With proper preparation, estate planning will minimize financial hardships and painful disputes between family members after your death. A comprehensive estate plan establishes who and when they will receive your assets and how such transfers should occur. The key is to take inventory of your assets and allocate them according to need and efficiency of transfer.
Wills, Trusts, and Power of Attorney
Considerations for Proper Planning
- Power of attorney is granted the authority to advocate for you by making medical decisions on your behalf if you become incapacitated or seriously ill. An advance medical directive, sometimes called a “living will”, can also enumerate your wishes for end-of-life treatment should you become unconscious or in a terminal state.
- A financial power of attorney authorizes an individual to handle all your financial affairs.
- Wills take effect upon death and govern the distribution of property in your probated estate, excluding any assets purposely left outside the probated estate.
- Trusts help allocate assets to heirs who are not ready or able to receive them and can be made effective before or after death.
- Inter vivos trusts transfer assets or take care of relatives outside of your will.
- Executory trusts control specific assets for an heir’s benefit.
- Deeds place real estate properties out of the probated estate and directly into the hands of a specific heir.
- Assets, such as investment accounts and life insurance, are contractual in nature and not usually governed by the documents described above. The timing and structure of transfers and distributions are determined by documents effective before death, after death, or both before and after death.
Several factors influence the timing and structure of asset transfers and distributions
- The ages of the heirs
- The maturity of the heirs
- The stability of the heirs’ families, marriages, and finances
- Disabilities, incapacities, and special needs among the heirs; and
- Actions and potential actions by creditors against a particular heir.
Beneficiaries named on insurance policies, retirement plans, and investment accounts should complement priorities established in your estate plan. Having minor children or financially irresponsible young-adults, are strong reasons to consider creating trusts that address their particular circumstance, to avoid unrestricted inheritance. If you have a loved one with long-term healthcare needs, appropriate provisions should also be made. Those granted powers of attorney, representation, executorship, agency, trusteeship, conservatorship, and guardianship are crucial to fulfilling the intents of the estate plan. We’ll help you make thoughtful and decisive selections that will ease the challenges of facing tough choices. While alive, a proper estate plan can help avoid probate, in case you become incapacitated. Upon your death, a proper estate plan can allow you to properly direct your assets to your family members and protect them from predators and creditors.
What Is Estate Planning? What Should Be The Goal Of An Estate Plan?
Estate planning is for everyone. Whether a person is 20 years old or 80 years old, estate planning is a tool they can use to put their assets in one place and ensure that those assets will be distributed according to their wishes upon death. Having an estate plan allows people to plan for the avoidance of the costs of court intervention. In addition, it can help people protect their assets from creditors…Read More
What Are The Different Types Of Trusts? What Are Their Purposes?
One way some people choose to create estate plans is by setting up a trust. The person who creates a trust is called a trustor, and the person who receives it is known as the beneficiary. A trustee is a person who handles the assets in the trust on behalf of the beneficiary.
For example, a mother may create a trust for her young son and name her brother the trustee. The son is entitled to the assets in the trust, but the deceased mother’s brother controls the assets according to her wishes outlined in her estate plan…Read More
How Often Should Someone Review And Update Their Estate Plan?
These are just some of the life events that should trigger a review of your estate plan. Speak to a Downey, CA estate planning attorney to learn about other events that may signal that it’s time to reassess your estate plan.
Getting into the habit of reviewing your estate plan at regular intervals will help ensure that your assets are passed onto your heirs in accordance with your wishes. In addition, it will help make sure that your heirs receive their inheritance as smoothly as possible…Read More
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