TRUST AND ESTATE PLANNING
Covering Temecula, San Diego,
& Inland Empire
What Is Estate Planning
What Is Estate Planning?
Generally, if you die without a will, trust, or other provision for the distribution of your money and property, that money and property will be distributed according to California law.
This is a complicated process (called probate) and can take months, and sometimes years, but essentially the state will determine who gets the property based on their relationship with you.
Your estate is all the property that you own. It can include cash, clothes, jewelry, cars, houses, land, retirement, investment and savings accounts, etc.
If you are trying to decide how to provide for the distribution of your assets or care of your children after you die, it is a good idea to hire a lawyer to help with the process.
Who Needs An Estate Plan? Pretty Much Everyone
Most of us put this off thinking we are too young or do not have enough assets.
However, if you own a house, of any type, you need an estate plan. If you have children, you need an estate plan. Creating a customized plan allows your wishes to be implemented immediately and avoids probate after your death.
Probate is a legal proceeding that is used to wind up a person's legal and financial affairs after death. In California probate proceedings are conducted in the Superior Court for the county in which the decedent lived, and can take at least eight months and sometimes as long as several years.
What Goes Into An Estate Plan?
Estate planning is one of the most important steps any person can take to make sure that their final property and health care wishes are honored, and that loved ones are provided for in their absence.
Though often overlooked or put off in favor of more immediate concerns, a comprehensive estate plan can resolve a number of legal questions that arise whenever anyone dies:
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What is the state of their financial affairs?
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What real and personal property do they own?
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Who gets what?
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Does a personal guardian need to be appointed to care for minor children?
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How much tax will need to be paid in order to transfer property ownership?
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What funeral arrangements are appropriate?
Many people mistakenly believe that estate planning just means getting a Will, but it’s actually much more than that. There are 4 key documents that you need in order to ensure your estate plan functions without a hitch.
Basic estate planning documents include a will (called a pour over will), a living trust, a durable power of attorney for finances, and a medical directive.
4 Key Components Of Estate Planning
The Will
One way you can control the distribution of your property after death is through a will. But, even though your will can provide for information on how to distribute your assets, your beneficiaries or a named executor will still need to go through a court process called probate to distribute your property.
Probate in California is lengthy and can be an expensive process. Most Californians prefer to avoid probate, and so they replace a Pour Over Will with what is called a Pour Over Will and the next key estate planning component, a Living Trust. This is because if you only have a simple will, and nothing else, probate court is required just to even carry out the provisions of a will.
Living Trust
This is probably the most key component of your estate plan. A living trust is a legal arrangement in which the trustee owns a property or properties for the benefit of named beneficiaries. Typically, as the person who creates the living trust, you would serve as the initial trustee.
Your trust agreement will specify how the trust property is to be divided when you die and who should take over as the trustee at that time or when you become incapacitated. The benefit of a living trust is that those changes all occur without having to go to court.
General Power of Attorney
A general power of attorney is a document that grants someone else authority over your property and financial transactions. You should have a general durable power of attorney in place so that those kinds of decisions can continue to be made on your behalf if you become incapacitated.
However, you should think carefully about who you want to appoint to make those decisions since you won’t be in a condition to oversee their actions.
Health Care Directive
The California Legislature has enacted a statutory advance health care directive form that you can use to appoint someone under a power of attorney for health care and give specific directions about your care.
It grants authority over medical decisions instead of financial decisions. Completing an advance health care directive is important because it tells your doctors who to look to for your health care decisions when you are unable to make them.
Important Issues and Benefits Of An Estate Plan
Estate planning deals potentially with these important issues:
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Transferring money and property at death and during life to family members and other important persons, or to business holdings, trusts or charities
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Minimizing related tax obligations
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Providing and caring for vulnerable family members, including seniors, those with disabilities and minor children
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Planning for financial and health care decisions in case of future incapacity
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Avoiding the need for probate, meaning the court process required to carry out a will's instructions or transfer property not otherwise disposed of by the person who has passed away.
Reasons To Create An Estate Plan
There are a variety of reasons why people decide to meet with an estate planning attorney and create an estate plan:
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Avoiding Probate: Avoiding probate is a very good reason for creating an estate plan and can be easily achieved.
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Avoiding Family Fights: Choosing someone to be in charge if you become mentally incapacitated and after you die and deciding who will get what, when they will get it, and how they will get it after you're gone will go a long way towards avoiding family fights and costly probate court proceedings.
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Protecting Minors: You can prevent family discord and costly legal expenses by taking the time to designate a guardian and trustee for your minor beneficiaries.
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Protecting Assets from Unforeseen Creditors: Once you know or even just suspect that a lawsuit is on the horizon, it's too late to put a plan in place to protect your assets.
So, having an estate plan is like having health insurance. It is a necessity we don’t like to think about, but we are grateful we have it, knowing it will save our loved ones angst, and money, providing huge peace of mind.
Having an estate plan in place for when you die is one of the most thoughtful things you can do for your loved ones. But, making sure that you're estate plan is done correctly can be tricky.
Understanding the estate plan options that are right for you can be a complex undertaking. You need a caring estate planning attorney who makes things simple, will help you identify your estate planning needs, and helps you at every step of the estate planning process.
So, whether you need to revise an existing will or create a comprehensive estate plan from scratch, reaching out to an estate planning attorney who is easy to work with and affordable is something you should not put off.
Andrea Aston, Attorney at Law, specializes in trust and estate planning and also probate. Let her help you. Set up a free consultation for your trust and estate planning needs today.
Tags:estate planning, avoid probate, living trust, will, power of attorney, death planning, inheritance planning, beneficiary planning, advance medical directive