The many goals of estate planning in California


The term "estate planning" refers generally to the process of making preparations for the management of one's assets in the event of incapacity, and the distribution of assets to heirs and beneficiaries upon death. There are several important goals that should be considered by any California resident entering into the estate planning process.

In California, the cost of probate proceedings is very high, and avoiding probate is an important goal of estate planning for many people. In many cases, this can be accomplished through the use of a living trust.

For people with large estates, avoiding unnecessary taxation is another important goal of estate planning. As we discussed in an earlier post, California no longer has an estate or inheritance tax, but the federal estate tax still applies to estates worth more than $5,430,000. An experienced estate planning lawyer can advise a client on a number of legal strategies to avoid or minimize federal estate taxes.

Preparing for the possibility of physical or mental incapacity is another important goal. With a durable power of attorney, a trusted individual can be given authority to manage one's financial affairs. With a living will, an individual can appoint a health care agent and set forth preferences for health care, including end-of-life care.

Other goals of estate planning include nominating guardians for minor children; setting up an annual gifting plan to reduce the size of the taxable estate; and designating beneficiaries of non-probate assets such as life insurance policies.

California residents who are beginning the estate planning process have a lot to think about and a lot of decisions to make. Fortunately, an experienced estate planning lawyer can help them make the decisions that are best for them and their families.

Source: Investopedia, "Estate Planning," accessed Nov. 20, 2015

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