When most Californians think about estate planning, they think about how money is going to be passed down to their family and friends upon their death. While this is true to a certain extent, estate planning has a much broader reach. For example, estate planning can include how important financial and health care decisions will be made in the event that an individual becomes incapacitated and, as a result, unable to make those decisions on their own.
Estate planning and the various issues that can arise from it can affect people of all walks of life. Although many in California may think that estate planning is mainly meant for the rich, this simply isn't the case. It can be beneficial, however, to look at how estate planning issues affect the wealthy, as it can have direct correlations with the average person.
Those in California who engage in estate planning usually do so for the sole purpose of ensuring that their hard-earned assets are protected and preserved for those who they identify as their heirs and beneficiaries. As we have discussed at length on this blog, there are a number of ways to ensure that one's estate plan is thorough, legally valid and created in a way that allows for distribution of assets in accordance with one's wishes.
No one likes to think about their inevitable mortality. Therefore, it can take a lot of will power and bravery to create an estate plan. Those in California who are able to successfully create a plan may feel like they have achieved something major, which they have, at least to a certain extent. However, estate planning is never truly done. The legal documents through which an estate plan takes shape need revisiting from time-to-time, but even the process through which the plan is discussed with beneficiaries and heirs can have a significant impact on the plan's success.
Planning for your future can be a challenging endeavor. Planning for the future of your estate, then, can seem even more difficult. However, with proper guidance and some motivation, California residents can create an estate plan that works well for them and their loved ones. Assets can be protected, taxes and fees can be minimized or eliminated, and peace of mind can be obtained. Although this planning includes addressing physical assets such as one's home, bank accounts, retirement accounts and vehicles, it also often involves intangible assets, such as social media accounts, cryptocurrency, other digital accounts and even copyrights, trademarks and patents.
It's hard to believe that pop icon Prince passed away two years ago. Since his passing, his estate has been thrust to the forefront. One reason is because it is extremely valuable, estimated at $200 million. Another reason it has received so much attention is because Prince died without any sort of estate plan. There was no will, no trusts, no direction whatsoever as to how the estate's assets should be distributed.
Although it may be uncomfortable to think about, we will all grow old and there may come a time when many of us will find ourselves unable to care for ourselves on a daily basis. While this can include the physical care of an individual, it can also include the maintenance of one's financial affairs. When a person become incapacitated and is unable to care for his or her financial estate, the court may create a conservatorship. A conservatorship allows an individual known as a conservator to manage the financial affairs for an incapacitated individual to ensure that the estate is not abused while the individual who is being held in conservatorship is incapacitated.
Estate planning may seem pretty easy at first glance. After all, to many Californians it is nothing more than deciding how to distribute assets upon one's death. While this is true to a certain extent, estate planning is much more complicated in practice. Those who fail to properly and thoroughly address all estate planning issues may be putting themselves, and their loved ones, at risk of unexpected expenses, tax implications, unwanted distribution of assets and debts and eve the loss of valuable assets.
Many people who receive inheritances from deceased loved ones are honored to simply have been remembered by the persons whose estates provided them with the inheritance. In California, a person may be an estate beneficiary through a number of testamentary devices, all of which a decedent must prepare prior to the end of their life. While in some cases a beneficiary may be aware of what their inheritance will be, in other situations a beneficiary may not know that they will receive an inheritance until their loved one has passed on.
Whether or not their estate will go through probate may not be a huge concern for some California residents, since they will not be around to see how the process affects the disposition of their wealth and assets. However, a Californian who wants to take proactive steps to protect their wealth and the inheritances of their loved ones should understand why avoiding probate this is a good idea. This post will discuss why a person should work to keep their estate out of probate and how that goal may be achieved.