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What is the Purpose of Making an Estate Plan?

In simplest terms, estate planning is essentially forming a plan for the future in the event you are deceased or become too incapacitated to make critical decisions regarding your finances or healthcare. Everyone needs an estate plan, and it’s particularly important if you or your loved one is well off financially or has multiple assets they’d like to pass on. Through an estate plan, you can be confident your property, savings, vehicle, and any other assets are distributed according to your wishes.

There are many benefits to creating a comprehensive estate plan for you or a family member. Some of these include:

• Ensure your family is taken care of in the event of your death
• All assets will be distributed to the proper beneficiaries with no intervention from the courts with the use of a revocable living trust
• Prevent family discord
• Minimize expenses and taxes
• Ease the burdens of your family while they are grieving
• Support a local cause or charitable organization if you choose to
• Have a plan for incapacity so your financial and healthcare decisions can be made by the people that you choose without the need for probate court intervention
• Reduce the taxes that take place on the estate
• Name a guardian for any minor children you may have
• Provide for family members or loved ones with special needs or circumstances
• Have a succession plan for your business

Everyone Needs an Estate Plan

Although it’s difficult to think about, life is unexpected and sudden death or incapacity to you or a loved one can happen at any time. It’s common for family members and loved ones of the deceased or incapacitated to be struggling with grief because of the event. The family unit may even be destabilized due to it, but despite the heartache difficult decisions must be made during this time. The deceased person’s assets must be distributed, and all their estate affairs must be settled, but without an estate plan this can be extremely challenging.

If you don’t have an estate plan, your estate will be handled by probate court. Meaning your assets will be distributed according to State intestacy laws, which usually prioritizes spouses, children, and parents. Plus, if you don’t have a will or trust established, then disputes may occur between your family members. Depending on how contentious these disputes are, the probate process can take months and in some cases over a year to complete.

If you have a comprehensive estate plan in place, then you and your loved ones can avoid any unnecessary fighting and costs. It will also ensure your assets and wealth are protected and distributed according to your wishes.

What Estate Planning Documents are Needed in California?

The estate planning process does require you to complete a variety of paperwork. The number of documents you’ll need to complete will depend on the number of assets you own and other factors. For any size estate, it’s recommended you fill out the following:

Last Will

A legal document that takes effect upon death and is vital to ensuring your assets are properly distributed. It also names guardians for your minor children if you have any. It’s important to understand that property passing through a will triggers a probate unless your estate is valued at less than $184,500. It can be used in addition to a living trust.

Living Trust

Virtually all estate planning experts would recommend setting up a living trust if your estate is valued in excess of $184,500. You can avoid probate court with a living trust and thereby avoid expense, delay, and the public nature of the proceedings. It also allows you to avoid the need of conservatorship in the event you become incompetent or incapacitated.

Advance Health Care Directive

One of the most important documents in your estate planning arsenal, an Advanced Health Care Directive is used to clearly state your wishes regarding life-prolonging medical treatment. The document addresses hard questions like what family members should do regarding your health care if you’re put on artificial life support. This is very necessary because if you do not have one set up your family members will have to go through the cost and frustration of going through probate court and appointing a conservator.

Durable Power of Attorney for Finances

With this document, you’re able designate someone as your agent or attorney to make financial decisions on your behalf. The document essentially gives the attorney/agent the power to sign your name without petitioning probate court to have them appointed as your financial conservator.

Other important documents that may make up your estate plan include:

• Certificate of Trustee Authority and Power
• Community Property Agreement
• Grant Deed(s)
• Comprehensive Transfer Document
• Among Others

Additional Resources

Probate Code | California Statutes
Visit the official website for California’s laws and learn more about their probate code. Access the site to learn more about the process, documents that allow you to avoid probate, and other important information.

Estate Planning | Rob Bonta Attorney General
Visit the official website for California’s current Attorney General Rob Bonta to gain some insight into wills and trusts. Access the site to learn what happens if you or a loved one die without a will or trust established and more detailed information on how to set one up properly.

Estate Planning Attorneys Proudly Serving Ventura County, Los Angeles County and Central California

If properly executed, a customized estate plan could save you and your family a ton of time, money, and emotional distress. That is why we highly encourage you to get in contact with an experienced estate planning and advanced estate planning attorney at Botti & Morison if you’re interested in learning how you can protect your assets/wealth upon death or possible incapacitation.