by Arlene Rheinfelder, EA, AZCDLP, Prescott Tax & Paralegal
Green thumbs are itching for gardening projects, flowers to brighten the winter blahs, and we’re all opening windows for fresh air and bird songs. Spring is the season of renewal and projects. In our area, it is also the time to prepare for wildland fire season by creating defensible space. This type of preparation can make the difference in whether your home survives a fire.
Preparing an estate plan is like creating defensible space. Through simple advance preparation, an estate plan can avoid exorbitant costs of probate and ensure a seamless transition. An estate plan typically consists of powers of attorney, a will, an advanced health-care directive and sometimes a trust. Other documents may include a beneficiary deed or documents to transfer property to a trust.
There are some simple things that can be done to avoid probate, such as naming a transfer on death beneficiary on a bank account and recording a beneficiary deed to transfer real estate upon death. Another option is creating a trust, which holds your assets and states how to distribute assets upon death.
Reviewing your estate-planning documents is like planting fresh flowers in your garden. Make sure that your documents are still consistent with your wishes. Uncle John, who was in charge, may have left the country. There may be grandchildren for whom you would like to establish an educational trust fund. Making necessary changes keeps your estate plan fresh.
Without an estate plan, Arizona laws will dictate who will receive your assets, and it often requires an expensive probate to transfer assets. Without powers of attorney, if one becomes unable to make decisions, obtaining a costly, cumbersome guardianship or conservatorship becomes the solution.
Just as with creating defensible space, a little advance preparation can give you peace of mind and reduce costs in case of a catastrophic event. While you are preparing your spring projects, consider one more: reviewing or preparing an estate plan.