Estate planning is not only for wealthy persons. Although it is commonly believed that an estate plan is only advantageous for those who have numerous assets, it really is beneficial for anyone who wants to prepare for the future. A properly drafted and funded estate plan can save your loved ones time and money in the long run.
Here are just a few reasons that you should consider an estate plan:
Avoid Intestacy Distribution
If you have assets but do not provide instructions for how those assets should be distributed upon your death, the State of California will make the decision for you. If you die without a Last Will and Testament, your assets will be distributed in accordance with California’s intestacy laws, which may result in unintended outcomes. For example, if you are married and have children, but you have no Will, your community property will all be distributed to your spouse, and any separate property will be distributed half to your spouse and half to your child (if only one child) or one-third to your spouse and two-thirds to your children (if more than one child).
Executing a revocable trust as part of a comprehensive estate plan allows you to avoid probate and is generally more efficient than the probate process. This is because distribution of assets held in a trust do not require court oversight or formal court hearings and can be distributed quickly upon death. In California, the probate process can take a minimum of seven months and often lasts for one to two years, while a trust administration can typically take from four to six months.
Plan for Care of Minors
If you have children who are minors, you most certainly desire to protect them and provide financial assistance to them in the event of your death. In your Will, you can nominate a guardian of the person to handle the personal care of your children until they reach the age of majority. Funding a properly drafted trust will allow you to protect assets for the benefit of your children until they reach a certain age. Such a trust may contain instructions to a trustee on when payments can be made and under what conditions.
If you have questions or are interested in discussing the advantages of establishing an estate plan, please contact us.