You most likely just finished up your holiday celebrations and you may have celebrated the holidays in a lot of different manners. I know that when I got married the way my wife had celebrated holidays was different than the way I had celebrated the holidays. I was an only child from divorced parents whereas my wife was the second of five children to a family that had multiple generations living in nearby. My celebrations consisted mainly of dividing my time between my mother’s house and my father’s house during the holidays. Plans were easy because they were plans just for me. My wife, on the other hand, had to plan around her five siblings and had always traditionally gone to both her maternal and paternal grandparents’ houses with all her siblings.
Holiday celebrations are a lot like estate planning. Each plan is different for each family situation. While a family with only a primary residence and minor children will not need the same plan as a family that owns a large corporation, without a plan either family would be lost.
Often people hear the word “estate” in the phrase “estate plan” and picture an English manor with a gated driveway, but everyone has an “estate” legally speaking. Don’t think that you are not ready to create an estate plan because you do not yet have a personal driver and a Rolls Royce.
What are the benefits of an estate plan?
Once you understand the basic reasons for having an estate plan, you will realize that an estate plan really is for everyone. There are several reasons one would want to create an estate plan and I want to list a few: beneficiary protection, creating a plan for if you become mentally incapacitated and can make your own decisions, making a plan for when you pass so your loved ones know what to do with your assets, cost savings (both tax savings and court costs), making any emergency situation as smooth as possible, making a plan for minor children, making a plan for pets. Again, this list is as different as each family.
Avoiding probate (the court process that controls when you do not create an estate plan) is often cited as one of the main reasons people create an estate plan. Often clients will come to me after having to suffer through the court process for a loved one. The fees, hassle, loss of control, and loss of privacy are some of the most oft cited problems with the probate process by my clients. Probate cannot be avoided by creating a will alone. A trust is the only way to completely avoid probate and even a trust can sometimes be brought into court if it is not well-crafted.
What are the basic building blocks of any good estate plan?
The next logical question is, if most people need at least a basic estate plan, what does a basic estate plan look like? What are the foundational elements of an estate plan? A basic plan consists of a will, a trust, a power of attorney, health care documents, along with proper transferring of assets (often called funding). If these elements are all executed properly, your family can have a comprehensive estate plan that will minimize the troubles your family will face when there is a family emergency.
People often put off creating an estate plan because they think the process will be long and confusing. We have a four-step process that will get you and your family the estate plan that your family needs and deserves. Call us now at 951-304-3431.