Estate planning is one of the most important steps you can take to protect yourself and your loved ones in the event somethings happens to you or the ones you love. With offices in Irvine and Corona/Riverside, we can help you put in place an estate plan that fits your needs.
Comprehensive estate planning not only keeps you in control of your finances, it can also spare your loved ones the expense, delay and frustration associated with managing your affairs if you become disabled or pass away.
Providing for Incapacity
If you become incapacitated, you won’t be able to manage your financial affairs. Many people mistakenly think that their spouse or adult children can simply take over for them if they can no longer act for themselves. The truth, however, is that for someone else to manage your finances, they must petition a court to declare you legally incompetent. This court process can be lengthy, costly and stressful. Even if the court appoints the person you would have chosen, the individual may have to come back to the court every year and hire an accountant to show how he or she is spending and investing all of your finances.
If you want a loved one to be able to immediately take over for you, it’s essential that you work with a knowledgeable lawyer to create the proper legal documents to designate a person, or persons, that you trust so they will have the legal authority to withdraw money from your accounts, pay your bills, handle distributions from your IRAs, sell stocks, and manage your property. Many people are under the mistaken impression that a simple Will can effectively protect you in the event that you become incapacitated, but the truth is that a Will has no effect until after a person dies.
Just as important as planning for the financial aspect of your affairs during incapacity, it’s crucial that you establish a plan for your medical treatment. You may appoint someone you trust – for example, a family member or close friend to make decisions on your behalf about medical treatment options if you lose the ability to decide for yourself. But in order to have this protection, you need to have a durable power of attorney for health care in place before you become in incapacitated. In addition to a power of attorney for health care, you should also have a living will which informs others of your wishes for medical treatments such as the use of extraordinary measures should you become permanently unconscious or terminally ill.
Providing for Minor Children
Your estate plan should reflect your wishes regarding who you want to be responsible for the upbringing of your children if something were to happen to you. If you are married, you may want to create a plan that allows your surviving spouse to spend more time with your children if you are no longer there. You may want to create a plan that allows your spouse to take care of your children without having to worry about working, keeping the home you have built or other financial obligations. You may also want to put into place reliable resources for your spouse, if you believe they lack the experience or ability to handle financial and legal matters.
If you are not married or divorced and have children, your estate plan should still reflect your wishes on how your children are cared for and by whom. You may want to ensure that your children receive their inheritance free from the influence of others and use it in the manner and for the purposes that you intend.
Your estate plan should also consider the possibility of both parents dying simultaneously, or within a short duration of time. Your planning should include a list of persons you’d like to care for your children and manage your assets for their benefit in your absence. You should know that the person, or trustee, in charge of the finances does not need not be the same person as the person who takes care of your children. In fact, in many situations, you may want to purposely name different persons for each of these functions in order to best protect your children.
A proper estate plan, gives you time to think about who you would want to raise your children, ensuring that he or she shares your values that you want instilled in your children. You will also want to consider the age and financial condition of any potential guardians. Some guardians may not have the child-rearing skills you believe are important. If you fail to set your wishes out in a proper estate plan, the decision as to who will manage your finances and raise your children will be left to a court of law.
As part of your plan, you should decide whether you want your beneficiaries to receive your assets directly, or to have some, or all, of your assets placed in trust and distributed to them subject to conditions and circumstances such as age, need and even incentives based on behavior and education. You are the best persons to decide whether your children are mature enough to receive substantial financial benefits and your estate plan should reflect your wishes.
Charitable Bequests – Planned Giving
Your estate plan should take into account any wish you have to benefit a charitable organization or cause. With proper planning, your estate plan can be structured to provide generous support for such organizations in a variety of ways, either during your lifetime or at your death, as you see fit. Depending on how your planned giving is set up, you may also set up your gift in a manner so as to receive a stream of income for life, earn higher investment yield, or reduce your capital gains or estate taxes.
A well-crafted estate plan should provide for your loved ones in an effective and efficient manner by avoiding guardianship during your lifetime, probate at death, estate taxes and unnecessary delays. You should consult a qualified estate planning attorney to review your family and financial situation, your goals and explain the various options available to you.
Once your estate plan is in place, you will have peace of mind knowing that you are providing for yourself and your family.