Caring.com is a popular website that has been conducting annual surveys to gauge estate planning preparedness. They consistently find that two out of every three American adults do not have estate plans in place.
Researchers drill down further and ask additional questions to gain insight. When these people are asked why they did not take action, many of them say that they don’t know where to begin.
With this in mind, let’s take a look at the basic rudiments of an estate plan to demystify the process.
Asset Transfers
The first order of business is to make sure that your loved ones receive the inheritances that you would like to leave to them. A lot of people think that this is done through the use of a simple will, and this is definitely a possibility.
However, you should understand some facts about wills before you decide that this is the best way to go.
Will Drawbacks and Limitations
A will is admitted to probate, which is a court-supervised process. During probate, the executor pays final debts, and the court validates the will. No inheritances are distributed while the estate is being probated, and it will typically take at least nine months.
This is a public proceeding, so the records can be accessed by interested parties. Thirdly, probate expenses consume a noticeable portion of an estate in most instances.
Trust Options
If all the above does not sound very appealing, there are other possibilities, and a revocable living trust is one of them. When you use this type of trust, you are the trustee while you are living, so you maintain control of the assets.
During the trust creation process, you name a successor trustee to assume the role after your death. When that time comes, the trustee will follow your instructions and distribute the assets in the manner that you have dictated. The probate court would not be involved.
This is just one of a number of different types of trust that can be utilized. The right choice will depend on the specific circumstances, and we can help you understand your options.
Incapacity Planning
A well-constructed estate plan will also address end-of-life eventualities. It’s not a very pleasant subject to contemplate, but incapacity is not uncommon among elders. Alzheimer’s disease alone is enough to get your attention because it strikes over 30 percent of the oldest old.
If you don’t take action to address this possibility in advance, the state could appoint a conservator to manage your affairs if you become unable to do so yourself. Most people would prefer to avoid this fate, and you have the power to do just that when you plan your estate.
A living will is a document that is used to record your life support utilization preferences. You can itemize each different technique if you choose to do so. Organ and tissue donation choices and comfort care medication directives can be added as well.
Medical scenarios can arise that are not related to life support when you cannot communicate. To account for this possibility, your incapacity plan should include a durable power of attorney for healthcare.
The agent that you name would be empowered to make decisions on your behalf if necessary. However, you have to add a HIPAA release to give your agent the authority to access your medical information.
From a financial perspective, if you have a living trust, you can name a disability trustee to assume the role if necessary. To account for assets that are not held by a trust, you can add a durable power of attorney for property.
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We conduct webinars and other events on an ongoing basis that share important information. There is no charge to attend these events, and you can visit our special events page to learn more.
Need Help Now?
If you already have learned enough to know that you should work with a Petaluma, California estate planning lawyer to put a plan in place, our doors are open. You can send us a message and we can be reached by phone at 707-769-9975.
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