Although planning for the distribution of your property and assets after your death may seem gloomy, the process can be incredibly rewarding. After all, providing for your loved ones is an act of enormous love. From ensuring that your assets are distributed in accordance with your wishes, to establishing a legacy, to gifting deserving charitable organizations, estate planning ensures that your hard work over the years will benefit the people and causes that matter most to you. Here’s a look at what to do, and what not to do when planning your estate.
What is Estate Planning?
Estate planning is the process of putting your affairs in order. It is done to ensure that your wishes for the distribution of your assets are honored. Estate planning also ensures that the appropriate care is given to you near end-of-life. Estate planning names who should have power-of-attorney, who shall inherit your properties and belongings, and more. A comprehensive estate plan will include a variety of legal documents that provide instructions.
What Should Be Included in an Estate Plan?
All estate plans should include several crucial documents. Estate plans that include business ownership will need additional documents.
Will
A will, otherwise known as a last will and testament is legal document that makes clear how you want your assets to be distributed upon your death. In your will, you will name the person you wish to serve as the executor. The executor is the person responsible for seeing that your instructions and wishes are honored. The executor will also be responsible for paying any debts, or taxes owed on the estate. You may choose to have a family member serve as the executor. You may also appoint an attorney or other trusted advisor as the executor of your will.
If you have minor children, your will should also name the person you wish to become the guardian of your children in the event of your death. Finally, your will may also make your wishes known for your funeral and burial.
Your will becomes part of the public record upon your passing. If you prefer more privacy, consider a living trust.
Revocable Trust
A revocable trust, also known as a living trust, is a legal structure that protects your loved ones from the often costly and drawn out probate process. Choosing to establish a living trust allows you to remain in charge of your assets until your death. Upon your death the revocable trust will become irrevocable. Trusts offer you the opportunity to create certain conditions or parameters for your beneficiaries. For example, if you want to leave money to a grandchild, you can stipulate that their inheritance should not be received before they reach a certain age. You may also require your child to graduate from college. With a living trust you can set very specific terms.
A living trust is kept private. You will need to put all assets into the trust. Items not placed in the trust may be subject to probate.
Powers of Attorney
A comprehensive estate plan should include powers of attorney. There are a variety of power of attorneys you may appoint. A general power of attorney allows you to appoint a person of your choosing to handle financial matters for you, should you become incapacitated. A healthcare power of attorney is given power to make medical decisions on your behalf if you become incapacitated.
Advanced Directive (Living Will)
Your estate plan should include an advance directive, also known as a living will. An advance directive stipulates what type of care you want to receive at the end of life. These directives may make clear your wishes that doctors do not resuscitate (DNR) you if your heart or breathing stops. It may make clear that you do not wish to receive life sustaining nourishment (feeding tube) if you are unable to eat. These instructions let your loved ones know your wishes if you are diagnosed with a terminal illness or suffer a traumatic brain injury.
How Can an Attorney Help with Estate Planning?
An experienced estate planning attorney can be an invaluable ally when it comes to estate planning. They can draft your will, set up your revocable trust, and create your power of attorney forms. They will ensure that you are not missing any vital documents.
Your attorney can establish a living trust for you as a legal entity. In addition they can ensure that you have done what is necessary to fund the trust, and make sure that you haven’t overlooked anything. In addition, they help safeguard you from common estate planning missteps.
The Do’s of Estate Planning
- Do start now (it is never too early)
- Do talk with your loved ones about your intentions
- Do get help from an experienced estate planning attorney
- Talk with your financial advisor and accountant when estate planning
- Do create an advance directive (living will)
- Review your estate plan with your attorney annually
- Update your living trust or will to include new family members if applicable
- Do consider if charitable giving is important to you
- Do name a secondary beneficiary in case your sole beneficiary passes away
- Do include digital assets in your will
- Do keep your estate plan in a safe location, where loved ones can find it
- Properly fund your living trust
- Update your will if you’ve divorced, or a spouse has passed away
The Don’ts of Estate Planning
- Don’t delay creation of your will
- Don’t forget to include Powers of Attorney
- Don’t assume estate planning is only for wealthy individuals
- Don’t forget to get tax planning help for your estate
- Don’t leave assets to minors without naming guardianship until they become adults
- Don’t take on the burden of creating an estate plan without help
- Don’t forget to include plans for your pets
- Don’t forget to review your will regularly
- Don’t assume a living trust takes the place of a will
Get Help with Estate Planning in Pasadena
Creating a comprehensive estate plan doesn’t have to be a stressful or drawn-out process. Attorney Paul Yee has provided comprehensive estate planning services in Pasadena for more than 25 years. Attorney Paul Yee will be happy to work with your financial advisors, wealth management firms, and your accountant to design a comprehensive estate plan that ensures that your assets are distributed as you wish. To schedule a meeting with Paul Yee, call 626-799-4900 or request an appointment online.
The law offices of Paul Yee are conveniently located at 1401 Mission Street in South Pasadena, just minutes from Highland Park, Alhambra, Pasadena, Sierra Madre, Altadena, and Arcadia.
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