The first step in constructing an estate plan is knowing what every estate plan should have, and the ideal way to start is by speaking to an experienced California estate planning attorney. After crafting yours, updating your estate plan every five years or when a significant life event occurs is essential in order to keep it accurate.
Everyone needs an estate plan. While it may seem like an estate plan only starts working after you pass away, the documents also help manage your life while alive. Someone must manage your rent and other bills when you cannot, and you may need someone to talk to your doctor if you are incapacitated. Although these situations may seem far away, they are everyday experiences that could happen at any time. A well-documented estate plan provides an easy transition of responsibility.
Here is a basic checklist of the crucial items every estate plan should have:
Alongside these documents, it is crucial to account for other aspects of life with an Advance Health Care Directive, a Caregiver’s Authorization Affidavit, and more. Contact an experienced estate planning lawyer for sound advice and direction on what your estate plan should entail.
A will allows you to list your complete inventory of assets and designate where and to whom they should be distributed. This could include, but is not limited to, family members, close friends, or associates. The will goes through a probate court, and a judge determines its validity, which can be time-consuming, especially when you have many assets in your will. You may place many of your assets in a trust to simplify things.
If you would like to avoid probate court, trusts can be a helpful way to do this. The most common trusts are living trusts and irrevocable trusts.
A living trust—or revocable trust since it can be changed or canceled anytime—gives you the right to designate beneficiaries and assign assets just like a will does. You remain the trustee while you are not incapacitated. Should you become incapacitated, the trustee you name would take over the management of your assets listed in the trust. When you pass away, the trustee will oversee asset distribution per the trust’s dictation.
In an irrevocable trust, you assign your assets to a trustee immediately. This type of trust is different from a living trust in that it cannot be changed without the permission of the beneficiaries. Irrevocable trusts are usually chosen to minimize estate taxes and to protect assets.
This document gives someone else the right to handle critical decisions on your behalf. There are two main types of powers of attorney or POA: financial and medical. A financial POA allows someone to handle your finances, while a medical POA allows someone to make medical decisions for you. Alongside a medical POA, it is important to lay out an advance directive to specify to doctors what care you wish to receive.
POAs have different timeframes. They are:
While not legally binding, letters of intent are informal documents that give your loved ones important information after your death. Your family or trustee uses these documents to help interpret your instructions and help the estate transfer process go smoothly.
Guardianship designation is essential if you have children, whether through marriage or not. This term applies to “guardianship of the person” or “guardianship of the estate” in California.
While you can elect to have two separate individuals responsible for each role, usually, the same person functions as both.
A: The most important estate planning documents are wills, trusts, powers of attorney, beneficiary designations, letters of intent, and guardianship designations. While some of these documents, like wills and trusts, allow you to specify which of your assets should go to whom, others allow you to choose who you would like to make decisions on your behalf if you become incapacitated.
A: The four foundational documents of an estate plan are:
While other documents may be included in an estate plan, these four are the most frequently included and most important. However, everyone’s needs are different. Speak to your lawyer about what documents you may benefit from.
A: To ensure a smooth estate plan, you should consider how to provide for loved ones in the way you prefer. With a will or trust, you can clearly define your beneficiaries, who will receive your assets. It’s also important to establish who you’d like to have the authority to make crucial decisions regarding your medical care and finances on your behalf.
A: To properly organize your documents, you should take inventory of your assets and documents, specify the location of all of your assets and documents, and leave instructions on how to access them. Your attorney can assist in the preparation and organization of these documents and your estate plan.
Estate planning entails much more than just filling out forms. To understand the ideal choices for your situation, you need the knowledge and experience of an attorney.
If you already have an estate plan or are gathering information, contact the Estate Preservation Group today. Our experienced attorney can answer your questions and assist in your estate planning process.
The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice
regarding your individual situation. Contacting us does not create an attorney-client relationship.