We have been writing about estate planning topics for a long time on this blog, but our in-depth exploration of the field can leave newcomers wanting. In an effort to provide people new to the field a foundational understanding of estate planning, over the coming days we are going to look at some basic issues. If you are new to estate planning, or just want to give yourself a better grasp of the topic, you will want to follow along with our series.
To begin, let’s take a look at what, exactly, estate planning is all about.
Estates and Estate Planning
The first thing you should know about estate planning is, obviously, what an estate is. When lawyers talk about your ‘estate,’ they’re not talking about a large parcel of land or a big house. An estate is simply what you leave behind after you die, or after you become incapacitated. Regardless of your circumstances, everyone has an estate.
Estate planning, therefore, is the steps you take while you are still capable that will control what happens to your estate. Part of estate planning, for example, involves looking ahead to the kind of property you will leave behind and making decisions about how you want to pass that property on as inheritances.
Everyone Has an Estate
One of the most common questions estate planning attorneys get revolves around age. Many people naturally assume that only old people have to worry about estate planning. After all, you don’t have to think about what happens after you die until you’re closer to the end of your life, right?
Wrong. Whether you realize it or not, you already have an estate plan. The law gives you the ability to make choices about your estate while you are a capable adult, but it also recognizes the reality that most people never get around to making a plan of their own. So, because people dying without a plan is the norm, the law has effectively created a default estate plan that applies. In other words, you already have an estate plan chosen for you by the laws of the state of California. If you don’t take the time to make your own estate planning choices, these laws will determine what happens to your estate whether you like it or not.
Estate Planning is About Family
Your death or incapacitation will be traumatic for your family and loved ones. In their time of need, having a comprehensive estate plan in place is one of the best things you can do for them. An estate plan gives you the chance to answer important questions and leave clear instructions about your wishes. Should you not have a plan, you will leave it up to your family to make many decisions without your guidance.
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- IRS Confirms Grantor Trust Status Alone Does Not Cause a Step-Up in Basis - September 23, 2023
- National Make-a-Will Month - September 21, 2023