Not many people understand the concept of estate planning. This is why as an estate-planning attorney in Orange County, CA, I have decided to explain estate planning and its importance for each of us.
When we think of an estate, we make the mistake of thinking of a large property. In fact, legally, one’s estate is made of all of one’s possessions and debts. Each of us has an estate, and everything from personal belongings to life insurance goes into it. As such, we need to make sure that at the moment of our passing there is a clear set of instructions regarding who gets what, and when. This is what estate planning is all about: making a complete list of your possessions and planning who will receive them after your death.
Unfortunately, most individuals do not plan their estate. The reasons vary. They might not because they either feel they own too little or because they feel that estate planning is something they should worry about at an older age. Unfortunately, this is not always the way it is. Accidents and illnesses can affect individuals at any age, and they can lead to loss of life. It is better to be prepared and plan your estate as early as possible, no matter how few personal possessions you feel that you have. More often than not good estate planning saves you money, and when you do not own too much every little bit counts. Once you have planned your estate, you should update your plan regularly, as your wealth and/or your family expand.
Many people feel confused about the steps they should take for good estate planning. If this is the case, I would recommend my estate planning services. Estate planning is not necessarily expensive. You can choose something basic which you can afford, and expand it as your needs change. A basic estate plan consists of a will, life insurance and legal power over your assets.
Although a will provides the court with your instructions, it is subjected to the state’s probate process before the distribution of your assets to your heirs. This process costs money, and the costs become higher if you own property in more than one state. It is a lengthy process, can take anywhere between one and two years, and it allows excluded surviving heirs to contest your will and request a share of your estate. It basically takes the control out of your hands and out of those of your family’s.
This is why many families prefer a revocable living trust. This provides a number of benefits, the most important of which being discretion. Assets in a living trust will not go through probate, saving your family money, and will prevent court confusion. Furthermore, assets can be kept in the trust even after your passing, where they will be managed by a trustee whom you have assigned, until the time your heirs reach the age you selected that they receive their inheritance. The trust can be maintained even for longer if you wish to protect your family from irresponsible investments and spending, or if you want to provide to a special needs family member.
Living trusts are legal in all US states, and you can modify them at any time. And, although it involves more initial costs, it may save your family money in the end. Even if it does not, it gives you power over your assets even after you are gone. Furthermore, knowing that your family will be properly cared and provided for should give you peace of mind, and this is the most important.
Estate planning is important for a number of reasons:
1. Names a guardian for your minor children and an inheritance administrator
Without estate planning, a court of law will appoint a guardian for surviving minor children. This person may not be the one you or your spouse would have selected. With estate planning you ensure that your children, their education and their inheritance are in good hands, no matter what happens to you and your spouse.
Good estate planning includes making life, disability and long hospital care insurance. This way, no matter what happens to you, you will have made sure your family is provided with the money it needs to not worry about expenses in such a difficult moment. Such insurances cover hospital care costs, provide you with an income in the event you cannot work anymore, or make a payment to your family in the event that you pass away.
3. Ensures the transfer of your possessions as you wished it
Without a will, the law splits your assets equally between the children and surviving spouse. That includes the house in which the spouse will still be living. In the end, the surviving spouse may not receive enough. You can ensure that he or she gets enough to get by through estate planning. Alternatively, you may not wish for your enterprise to be split between the surviving parties, but may prefer to leave it to someone who can administer it profitably and provide your family with dividends.
4. Give support to your family members, for years to come
Some people are not very responsible with money. Estate planning would allow you to provide members of your family with a monthly or yearly amount, which would cover their financial, needs and would stay with the person you want to receive it, regardless of any other problems he or she may have.
5. Minimizes taxes
Good estate planning will prevent loss of time and waste of money. It will help your family minimize the amount spent on legal fees, court costs or taxes.
Even if it may sound simple, estate planning can be pretty tricky. It is really not the place where you should try to cut costs; it might end up costing your family more later on. As an experienced estate-planning attorney in Orange County, CA, I can guide you through the process, ensuring that there are no problems with your documents and that no legal matter has been overlooked.
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