The Importance of Estate Planning

Estrada Legal offers competitive pricing for Phoenix estate planning. The experienced lawyers of the firm are available 24 hours a day, 7 days a week to help with all the legal aspects of Trust and Will Administration. Estrada Legal feels that planning for the future is an important part of life and wants to make sure the proper loved ones in your life are taken care of in case anything should happen. Forbes Magazine recently wrote an article about a wealthy man in New York City who passed on without providing any estate planning before his death. Estrada Legal wanted to share this article with you today to illustrate the importance of estate planning for the future. The article also reveals some helpful tips for estate planning and why planning for life after death remains an important item to place on your to-do list.

N.Y. State Could Get $40 Million From Man Who Died Without A Will

Nearly 2.5 million Americans died last year, many without signing a will. One of them was apparently Roman Blum, a Holocaust survivor and New York real estate developer who was worth almost $40 million when he passed away in January 2012 at the age of 97. A worldwide search for heirs since then hasn’t turned up any living relatives. If, after three years, there’s still no sign of his doing any estate planning and no one comes forward to claim his assets, all that money will go to New York State, under a legal rule called escheat.

These are the estate planning lessons that emerge from between the lines:

1. Provide for loved ones. Even if Blum didn’t have any relatives, there still may have been people he cared about and wanted to benefit from. But unless his will or living trust turns up, there is no way for his wishes to be legally enforced.

2. Review beneficiary forms. It’s not clear from The Times article whether Blum had retirement accounts, but if he did he would have needed to make separate provisions for disposition of those assets. Retirement accounts are distributed according to beneficiary designation forms filed with the bank or financial institution (the custodian) holding your account. With an IRA, you can readily name any beneficiaries you want, including friends, family members, a trust or charity. For a 401(k) or other workplace plans, you must get your spouse’s written permission to leave it to anyone else. Make sure to name both primary and alternate beneficiaries, and keep the forms up to date.

3. Benefit charity. If Blum did not want to leave money to specific people, he still could have put it to good use through charitable giving, both during life and when he died. Minimally, every estate plan should include what’s sometimes called a bomb clause, naming the charity that would receive your assets if you and your closest heirs are wiped out simultaneously, as in an accident, and you prefer to benefit charity rather than some distant relative.

The simplest way to make a bequest is to designate one or more charities in your will or living trust, or on the beneficiary designation form of your retirement account. This may be any charity to which you could make a gift and then take a corresponding charitable deduction from your taxable income.

4. Sign documents to protect yourself. Advancements in medical science and care may enable us to live fuller, longer lives. The flip side is that more of us are likely to suffer from a diminished mental state–a harsh reality that’s difficult to accept.

Someone needs to be able to make medical decisions if you no longer can. To appoint this person, you will need a health care proxy (also known as a health care power of attorney) authorizing someone to make medical decisions on your behalf, if you can’t, and a living will (also known as an advance directive) expressing preferences about certain aspects of end-of-life care.

You should also sign a power of attorney allowing someone else to take over financial matters if need be. These, too, vary by state and can be found online by searching “free [your state name] power of attorney form.”

5.  Make documents accessible. Just as important as creating an estate plan is making important records available in case of your mental decline or after you have passed away. That once meant storing papers in a safe or a file cabinet at home, in a safe deposit box, or with a trusted adviser. Even if the record-keeping was spotty, there was a paper trail, starting with bills and statements that showed up in the mail. As more people manage their finances electronically, that trail has become harder to follow. If you live your financial life online, leave someone the keys to your electronic kingdom.

6. Don’t procrastinate. When Blum’s health was ailing, Mason D. Corn, his accountant, and friend of 30 years urged him to sign the necessary documents, The Times reports. After much cajoling, he finally agreed but died two weeks later without following up.

Located in Phoenix, AZ, and offers legal services in Phoenix Estate Planning, Revocable and Irrevocable Trusts, Wills, Probate, Asset Protection, and more. Giancarlo Estrada of the firm is licensed in both Arizona and California and is affiliated with the State Bar of Arizona (Probate and Trusts Section), Maricopa County Bar Association, and the Los Angeles County Bar Association. The firm offers services tailored to fit the needs of each of its clients.


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