What Is An Estate Plan And Why Do I Need One?

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When you think of the most precious memories and treasured items of your loved ones, what comes to mind? Whether it was quality time spent with family members, the family farm, or a pocket watch of your great-great grandfather, passing along your most valuable items matters. Even if it might not feel like a top priority now, your loved ones will one day appreciate the effort made to receive your legacy. 

In simple terms, estate planning is a process that helps you organize your assets, protect them, and transfer them to your heirs. 

 

This involves crafting a will, trust, advance health care directive, and other legal documents before you pass, depending on your wishes – so don’t wait.

 

Tax planning saves headaches for your beneficiaries, so looking for help from a financial planner for estate planning in Bountiful, UT is key. At ARS, we are here to assist your entire family and other professionals involved in the process.

What is an estate plan?

Because no one is getting out alive, we can accept death in healthy ways by establishing what will be done with what you have when you depart. An estate is the total property, real and personal, that you own prior to its distribution through a will or trust. 

An estate plan is a compilation of all legal documents that involves your future, after you die. Your estate plan should be thoughtfully created while still healthy and thriving to help avoid family disputes during their time of grieving. Communication with family members will help this process, and we can support you with those initiatives.

The process of estate planning involves making decisions about your assets and liabilities, as well as what happens to them when you are no longer here. You can set up a will to distribute your property or create a living trust through which you can control who inherits your property after your death.

You may also want to consider other estate planning documents, such as powers of attorney and guardianship, that keep loved ones from going through probate court.

The components of an estate plan

Living Will and HealthCare POA

There are several other things to consider when putting together an estate plan. These include:

  • A will: this document states how you would like your assets divided and who will be responsible for carrying out your wishes after death.
  • A living will: also known as a healthcare directive or advance directive for health care, is a document that outlines whether or not you want to receive medical treatment in certain situations.
  • Power of attorney: allows someone else to act on your behalf if you become unable to make decisions on your own due to an illness or injury (as with many conditions such as Alzheimer’s disease).
  • Health care proxy: also known as a durable power of attorney for health care (DPOAHC), allows another person to make treatment decisions on behalf of someone who cannot communicate wishes because they are incapacitated by illness or injury (as with many conditions such as Alzheimer’s Disease). 

What is an advance health care directive in estate planning?

As mentioned above, an advance health care directive is a document that outlines your wishes for medical treatment if you become unable to communicate and make decisions for yourself. This contains instructions on what kinds of life-sustaining treatments you would accept or refuse if you are unable to speak for yourself. It also addresses where you want to be taken if an emergency arises, as well as who should make medical decisions in the event that someone else is not available or trustworthy.

It’s important for everyone to have an advance directive because it can prevent disputes between family members about whether treatment should be continued in certain situations. 

For example, suppose your spouse has Alzheimer’s disease and hasn’t been able to make financial plans since she started showing signs of memory loss several years ago. Now it has progressed so far that she can no longer remember her own name or recognize her children when they visit her at the nursing home or hospital where she lives now. 

If something happens while she’s hospitalized and unable to communicate with anyone – say a stroke causes paralysis on one side of her body – physicians will likely begin treating her without realizing she doesn’t want such treatment because it would still be possible for them not knowing this information!

We want to help you avoid such scenarios. A financial advisor in Bountiful, UT, will also help you keep these documents up-to-date as life changes.

The importance of estate planning

Last Will and testament document

Estate planning is vital to your legacy, your family, and the community because:

  • It gives you peace of mind
  • You can feel confident that your wishes will be fulfilled when you die
  • It can help minimize taxes for you and your heirs
  • Assets can be passed on without paying unnecessary estate taxes
  • Directing the distribution of assets can help reduce the amount that may have gone to probate court before distribution
  • It helps to prevent conflict between beneficiaries over dividing up property and other items left behind 

It’s our goal to alleviate all emotional distress. An estate planner with experience in these matters can assist with resolving disputes before they occur or become problematic. Relationships don’t need to be disrupted over disagreements about how wealth should be distributed or spent among surviving family members.

Who needs a will?

Every adult should have a will. If you have minor children, having a will can help ensure their well-being. In the event of your death, without one, your estate would be subject to the rules of intestacy (which varies by state). 

Under the Utah intestacy laws, all heirs must survive the decedent for at least 120 hours. Children born after the death of a parent may still inherit for as long as they also live for at least 120 hours. Legally-adopted children will hold the same right as biological children.”

If you have a spouse or partner who is not included in your will and they survive you by 48 hours or more than two years respectively, they are entitled to half of all assets not specifically left to someone else. 

What’s the difference between estate planning and legacy planning?

Legacy planning is a subset of estate planning. It pertains to what you want to leave behind, such as charitable donations and bequests for family members. Estate planning, on the other hand, concerns how you want your assets distributed when you die. If you’re looking for financial assistance with either legacy or estate plans, the ARS team has you covered.

Bottom line: don’t leave your wealth to the wind. We hope this helps to clarify the basics of estate planning and how important it is to craft an estate plan with a financial advisor. 

 

Give us a call to work with our Advanced Retirement Strategies (ARS) team for estate planning in Bountiful, Utah, with no strings attached!

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CERTIFIED FINANCIAL PLANNERS™ at Advanced Retirement Strategies

Working with a CERTIFIED FINANCIAL PLANNER™ is an excellent investment of your time and money. With the high standards for CFP® certification, you’ll know you’re getting the expertise and knowledge of a highly-trained and educated professional who will always act in your best interests and with the loftiest ethical standards. 

Our team of retirement planners and investment advisors in Bountiful, Utah specializes in helping diligent savers with $250,000 or more of investment and retirement assets (not counting your primary residence) prepare for and then transition into retirement. 

If you’re looking for a CFP® to help you live the retirement you have dreamed of, contact us now.

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