Surveys are conducted that ask people if they have wills or trusts in place. Year after year, they find that most people are completely unprepared from an estate planning perspective.
Interestingly enough, the majority of these people say that they know that it is an important responsibility. Why do they fail to act? One reason is that they simply do not know where to begin, and with this in mind, we will share some steps that will help you get started.
Assess Your Assets
The first step you should take when you start to plan your estate in earnest is to make projections with regard to the property that will comprise your estate. When you are doing this, you should consider the practical value of downsizing and liquidation of some of your property.
For example, let’s say that you have one son that is an only child, and he has no interest in classic cars. You are a big collector, and your collection is very valuable. Since you are an aficionado, you would understand the fair value, and your son would not.
Under these circumstances, you may want to resolve to sell your collection at some point so that you can get top dollar and simplify the process for your son. This is just a random example, but the point is clear: Your children may not want your stuff.
Consider the Recipients
Some people think of estate planning as an exercise in slicing up a pie into different size pieces, and they are distributed in the same manner. You can look at it this way, but it is wise to consider the life situation and the personal proclivities of the people on your inheritance list.
If you have someone in the family that is not good with money, you may have concerns about leaving them a direct inheritance with no spending safeguards. They will receive lump sum inheritances if you use a will, but you do not have to take a risk and hope for the best.
A revocable living trust with a spendthrift clause can be a better choice. You would still control the assets while you are living, but they would be protected from creditors after your passing. The trust can provide limited incremental distributions over time to prevent reckless spending.
There is also the matter of minor beneficiaries since they cannot handle their own money. You can use a living trust or testamentary trust that is embedded within a will to cover this base.
These are a couple of circumstances that can exist, and there are many others. Your estate plan should be constructed to provide for each loved one in an optimal manner.
Address End-of-Life Eventualities
A properly constructed estate plan will go beyond the obvious financial component. It is not a pleasant subject to consider, but people often become unable to make sound decisions toward the end of their lives.
If you do not address this possibility, the state could potentially appoint a guardian to act on your behalf, and you would become a ward of the state. You can avoid this fate if you take the right legal steps in advance.
Advance directives for health care will be part of the incapacity component within your broader estate plan. A living will is used to state your life support preferences and organ and tissue donation choices.
You can name a representative to make medical decisions on your behalf that are not related to life-support in a durable power of attorney. The plan should include a HIPAA release to give your agent the freedom to access your medical records.
On the financial side of things, if you have a living trust, you can name a disability trustee. For property that is not in a trust, you can name a representative in a durable power of attorney for property.
Contact Us to Put a Plan in Place!
We are in this field because we care about our community, and we go the extra mile to make our clients feel comfortable every step of the way. When you work with us, you will feel this commitment.
If you are ready to put a plan in place, you can schedule a consultation at our Los Angeles, CA estate planning office if you call us at 310-677-9787.
There is also contact form on this site you can use if you would rather send us a message, and if you reach out in this manner, we will get back in touch with you promptly.