Most people recognize the need to have an estate plan in place; yet, surveys indicate that over half of all Americans don’t have one. Numerous reasons are offered for the seeming incongruity, including the simple fact that estate planning can be intimidating to the uninitiated. When should you start planning? How do you get started? What documents are the most important? At the Northern California Center for Estate Planning & Elder Law, we offer suggestions and information that may help you to get your estate plan started.
Why Creating an Estate Plan Is So Important
It always helps to motivate people if they have a better understanding of why creating an estate plan is so important. The importance of estate planning, in turn, can best be illustrated by discussing what can happen in the absence of a plan. Without an estate plan in place, imagine the following:
- Your unexpected death leaves behind an intestate estate. The State of California intestate succession laws dictate how your estate is distributed, meaning you have no say in who gets your assets.
- You are involved in a tragic accident that leaves you incapacitated. A judge has to decide who will make heath care decision for you and who will control your assets after a bitter and divisive battle between your loved ones.
- Your untimely death results in a battle among family members over funeral plans and a struggle to fund the service and burial. Sadly, you wanted to be cremated and didn’t even want a service; however, without an estate plan in place, no one was sure what you wanted.
- You leave behind a decent inheritance to your minor children; however, because they cannot inherit directly from your estate, and you failed to plan ahead, your ex-spouse is put in charge of managing their inheritance, something you would never have done.
These are just examples of numerous and varied unwanted consequences of failing to create an estate plan. With that in mind, why not get your plan started?
Estate Planning Basics
Every estate plan is unique because it should be geared to achieve the unique goals and objectives of the person creating the plan. There are, however, some common steps most people take when creating their first estate plan, including:
- Define your goals. Deciding how you want your estate assets distributed in the event of your death is only one estate planning goal. Most people include additional goals, such as:
- Incapacity planning
- Asset protection
- Protecting a minor child’s inheritance
- Special needs planning
- Medicaid planning
- Business succession planning
- Funeral and burial planning
- Assess your assets. You probably have a general idea of your overall financial picture; however, for estate planning purposes you should make a detailed list of all assets and debts. Include pertinent information such as where the asset is located, passwords for accessing accounts, and payoff or payment information.
- Consult with an estate planning attorney. In today’s electronic age it can seem tempting to use DIY forms you find online. Ultimately, using DIY forms will likely cost your loved ones a considerable amount of time and money when those forms actually need to be used given the high probability that they will be riddled with mistakes, errors, or missing information. Instead, spending a small amount of time and money now on retaining an experienced estate planning attorney to assist you will save your loved ones a considerable amount of grief down the road.
- Execute documents. You will likely create, at a minimum, a Last Will and Testament. However, unless your estate is very modest, additional estate planning documents such as a trust agreement, advance health care directives, and a power of attorney will likely be needed to avoid costly, burdensome and time consuming court proceedings. Once you have executed these documents, the original documents should be kept in a secure place known to and accessible by your successors.
Contact California Estate Planning Attorneys
Please download our FREE estate planning checklist. If you have additional questions regarding how to get started on your estate plan, contact us at the Northern California Center for Estate Planning & Elder Law today by calling (916)-437-3500 or by filling out our online contact form.