A common misconception amongst Californians is that estate planning is reserved for those who have reached the later stages of their lives. Although older individuals should ensure that their estate plans are suited to their wishes, younger people can and should utilize the estate planning tools at their disposal, too. Those who realize this often turn to a simple will to ensure that their bases are covered, but those who have children may be leaving their estate vulnerable by doing so.
Laying out an estate plan is no easy feat. The challenges that often arise can come up in a variety of contexts, too. Those with blended families, young children, and a desire for asset distribution that is anything other than evenly divided amongst loved ones need to carefully consider how their estate plan is drafted to obtain desired results. While this may mean the creation of a will and a number of trusts, estate planning is about much more than just determining how one's assets will be distributed upon his or her death.
Many California parents worry about their children's futures. This can be especially true when a child has special needs. These children often need additional support that is both emotional and financial in nature.
A lot of estate planning is about avoiding the probate process. Probate is a court process through which an estate is handled after an individual's death. Through probate, an executor can be appointed for the purpose of identifying heirs and beneficiaries, paying off estate debts, and distributing estate assets.
Raising children can be a challenging endeavor. This is especially true when a child has special needs. Depending on the condition at hand, a child with special needs may require extensive medical care and social support. These needs can be long-term in nature, which is why these considerations need to be taken into account when engaging in estate planning.
Understanding the basics of trusts as estate planning tools can be crucial for California residents. Trusts are essentially agreements that dictate how assets will be managed and distributed to named beneficiaries. The creator, or grantor, of a trust can name a trustee to manage the trust. This trustee has a fiduciary duty, meaning that he or she must make decisions regarding the trust and trust assets that further the best interests of the trust's beneficiary.
We've spent quite a bit of time on this blog discussing various types of trusts. These estate planning vehicles can serve an important purpose. They can allow an individual to leave assets to others with certain restrictions applied. There are oftentimes tax advantages to utilizing a trust, too. In order to pick the trust types that are right for an individual in his or her situation, it is important to carefully consider the options.
A recent post here discussed the generation-skipping trust and how it may be beneficial to those engaging in the estate planning process. This is just one of the many trust types available to those who create estate plans. Each trust type has its own benefit, and one or a combination of a number of trusts can help bring a vision for an estate plan into reality.
As we have discussed previously on this blog, there are many estate planning vehicles that can be utilized to dictate how an individual's assets will be distributed upon his or her death. While wills are quite common, trusts can, in some instances, be much more effective when used in combination with a will. There are a wide variety of trust types available to estate planners, each serving its own purposes and carrying its own benefits. Knowing the ins and outs of each trust is critical to developing a holistic and effective estate plan.