Estate Planning Terms to Know

It’s been said that you’re never too young nor too old to begin estate planning, but you can be too late. The 2021 Wills and Estate Planning Study by the website Caring.com indicates that too many Americans have been delaying estate planning, with only 32.9 percent of Americans having a last will and testament in place.

The good news is that the pandemic awakened younger Americans, those aged 18 to 34, to the need to plan for any eventuality. That age group’s percentage of those with estate planning documents in place rose from 16.4 percent in 2020 to 26.8 percent in 2021.

The will is the basic instrument of estate planning, but it can be cumbersome to administer as it must go through probate court proceedings. Plus, it cannot take into consideration every eventuality, including the incapacitation of the will writer (testator). Trusts, powers of attorney, advance directives, and other instruments round out a complete estate planning endeavor.

If you’re in Carlsbad or Oceanside, California, or anywhere in North County, contact me at the Estate Preservation Group whether you need to start your estate planning or you just need to review and augment what you already have in place.

For 30 years, I have dedicated my law practice to helping others plan for the future and secure peace of mind for themselves and their loved ones. Every person’s situation is unique, so I will consult with you and present you with the best options given your needs and circumstances.

Estate Planning Essentials

We’re all familiar with TV dramas where a will is read and gasps arise from the attendees who feel they’ve been left out or shortchanged. TV dramas aside, the purpose of estate planning is at least basically twofold: to protect you and your assets and to provide for your loved ones when you’re gone.

There are no health guarantees built into life, no matter how successful you may be. Something can happen that leaves you incapacitated and unable to make decisions for yourself. That’s a possible eventuality that you need to prepare for. 

Perhaps your spouse can step in and manage your assets and make decisions in your stead if you’re incapacitated. In any case, it’s important to have legal instruments in place to safeguard your assets while you’re alive as well as to distribute them when you’ve gone.

Following is a compendium of common estate planning terms and their definitions to help you understand the process of preparing for the future:

INTESTATE: This is a legal term for dying without a will or trust in place. Your assets will be assigned to a probate court, and a judge will decide who gets what.

WILL: Also called a last will and testament, a will allows you as the testator to assign your assets to whomever you choose, generally family members, close friends, or associates, but the will still must go through probate court, which can be a lengthy and often costly process. If there are disputes, the judge may have the final say.

EXECUTOR: When you create a will, you name a personal representative to foresee the distribution of assets as you designate after you’re gone. When your will goes before a probate court, the personal representative – family member, close friend, trusted associate – becomes known as the executor.

LIVING TRUST: A living trust allows you to designate beneficiaries and assign assets just as a will does, but a trust does not have to go through probate court. The trustee you name in your trust will be responsible for carrying out your wishes. 

While you are alive and not incapacitated, you remain the trustee. The successor trustee you name will take over management of your assets should you become incapacitated. When you pass away, the trustee will foresee the distribution of assets as you dictated in the trust. A living trust is also known as a revocable trust because it can be changed or canceled at any time.

IRREVOCABLE TRUST: For an irrevocable trust, you assign your assets to a trustee who then oversees everything. An irrevocable trust cannot be amended without the permission of the beneficiaries. This type of trust is often used to minimize estate taxes and to protect assets from creditors.

BENEFICIARY: This is anyone you name in your will or trust to receive your assets or a portion thereof when you’re gone. A beneficiary can be a family member, friend, associate, or charity. Pets are also often named as beneficiaries. In fact, you can even set up a pet trust.

POWER OF ATTORNEY: This is a legal instrument to give someone else the authority to act in your name in financial and other matters. A power of attorney can be temporary or what is called durable, which remains in effect if you become incapacitated and cannot act personally. A power of attorney can also be limited in scope or take effect only upon a certain event occurring, which is called a “springing” power of attorney.

ADVANCE HEALTH CARE DIRECTIVE: In popular parlance, this is similar to a “do not resuscitate” order, but it can be more comprehensive than that and can even include instructions to attempt resuscitation. The advance directive spells out your wishes for medical care should you be hospitalized and unable to speak for yourself. It also names a health care agent who in effect has a durable power of attorney to voice your treatment and medical choices when you cannot. An advance health care directive is also known as a living will.

Hire an Experienced California Estate Planning Attorney

Despite the presence of online forms for wills, trusts, advance directives, and other estate planning instruments, estate planning is really not a do-it-yourself endeavor. These forms cannot take into account every personal nuance and legal ramification. You need to rely on the knowledge and experience of an attorney who has helped countless others prepare for the future.

If you’re ready to get started with estate planning, review what you already have, or update everything to fully reflect your current situation, contact me at the Estate Preservation Group. I proudly serve clients in Carlsbad and Oceanside, California, and throughout North County.


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