Who Needs Estate Planning?
Though it can be difficult to think about death and dying, effective planning is the best way to avoid any unpleasant misunderstandings after you pass on.
What is Estate Planning?
The question of what estate planning is essentially a question of what will happen to your possessions when you die. Though it is sometimes uncomfortable to think about our own mortality and what will become of the assets and belongings we have acquired when we are no longer here, it is a necessary part of planning for the future.
However, estate planning is not only for after you pass away. A good estate plan will contain instructions for how to deal with your affairs if you go missing or become incapacitated as well.
A solid estate plan includes at least the following documents:
- Durable Power of Attorney
- Health Power of Attorney
- Living Trust
- Living Will
- Last Will and Testament
Additional documents may be necessary as well, according to your specific circumstances.
How Does California Differ From Other States?
While there are certainly some best practices in estate planning that transcend state borders, there are a few special considerations for California residents. For example, probate court costs are much higher in California than in other states. It is best to have a solidly built estate plan so your descendants will not need to resort to probate court to settle your affairs.
Do I Need an Estate Plan?
If you find yourself asking, “Do I need an estate plan?” Then the answer is almost certainly yes. The issue of who needs estate planning or doesn’t can be resolved simply by asking whether that person owns anything of value. In short, anyone who owns assets such as a house, car, or financial instruments, needs estate planning, and the sooner the better. Furthermore, many attorneys would argue that anyone over the age of 18 needs an estate plan.
Even if you are young and healthy, there are unpredictable forces, such as traffic accidents and natural disasters that can occur at any time. Though that may sound a bit macabre, the point here is that you need to have a plan in place in order to help your loved ones sort out your assets should such an emergency take your life. Without estate planning, your assets may become a point of contention among your relatives or descendants, and the last thing you want to leave behind is a messy legal battle.
Different people need different types of estate planning depending on their circumstances. Some of the most common are detailed below.
Estate Planning for Blended Families
Bringing families together is never without its challenges. When there are children from former relationships to be taken into account, things can get a little complicated in terms of ensuring all children are properly accounted for in an estate plan.
One important additional issue to address in these cases is who will be responsible for caring for each child if one or both parents die. A document called a designation of guardianship needs to be added to these types of estate plans. It is also advisable to sign a prenuptial agreement when remarrying to avoid any complications in providing for the care of all children involved.
Estate Planning for Childless Couples & Individuals
The major question on the minds of many individuals and couples without children is who should inherit their assets should one or both of them die. A common solution is leaving a percentage of the assets to the partner and distributing the remainder between relatives and/or charities. The question of which family members and charities, and how much to designate for each, is best resolved with both spouses and an experienced estate planning attorney present. Other special considerations for people without children are the costs of nursing homes and elder care services when you can no longer live independently.
Estate Planning for Single or Divorced Parents
In the event of a divorce, there is a wide range of outcomes that might best suit your needs. When both parents are amicable, and custody is shared, these parents will likely be designated guardians in the estate plan. If you are not on speaking terms with the other parent of your child, however, you’ll need to designate a guardian and likely a trust for your children in your estate plan. Single parents should also have HIPAA waivers on file for the trusted people they’ve selected to have access to their medical records in case of an emergency.
Estate Planning for Business Owners
In addition to providing for the needs of family and dependents, an estate plan for business owners needs to include clear instructions for who will take over ownership and management of the business. You may wish for the business to be sold after your death and the profits distributed among your dependents or to pass ownership on to one or more of your relatives or employees. A succession plan should be created with a knowledgeable estate planning attorney in order to specify who gets control over what facets of the business, which key employees should be retained, and so on. It is crucial that your business be included in your estate plan, as things can get very complicated very quickly without one.
Estate Planning in California
The takeaway message here is that estate planning is complex, and each person’s specific needs are unique. It is strongly recommended that you hire an estate planning attorney to help you create an estate plan that is thorough and legally binding in order to protect your assets and your loved ones. Here at Castro Law we specialize in all facets of family law and are ready to help, so give us a call to schedule a confidential review of your case today.
