Estate planning is a process that allows you to designate the recipients of your assets in case of your death. Estate planning is frequently used to eliminate the need for probate and minimize taxes. It can also serve to choose the person who will make financial and health care decisions on your behalf if you become unable to make your own.
Many people believe estate planning is only for the rich. However, everyone has an estate regardless of his or her wealth.
An estate includes all the property one owns at the time of death. This includes real estate, bank accounts, stocks, life insurance policies, and personal properties such as cars and furniture. A proper estate plan will ensure that your final wishes regarding your property and health care are honored and your loved ones are provided for.
Since we cannot predict when a tragedy such as an accident, illness, or death can struck, the best time to plan and create a proper estate plan is now.
What is involved in an estate plan?
A typical estate plan will likely include a few different instruments. Some of the most commonly used instruments are discussed below.
Will – A will is a legal document allowing you to designate who will receive your property when you pass away.
Trust – A trust is a legal instrument that creates a fiduciary agreement where a trustee holds trust assets for the benefit of designated beneficiaries. There are many different forms of trusts available such as Living Trusts, Revocable Trusts, Irrevocable Trusts, AB Trusts, ABC Trusts, Q-TIP Trusts, Special Needs Trusts, Spendthrift Trusts, Education Trusts, Charitable Trusts, and Life Insurance Trusts. Our attorneys at Holborn Law can assist you in choosing the appropriate trust to meet your needs.
Health Care Directive – A health care directive or advance health care directive is a legal document, which allows you to pick a person or persons who will make decisions about your health care when you are unable to make those decisions due to illness or incapacity.
Durable Power of Attorney – A durable power of attorney is a legal document which allows you to pick a person or persons to make financial decisions on your behalf when you are unable to make those decisions due to illness or incapacity.
Guardianship of Minor Children – A guardianship for minor children is a legal instrument, which allows you to choose a guardian or guardians for your minor children. This will give the guardian(s) full legal and physical custody of your minor children in case of your death so that your minor children are well taken care of.
Other Documents – An estate plan can also include other documents such as life insurance policies to better plan for the future of your loved ones.
How can an estate plan help you and your loved ones?
A good estate plan will provide you and your loved ones with many benefits. The most important benefits are discussed here.
Plan for Incapacity – As mentioned above, many of the estate planning instruments listed are used to ensure your financial and health wishes are followed in case of incapacity.
Provide for Loved Ones – Estate planning will allow you to identify those you wish to receive your property after you pass away, instead of allowing state laws to make those decisions for you.
Help a Favorite Cause – Through proper estate planning, you can help charitable causes dear to your heart both during your lifetime and after you pass away.
Avoid Probate – A proper estate plan will ensure your loved ones receive their shares of your assets quickly and without the hassle of going through the often lengthy probate process.
Minimize Expenses – Avoiding probate will allows your loved ones to avoid unnecessary court costs and legal fees.
Minimize Taxes – A proper estate plan will allow you to minimize your tax burden.
Ease the Burden on Your Loved Ones – As part of your estate planning, you can plan out your funeral arrangements and thus not only lower the funeral expenses but also ease the strain on your grieving family and friends.
Ensure Your Businesses Continue Smoothly – Through your estate planning, you can put in place people and procedures necessary to ensure that your businesses continue their day-to-day operations without any unnecessary interruptions in case of your incapacity or death.
The Biggest Benefit Is Peace of Mind – A properly drafted estate plan will put your mind at ease by ensuring that you have a plan in place in case of tragedy. You can be assured that not only are your loved ones provided for but that your heath and financial wishes will be followed in case you are incapacitated.
Estate planning can be a complicated process and it is best to use an attorney when drawing up your estate plan. Also, estate planning is an ongoing process. You should review and update your estate plan documents as existing law as well as your family and financial situations change. Holborn Law can help you identify your potential estate planning needs, find the best solutions, and draft the necessary documents. To schedule a consultation, contact 844-HOLBORN and one of our estate planning attorneys will be happy to assist you.
Disclaimer: This post is meant for general informational purposes only, and it is not to be construed as legal advice. As with any laws, the information in this blog post may change at any time and may apply differently in different jurisdictions. The post may constitute Attorney Advertising as defined by the rules of professional responsibility of some jurisdictions. Holborn Law is based in Orange County and Riverside. The attorneys of Holborn Law APC are active members of the State Bar of California and licensed to practice law in California. All services relating to immigration and naturalization provided by Holborn Law APC are provided by active members of the State Bar of California or by a person under the supervision of an active member of the State Bar of California.