7. Put assets in a living trust

Strongly consider funding a revocable living trust. One of the most overlooked aspects of estate plans is the failure to transfer the legal ownership of assets – real estate, vehicles, etc. – to the trust. When this happens, assets go through probate, which can be a timely and costly process for your heirs.

Plan now with help from an estate attorney … and relax

Needless to say, making an estate plan is a nerve-racking process. You have to take into account your current finances while keeping an eye on the future. You have to take into account Arizona’s complex laws. Hardest of all, you have to account for emotions. You are facing your own mortality, which is never easy.

Discussing financial matters with your family can make it more difficult and cause hard feelings. Even if you have the best of intentions, an innocent mistake can leave your heirs with a legal mess that takes years to untangle – not the legacy you want to leave behind for your loved ones.

The estate planning attorneys at The Law Firm of Brown & Jensen have been helping clients just like you in Mesa, Tucson, Scottsdale, Chandler, Peoria, Goodyear, Payson, Show Low, and throughout Arizona since 2014.

We know what you are going through. We have the experience and sense of commitment to help develop a solid estate plan for you and your family. Contact us today for a free consultation to find out how we can help you reach your longterm goals.

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