The purpose of estate planning is to prepare clients and their families for the possibility of incapacity and death. There are several different estate planning tools you can use for your plan, depending on the goals you have for the future. An experienced and qualified estate planning attorney can help you choose the right tools for your estate plan.
Planning for possible incapacity
Incapacity can be the result of a medical condition or an injury. The legal concept of incapacity refers to the ability to understand the potential consequences of a legal proceeding. However, when you are dealing with estate planning issues, incapacity refers to a person’s ability to manage their own affairs and make their own decisions.
In addition to mental incapacity, your inabilities can also be physical in nature. Whatever makes it difficult or impossible for you to take care of your own affairs. Without an estate plan that addresses incapacity, the court may end up appointing a court-supervised conservator to take care of you.
Advance Health Care Directives can be used for incapacity planning
An Advance Health Care Directive is simply a legal document that allows you to delegate medical care and treatment-related decisions to someone else in the event you cannot make them yourself. Advance directives permit you to choose someone to manage your medical decisions. They are created so that they take effect even in cases of temporary incapacity.
Using a Financial Power of Attorney as part of your incapacity plan
Along with medical decisions, incapacity may also require the need for assistance in handling financial matters. For this type of assistance, you will likely need a Financial Power of Attorney which allows you to select someone you trust to manage your affairs. Ask your Sacramento estate planning attorney about your options.
Planning for your death
The second purpose of estate planning is to decide how you want your estate to be handled after your death. One of the primary estate planning tools that accomplishes this is the Last Will and Testament. A Will is a set of written instructions regarding how you want your estate to be distributed upon your death. A Will can also nominate a guardian for your children in the event you pass away while they are still minors. One disadvantage of a will is that, except for modest estates, the property must go through probate before the assets in your estate can be distributed. To avoid expensive court proceedings in the event of incapacity or death, a comprehensive living trust-based estate plan is the best choice for most people.
The basics of estate planning
Estate planning involves simply creating an advance plan naming those individuals you want to receive your property when you die. Proper estate planning should also be able to do the following:
- Include instructions for your care if you become disabled or incapacitated before your death,
- Select a guardian and manager for the inheritance of minor children,
- Provide for loved ones with special needs while preserving eligibility for government benefits
- Provide for loved ones who may need assistance managing money or who may need protection from creditors
- Include life insurance policies for your surviving family, disability income insurance if you become unable to work, and long-term care insurance to assist in financing your medical care in case of an extended illness or injury.
The time to start your estate planning is now
Many clients put off starting on an estate plan because they believe they are too young or they don’t have sufficient assets in their estate. But, in reality, no one can predict how long they will live, or whether they will suffer from an illness or accident that leaves them incapacitated. For that reason, estate planning should be a priority sooner rather than later. Once disaster strikes or the unexpected happens, it may be too late. The families of clients who don’t plan ahead are left to pick up the pieces, often without any idea how to start.
Estate planning is not that expensive, especially when you compare it to the costs of legal proceedings and unnecessary taxation that can be avoided with good planning.
If the prospect of proper estate planning seems too expensive or overwhelming, you can always begin with a simple initial plan and add to it as appropriate. This is especially true for single individuals or young families. A smaller family structure may only require a will, term life insurance, and powers of attorney for assets and health care decisions. As your needs and the needs of your family change, you can always develop your plan as necessary. An experienced and qualified estate planning attorney will be more than capable of providing the necessary guidance and peace of mind you will need to guarantee you and your family will be provided for in the future.
Download our FREE estate planning checklist! If you have questions regarding the purpose of an estate plan or any other estate planning needs, contact the Northern California Center for Estate Planning and Elder Law for a consultation, either online or by calling us at (916) 437-3500.