Estate planning is one of the most important things you can do for the benefit of your loved ones, making sure they get their rightful share of your wealth and property if something tragic happens to you. This may not be something that crosses a typical person’s mind on any given day. When you’re running late for work, have that important deadline to meet, or are rushing to get your child to a sports practice or a dance recital on time, the idea of your passing seems far off and abstract.
The truth is, estate planning is one of the most important things you can do in your life to take care of your family. It creates a contingency plan so that you know, should something happen to you, your family will have the means to keep up the lifestyle they deserve after you are gone. Estate planning is one of the best gifts you can give them.
Many people assume that their property and wealth will simply go to their loved ones or children automatically. It is not always that simple. The laws are complicated and even vary from state to state. If no plan is set in place, the question of what happens to your property and money will have to go through probate courts. With carefully made plans, this can often be avoided.
How to Create a Plan for Your Estate in Sacramento
Estate planning is, essentially, that plan. It is a collection of legal documents dictating how your wealth, property, and other assets will be divided up among your family and loved ones upon your death. An estate plan includes directions for the whole package of things you leave behind, and the more detailed these instructions are set in the beginning, the smoother things will go after your passing.
Talking about death can be unsettling. However, it is an important and necessary topic. This may mean that you will have to bring up uncomfortable topics with your spouse. No one likes to think about their own death, and the thought of a spouse, parent, or other loved one dying may be even worse. Discussion of these plans with children means that they must face the fact that they may someday have to live in the world without their parents. However, if one looks at the situation in the context of leaving what you have to the next generation as a gift, the topic of estate planning becomes more about love.
When to Start Estate Planning?
As anyone with busy work life and personal life probably knows, things run more smoothly with a plan. And, just like everything else in life, passing on your assets needs a plan too. The better the plan, the more smoothly things will run. A well-thought-out plan means that your loved ones will receive your wealth in the exact way you want them to, leaving out expensive court and lawyer fees, as well as minimizing the payment of taxes. A strong plan made with the help of an estate planning attorney will make sure that everything is in place when you and your family need it. This is most important because you never know when you’ll need it. In this way, estate planning is more important than planning to buy a new car or to renovate a garage. The answer to the question of when to start estate planning is as soon as possible.
I Have a Will. Isn’t That Enough?
What is the difference between a will and estate planning? A will is a legal document that tells the probate court what to do in the event of someone’s death. The will may dictate who receives your assets when you die.
If you have minor children, you can set up in your will who will be the guardian of those children. What’s more is that in the unfortunate event that you can no longer competently raise children, then it makes sure that the people you trust the most and designate will be raising your kids. Things you will want to consider are what values these people will raise your children with, if they have the means to provide the lifestyle your children are accustomed to, and if they will give your children the love and support they need to heal and move on. You will never be forgotten, but in the event of your death or incapacitation, certainly, you will want the best people there to make sure your children can reach their full potential and have the security they need to mature.
A will can indeed stipulate both assets inheritance and establish guardians for children. That brings us back to the original question: Isn’t a will enough? The short answer is probably not. The truth is, estate planning is so much more than just a will.
When it comes to making a will vs. estate planning, you can think of it this way — a will can be part of estate planning, but estate planning is much more than just a will. You may want to think about estate planning as an answer to questions that the people closest to you will have when the time comes for you to no longer be there, be it death, severe disability, or other incapacitation. Only having a will means that you do not have a plan set in place for who will be in charge of your medical choices or your finances if you are incapacitated but still alive.
Questions That Will Arise After Your Death or Incapacitation
We’ve covered that Estate Planning will lay out decisions for who will take care of your children and will dictate how your wealth is distributed. However, an estate plan would cover much more. Consider some of these common concerns in more detail:
- Who will get my assets? You don’t want to make any assumptions when it comes to who will get your wealth. Will it be your spouse, your children, or someone else? What other relatives or friends do you want to leave something to? Without a well-laid plan, these questions will go to the courts, which can mean expensive lawyer and court fees for issues that could have been avoided. Additionally, someone you don’t want to have a piece of your inheritance may get something if this has to go through the court system.
- Who will make decisions for my health if I am unable to do it for myself? An advanced health directive, also part of estate planning, will let everyone know who you want in charge of decisions about your health if you are unable to make these decisions yourself. The person you select may have to make many different decisions for you. Just a few scenarios could include being in a coma, suffering from dementia, or perhaps what measures to take in the case of brain death.
- How should creditors be paid? What you owe creditors upon your death is very complicated, and you will want a plan so that creditors get paid the way you want them to be paid. That is, you may want money from savings, stocks, or bonds to pay off a debt instead of a piece of your estate. You may want a car sold instead of a treasured family heirloom. Setting this up in advance means that your debts are covered your way, not a way dictated by the courts or credit companies.
- What will your legacy be? You’ve worked hard all your life, living up to the values that you’ve set for yourself, perhaps instilled in you from your parents or grandparents, educators, and religious leaders. You may have strong political views and passions for causes that make the world a better place. With estate planning, you can help your vision and beliefs live on after you’re gone. By leaving money or assets to the charities you care about, scholarships to help the next generation, religious and educational institutions that you believe in, you perpetuate your values long after you are gone.
Should I Have a Trust or a Will?
A will and a trust are two very different things. A will may, in some cases, be cheaper and easier to set up. However, a will must go through the probate court. That is to say that the government will always be involved after you die if you only have a will. This process will always cost your heirs money, whether it be court fees, lawyers’ fees, and/or paying to resolve legal disputes that may still arise even with a will in place.
On the other hand, a trust is a collection of legal documents that keep the courts out of the transition of your assets to the people you want to have them after your death. A trust also keeps the government out of this transition process. With a will, all your assets and finances will be public record because everything has to go through the court. If privacy is a concern and you don’t want other people to see your finances and other family matters – and the whole world can see it through the court system – then a trust may be the best option for you. In many cases, a trust may be more expensive to set up initially, but much easier on your heirs after your death.
I Don’t Have a Huge Amount of Wealth. Do I Need an Estate Planner?
Just because you aren’t super wealthy does not mean that you do not need an estate plan. In fact, just the opposite is true. Having fewer assets means that you want every single dollar of your money to go to the people you want it to go to. With the right estate planning attorney, you can avoid thousands of dollars in court fees and lawyer bills for your heirs later because you have made sure in advance that your assets go into the hands of the people who will need them. Just because you’re not a part of the top 1%, that doesn’t mean that people need to see your finances in the public record, either. That is your business, and an estate planning attorney can help it stay that way.
Do I Need an Estate Planning Attorney?
You want control of your finances and what is left to the people and organizations your care most about and not to the whims of an unpredictable system. You want to minimize the tax burden to your loved ones so that they’re not paying any more money in taxes than they are legally responsible for, and you want to get your assets to your heirs in the quickest possible manner. An Estate Planning Attorney is the safest way to make sure that you have an air-tight plan so that all your wishes are fulfilled as you leave your belongings in the hands of your children, relatives, friends, and causes you believe in.
If things get tied up in court after you’re gone, it could cause trauma and emotional turmoil to those you care most for. The best thing you can do to ensure peace of mind for the future is to hire an experienced estate planning attorney so your wishes are planned out to the fullest.
You show your family love every day, and estate planning with the safety net of an estate planner means that you will continue to show them love long after you’re gone. Contact Huber Fox, P.C. for more information.
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