Estate Planning: Wills & Trusts

What is Estate Planning All About?

Many people hold the mistaken belief that estate planning is only about who gets your stuff when you die.  When really, it’s about planning for an emergency, putting someone in charge, leaving them instructions, and giving the power for them to act without having to go to court.

 

All the documents of a complete estate plan, rather than just a trust, are going to put you in control of your future.  You’ll be taken care of while you’re living, and then your loved ones will be taken care of after you’re gone.

 

Plan to Take Care of Yourself if You Become Sick or Disabled

 

The first thing that we want to do in estate planning is take care of you while you’re alive.

What if you are sick or disabled and can’t make your own decisions?  What type of condition could that be?

·       Heat attack or stroke

·       You’re on a ventilator and medically sedated

·       Traumatic brain injury from a car crash

·       Alzheimer’s or dementia

·       Unconscious or vegetative state

 

If you are sick or disabled and can’t make your own decisions, then you will need someone to make financial transactions for you, and you will need someone to make medical decisions for you.  Are you prepared to answer these questions if you are sick or disabled:

·       Who will be your agent to act for you?

·       What instructions do you need to leave from your agent?

·       What powers do you need to give your agent?

 

If you don’t have the right documents in place putting someone in charge, giving them instructions, and authorizing the right powers, then California law requires a conservatorship, which is a court case where a judge appoints a conservator with the power to act for you.  A conservatorship is expensive, intrusive, and your private information will become public record.  Shouldn’t you plan to avoid a conservatorship?

 

What if you needed long-term care in a nursing home?  How can you afford that?  Your estate plan can help you plan in the future if you needed long term care in a nursing home.

You must have the right documents in place BEFORE you need them.  After you lose the mental capacity to enter into these documents, then it is too late.

 

Provide an Inheritance and Protect Your Loved Ones

The vast majority of married couples will want an estate plan where the assets go to the surviving spouse when the first spouse dies.  Then, after the surviving spouse dies, all the assets are dividing equally between the children.  Sounds simple, but there are many issues that can come up with this plan.

Most people think that the only way to give an inheritance is to give their loved ones the inheritance money directly.  What could go wrong if you give the inheritance money to your loved ones?

·       Your spouse receives all of your money but because you have a blended family, your children risk not receiving their inheritance because they are not the heirs of your spouse

·       Your spouse receives all of your money but your spouse remarries, and now your children risk not receiving their inheritance because the step-parent may spend all of their inheritance

·       Your daughter receives her inheritance, and your son-in-law gets it

·       Your son receives his inheritance and because he can’t handle money, he spends it all

·       Your son receives his inheritance, but because he owes a lot of debts, his creditors receive all of the inheritance money

·       Your son receives his inheritance but because he has special needs and receives needs-based government assistance, he loses those benefits because he is now ineligible for those benefits

·       Your inheritance causes family problems and fighting

 

You have a lot of options to avoid issues and problems in the future.  Giving your inheritance directly and outright to your loved ones is not the only option.  In fact, it’s the option that usually leads to the most problems.  Although this is simple and easy, you lose control over the funds after you give it to them.

 

Your estate plan can put restrictions, limits and conditions on how and when your loved ones receive their inheritance.  Designing a custom estate plan depends on the goals and wishes that you have, but it also depends on your specific family issues and problems to solve.

 

What issues and problems do we need to solve for your family?  How can we maximize your loved one’s inheritance?  What are the best options for your family?

Book a Call to Talk With an Estate Planning Attorney