For anyone who is new to estate planning, the prospect of creating an estate plan can be an intimidating one. The concepts, language, documents, and even some of the goals are unfamiliar. While every estate plan is unique, the Los Angeles estate planning attorneys at Collins Law Firm offer some common steps in the estate planning process to make the process a little less intimidating.
- Define your goals. Before you can really get started with your estate plan you need to sit down and define your estate planning goals. Ensuring that you do not leave behind an intestate estate may be your primary incentive to create your plan; however, you will likely have related goals you wish to achieve with your plan as well, such as incapacity planning.
- Assess your assets and liabilities. You undoubtedly have a pretty good idea of what your net worth is; however, when you start focusing on the details of your estate plan you will need details relating to your assets and liabilities as well. The easiest way to handle this is to make two lists – one for assets and one for liabilities. Include as much information as possible in each entry so your Executor can use the lists as well when the time comes to probate your estate.
- Identify beneficiaries and specific bequests. Your primary beneficiaries are easy – spouse, children, family, and friends; however, you may also want to add a charity or even your family pet once you really think about it. Also, start thinking about specific bequests you wish to make, such as leaving family heirlooms to specific children.
- Choose your fiduciaries. Do not make the common mistake of appointing fiduciaries, such as your Executor or a Trustee, based solely on the fact that they are a family member or friend. Instead, take the time to really consider who is right for the position.
- Protect your minor child’s financial future. If you are a parent, keep in mind that your minor child cannot inherit directly from your estate. It is crucial that you include tools, such as a trust, to protect your child’s estate until he/she reaches the age of majority.
- Learn about probate. Probate is the legal process typically required after someone dies. Probate can be costly, both in terms of time and money. Fortunately, there are several tools and strategies that you may be able to use to help your estate avoid probate. The key is to limit your probate assets because not all assets are required to go through probate. Commonly used assets that bypass the probate process (non-probate assets) include:
- Assets held in a trust
- Certain types of jointly held property
- Proceeds of a life insurance policy
- Assets held in an account designated as “payable on death (POD)” or “transfer on death (TOD)”
- Most retirement and pension accounts
- Consider the possibility of incapacity. A comprehensive plan will also contemplate, and plan for, the possibility of your own incapacity. Whom do you want to take over your assets and make decisions for you in the event you are incapacitated at some point in the future?
- Work with an experienced estate planning attorney. Once you are ready to sit down and put your estate plan together, you need to consult with an experienced estate planning attorney. Do not make the mistake of trying to DIY your estate plan. The DIY forms you find on the internet will almost always create problems for your loved ones when it comes time to probate your estate. The relatively small amount of money you save now could end up costing your loved ones a small fortune in legal fees down the road.
Contact Collins Law Group
For more information, please download our FREE estate planning worksheet. If you have additional questions or concerns about estate planning, be sure to consult with an experienced Los Angeles estate planning attorney. Contact the Collins Law Firm by calling (310) 677-9787 to register for one of our FREE estate planning workshops.