ESTATE PLANNING - What you should know...
FIRST AND FOREMOST, establishing an estate plan does not have to be time consuming and complicated. I pride myself on guiding my clients with compassion and experience that leads to a plan that will live into the future and smooth the path if one of life's unfortunate events occurs.
While nobody wants to think about death or disability, establishing an estate plan is one of the most important steps you can take to protect yourself and your loved ones. Proper estate planning not only puts you in charge of your finances, it can also spare your loved ones the expense, delay and frustration associated with managing your affairs when you pass away or become disabled.
Have any of these events occurred since you last updated your Estate Planning documents:
- Estate Planning Documents needed: Updates or New documents
- Dementia diagnosis of a spouse, parent or loved one?
- Purchased a home?
- Marriage or Divorce?
- Birth of a child?
- Children off to college?
- Aging parents that may need more assistance?
Please contact me for more information about the process and how Estate Planning documents will make life easier as they progress through the transitions that life brings.
While nobody wants to think about death or disability, establishing an estate plan is one of the most important steps you can take to protect yourself and your loved ones. Proper estate planning not only puts you in charge of your finances, it can also spare your loved ones the expense, delay and frustration associated with managing your affairs when you pass away or become disabled.
Have any of these events occurred since you last updated your Estate Planning documents:
- Estate Planning Documents needed: Updates or New documents
- Dementia diagnosis of a spouse, parent or loved one?
- Purchased a home?
- Marriage or Divorce?
- Birth of a child?
- Children off to college?
- Aging parents that may need more assistance?
Please contact me for more information about the process and how Estate Planning documents will make life easier as they progress through the transitions that life brings.
|
Providing for Incapacity
Who will manage your financial affairs if you become incapacity and unable to act? Many people believe their spouse or adult children can automatically take over for them in case they become incapacitated. This is not always the case. In order for others to be able to manage your finances, they may need to petition a court to declare you legally incompetent. This process can be lengthy, costly and stressful and continue with yearly court investigations and required accounting to be filed with the court. By designating a person or persons you trust through a Power of Attorney, they will have the authority to withdraw money from your accounts, pay bills, take distributions from your IRAs, sell stocks, and refinance your home, file taxes, etc. |
|
|
In addition to planning for the financial aspect of your affairs during incapacity, you should establish a plan for your medical care.
In California, this document is referred to as an Advanced Healthcare Directive and allows you to appoint someone you trust to make decisions on your behalf regarding medical treatment options if you lose the ability to decide for yourself. The Advanced Healthcare Directive includes your preferred medical treatments such as the use of extraordinary measures should you become permanently unconscious or terminally ill. You may also address your wishes regarding organ donation, pain relief, and burial preferences. |
|
Avoiding Probate
A Will alone will not keep your estate out of the probate court.
The probate process is expensive, time-consuming and the records are open to the public access. Your assets can be tied up in probate court for at least 6 months (often much longer) until the estate has been settled and the court has approved the distribution of the assets. If you are married and have assets held in your name alone that are needed for your family, your surviving spouse may be forced to apply to the probate court for needed cash to pay current living expenses. Proper planning allows your assets to pass to your loved ones without the probate process, in a manner that is quick, inexpensive and private. This planning includes revocable trusts and proper beneficiary designations, along with other documents.
A Will alone will not keep your estate out of the probate court.
The probate process is expensive, time-consuming and the records are open to the public access. Your assets can be tied up in probate court for at least 6 months (often much longer) until the estate has been settled and the court has approved the distribution of the assets. If you are married and have assets held in your name alone that are needed for your family, your surviving spouse may be forced to apply to the probate court for needed cash to pay current living expenses. Proper planning allows your assets to pass to your loved ones without the probate process, in a manner that is quick, inexpensive and private. This planning includes revocable trusts and proper beneficiary designations, along with other documents.
|
Providing for Minor Children
It is important that your estate plan address issues regarding the upbringing of your children. If your children are young, you may want to consider implementing a plan that will allow your surviving spouse to devote more attention to your children, without the burden of work obligations. You may also want to provide for special counseling and resources for your spouse if you believe they lack the experience or ability to handle financial and legal matters. |
|
What happens if both you and your spouse dies simultaneously, or within a short duration of time?
A contingency plan should provide for persons you’d like to manage your assets as well as the guardian you’d like to nominate for the upbringing of your children. I have found that appointment of a guardian is one of the most difficult decisions for people when they are creating an estate plan.
Most people immediately go through the list of family members that may be a good choice. However, family members are not the only option. You may want to consider friends that are part of your community, have children the same age and may already have a close relationship with your children, share the same values, raise their children with the same ideas, are in the same school district.
Consider the age and financial situation of a potential guardian. Some guardians may lack child-rearing skills you feel are necessary. Create a plan does not create a financial burden for the guardian.
Most people immediately go through the list of family members that may be a good choice. However, family members are not the only option. You may want to consider friends that are part of your community, have children the same age and may already have a close relationship with your children, share the same values, raise their children with the same ideas, are in the same school district.
Consider the age and financial situation of a potential guardian. Some guardians may lack child-rearing skills you feel are necessary. Create a plan does not create a financial burden for the guardian.
|
The person in charge of the finances need not be the same person as the guardian. In fact, in many situations, you may want to purposely designate different people to maintain a system of checks and balances. By addressing who will manage your finances and raise your children, you assure the decision will not be left to a court of law. Even if the court were to appoint the same person or persons you would have selected, they may have undue burdens and restrictions placed on them by the court, such as having to provide annual accounting.
Distribution of assets through a revocable Trust you can structure the distribution to your beneficiaries. It is not always wise to distribute large sums of money outright to your beneficiaries. You can direct the assets be held in trust, with distribution to be based a number of factors, such as age, need and even incentives based on behavior and education. Distribution can be spread out over a number of years. |
|
Planning for Federal Estate Taxes
The IRS will review your estate at death to ensure you don’t owe the federal estate tax. Whether there will be any tax to pay depends on the size of your estate and how your estate plan works. There are many effective strategies that can be implemented to reduce or eliminate the Federal Estate tax, but you must start the planning process early in order to implement many of these plans. |
Charitable Bequests – Planned Giving.
What is the Legacy you want to leave behind? Is there an organization that you would like to remember in your estate plan? You can provide for organizations in a variety of ways, either during your lifetime or at your death. Your financial adviser and your attorney can work together to create a plan that best meets your charitable goals, and may also let you receive a stream of income for life, earn higher investment yield, or reduce your capital gains or estate taxes. |
A well-crafted estate plan will provide for your loved ones in an effective and efficient manner by avoiding Conservatorship during your lifetime, probate at death, estate taxes and unnecessary delays. Consult a qualified estate planning attorney to review your family and financial situation, your goals and explain the various options available to you. Once your estate plan is in place, you will have peace of mind knowing that you have provided for yourself and your family for today and the future.
