Estate planning is often viewed as the process through which a plan is devised to address property distribution upon one's death. While this certainly makes up a large portion of estate planning, dealing with assets is not the only matter that needs to be addressed. As part of their estate plan, California residents should also think about what they need to do in order to ensure that they can afford long-term care costs, should the need arise.
Recently on the blog we discussed the blind trust. This type of trust is just one of the many trust options available to those who engage in estate planning. Fully understanding the benefits of each type of trust is critical to allowing an individual to make fully informed decisions with regard to what is best for them, their estate and their heirs.
We've spent a considerable amount of time on this blog discussing the various trust options available to Californians. Deciding on trust options that are right for you can be critical to the success of your estate plan, including the financial well-being of your heirs and the trust beneficiaries. This usually means that you and your heirs want to keep a close eye on how these trusts are managed, but sometimes that's not in your best interests. Sometimes, in fact, it might be wise to have absolutely no idea about how a trust is being managed.
Sacramento readers of this blog are familiar with the basic concepts of estate planning. They also likely recognize the important role that trusts can play in this planning process. Depending on one's unique set of circumstances, specific types of trusts can prove beneficial in furthering one's goals with regard to asset distribution upon death.
Holistic estate planning can address many issues. It can determine how your assets will be distributed upon your death, who will make your health care decisions in the event that you become incapacitated and even who will administer your estate. There are many decisions involved, and they can have a tremendous effect on the futures not only of the estate, but of those touched by the estate as well. Therefore, it is crucial that those who are engaging in estate planning ensure that their legal documents are thorough and specific, so that their estate is handled in accordance with their wishes.
Much of estate planning is about avoiding unnecessary costs so that one's beneficiaries can receive the assets that a testator wants them to receive. It sounds easy enough, but estate planning can be challenging and, for many in Sacramento, confusing. One reason is because there are so many estate planning options and tools at one's disposal. It is therefore wise that those considering developing a new or modifying an existing estate plan inform themselves as fully as possible before moving forward.
Trusts may be created in two main ways. The first is at the end of a person's life. When a person passes on their estate may pass automatically into a trust if they have executed the appropriate estate planning documents. However, a person can also create a trust while they are alive. An inter vivos trust, also known as a living trust, is created by a grantor and administered by a trustee for the benefit of a beneficiary.
It is an unfortunate fact that some individuals struggle to care for themselves and to hold down jobs that provide them with necessary income. Often individuals in these difficult scenarios suffer from disabilities and are eligible to pursue financial support from the government. Californians with certain disabilities can receive insurance and financial assistance from the Social Security Administration and other governmental organizations.
A trust can be revocable or irrevocable. It may be a constructive trust or an express trust. It can be created to protect the financial interests of the beneficiary through a spendthrift trust or it may be set up to benefit a charity rather than a specific person or group of people. There are numerous ways that people in California can set up their trusts, and in turn, numerous ways that they can make trust planning mistakes if they fail to take the appropriate considerations when establishing these important estate planning tools.
It seems like every family has one: a person who cannot manage their money or who spends money in a loose or even reckless manner. They may be well-intentioned, but Californians who wish to leave such individuals assets from their end of life estates may fear that the beneficiaries will squander their inheritances and dispose of their accumulated wealth in an irresponsible manner.