…and Why Do I Need One?
Estate planning means taking all of the legal steps necessary to protect yourself and your assets (home, personal possessions, cash, investments and retirement funds – your estate) in case you become incapacitated or pass away. It includes providing for what happens to children or pets in such an event. It can also include legal contracts like pre- or post-marriage or domestic partnership agreements that clarify how assets will be divided if a relationship ends.
Proper planning allows you to save
as much as possible on taxes,
court costs, and attorney fees.
And most importantly, it ensures that loved ones will have an easier time coping with the administrative and financial aspects of losing you.
Why do I need to involve an Attorney in this process?
A professionally developed estate plan can be highly creative and tailored to meet your specific goals. If you reside in California, it is important that you consult an experienced California-licensed estate planning attorney who will ask what is most important to you and explain in detail all the options you have when it comes to creating an estate plan.
There are many financial planners out there selling insurance and investment products along with a “living trust,” or you can go online and get a “do-it-yourself” estate plan. Neither of these options ensure that all of the planning objectives unique to you will be taken into account. From tax issues, to blending families, to planning for succession of a business, your estate planning attorney has only your interests in mind when drawing up your plans. They sell no investment products and make no commissions on recommending investments. In other words, they work for you and no one else
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What are the Elements of a Good Estate Plan?
Will – Every adult should have a Will. It states what will happen to your property, children and pets if you die. It identifies an executor or personal representative whom you trust to handle your estate. Your Will must be filed with the Probate Court within 30 days after your death. If your probate assets are worth more than $150,000, your agent must petition the Court to open a Probate action and to appoint him or her as authorized executor or agent. The Court then supervises the estate while your agent carries out the terms of the Will – locating creditors, paying debts, accounting for assets, and finally, distributing what remains of the assets to heirs and beneficiaries.
Living Trust – Many people who own real property and other investments can benefit from a revocable living trust. In most cases, this type of trust avoids the public nature and costs of filing a probate action for the estate after your death. The trust is managed by a trustee (usually yourself, during your lifetime) and names one or more “successor trustees” who will manage your estate when you become incapacitated or die. It gives detailed instructions for handling property and other assets, children, pets and any other issues that you want to include.
General Durable Power of Attorney – If you suddenly become ill, or unable to mentally or physically handle financial matters for other reasons, it is essential to have someone you can trust to take over, either temporarily or permanently. The durable power of attorney can have “springing
powers” that clearly state the conditions under which you want someone else to become responsible for handling your financial affairs and who that person should be. It makes it possible for your bills to be paid, your children and/or pets to be supported, and your assets to be protected until you recover.
Advance Health Care and Personal Care Directive – Sometimes referred to as a health care power of attorney and a living will, this legal document identifies your trusted personal agent who can make medical and personal care decisions for you if you are unable to do so. It also states your wishes regarding resuscitation and life-prolonging medical procedures if you are terminally ill, and whether you wish to be an organ donor.