Estate planning involves taking steps to protect assets so they can be passed along to heirs upon death. The kind of planning required depends on the type of assets that are owned. Some possessions can be transferred by filling out a simple form while others involve more complex steps.
One of the most important estate planning strategies is writing a will and testament. This document is used with probate estates and trusts. Wills provide information about who should receive inheritance property.
The most important reason to engage in estate planning is to avoid probate. Probate is required to record a person's death and settle their estate. Having a Will is essential for expediting the probate process. Anytime a person dies without leaving a Will, their possessions are given to heirs in accordance with state probate rules.
In addition to writing a will and testament, people should also setup power of attorney forms and healthcare proxies. These documents are needed to grant authority to another person to take care of financial and medical matters if tragedy strikes.
There are several types of power of attorney forms and each serves a valuable purpose. General power of attorney is most often used with estate planning because it grants broad powers to personal agents.
Limited and special power of attorney is used when agents only need to perform a limited number of duties. These POA forms might be used to give permission to agents to pay bills from a checking account or make deposits or transfers into investment funds or retirement accounts.
Healthcare proxies and medical power of attorney are important elements of estate planning. These forms let agents talk with physicians regarding medical treatments and procedures. Agents are not allowed to get involved with medical decisions until a physician makes a written claim that a person is incapable of handling their affairs or making medical decisions.
People that are responsible for taking care of minor children ought to make estate planning a top priority. Wills are needed to establish legal guardianship and provide directives regarding how inheritance property should be protected until children reach adulthood.
One popular asset protection method is establishing a child trust fund. Most people find it easier to work with an estate planning service to setup trusts. There are various kinds of trusts for children including custodial accounts, 529 plan education savings accounts, and testamentary trusts.
In general, trusts are the safest strategy for keep property out of probate. The living trust is one of the most commonly used, but there are numerous kinds. It's advisable to consult with probate and trust attorneys to find out which kind is most appropriate for your needs.
Ownership of property such as real estate, cars, businesses, and financial investments is transferred to trusts and managed by a Trustee. This is typically the person creating the trust, but could also be another person or entity, such as a law firm or estate planning service.
Trusts are a good option for people that want to lessen estate tax liabilities. They are also ideal for bequeathing money to minor aged children. Since trust property is owned by the trust it isn't part of the estate and doesn't have to pass through probate.
Engaging in estate planning doesn't have to be hard. The process can be simplified by getting guidance from probate and trust attorneys, such as Craton and Switzer. We remove the confusion surrounding wills, trusts, and probate to help our clients make informed decisions.
We encourage you to stop by our probate and trusts blog to learn more about the benefits of estate planning. If you're in need of probate lawyers in Southern California call us today to schedule a consultation.
Published on March 15, 2012