The Best Time for an Estate Plan

 In Blog, Estate Planning

If you are wondering when the best time to discuss an estate plan with a California estate planning would be, it would be now. Everyone over the age of eighteen needs an estate plan to protect themselves, their property, and their families. While certain life events might trigger someone to think about an estate plan, it is better to act now while you have the luxury of time on your side.

In this article, we will review several topics related to estate planning and give you some examples of why now is the best time for an estate plan. Highlights from this article include:

  • How Do I Know I Need an Estate Plan?
  • What Happens If I Don’t Have an Estate Plan
  • Benefits of Developing an Estate Plan Right Now
  • Do I Need an Attorney to Help Me with an Estate Plan?

How do I know I need an estate plan?

Do any of the following statements apply to you or your life:

  • I have minor children
  • My adult children have special needs
  • I have children who have financial problems
  • My family or I own a business
  • I don’t have living children
  • I own real estate in more than one state
  • I have assets in foreign countries
  • I have a disabled family member
  • I am divorced or in a second (or subsequent) marriage
  • I have substantial assets in my retirement accounts
  • I own substantial assets
  • I want to leave money to charities, friends, or distant relatives
  • I recently lost a spouse or close family member

If one or more of the above circumstances apply to you, then you could benefit from speaking with a California estate planning attorney. Each of the above situations is an example of why you need an estate plan now. The situations above are complex estate planning issues that need to be addressed through your estate plan to ensure that your wishes are carried out and that your loved ones and family members are protected after your death.

WHAT HAPPENS IF I DON’T HAVE AN ESTATE PLAN?

An estate plan provides for the payment of your final debts and the distribution of your property after your death. If you do not have an estate plan, California’s intestate laws dictate who may inherit property from your estate. Friends and charities are not considered heirs under intestate law. Therefore, if you want to leave a portion of your estate to friends or charities, you must have a valid will dictating your wishes before your death.

Intestate laws also dictate the division of your property among your heirs. The statute has a specific lineage for intestate succession. Since California is a community property state, the statutes separate the division of property into community property, quasi-community property, and separate property. As a result, determining the ownership of property after a person’s death is crucial in an intestate situation.

Without an estate plan, the state dictates who receives your property and how much of your property each person receives. For that reason alone, the best time for an estate plan is now. You do not want the state to make decisions for you and your family upon your death.

However, there are other negative consequences of failing to have an estate plan.

BENEFITS OF DEVELOPING AN ESTATE PLAN RIGHT NOW

 A comprehensive estate plan can accomplish much more than simply directing the distribution of your assets after your death. It can also:

  • Avoid probate
  • Reduce or eliminate estate taxes
  • Protect inheritance and provide for the needs of a minor child
  • Provide for the needs of a child or adult with special needs
  • Protect assets from creditors and other third parties (i.e. spouses of children and other heirs)
  • Avoid the need for a guardian or conservator appointed by the court
  • Minimize expenses after death
  • Plan for incapacity
  • Transfer assets and property to family members quickly
  • Save family members from making difficult decisions
  • Create a legacy and keep property and assets in the family
  • Make retirement planning easier and more effective
  • Address issues related to blended families
  • Aid in business succession planning

Depending on your situation and needs, there could be other reasons why the best time for an estate plan is now. The first step is to talk with an experienced estate planning attorney in your area.

DO I NEED AN ATTORNEY TO HELP ME WITH AN ESTATE PLAN?

An estate plan is only helpful if it meets your needs, accomplishes your desires, and meets the legal requirements for California. Otherwise, an estate plan could make matters worse for your family members. Therefore, consulting an attorney is one of the best ways to ensure that you do not waste your time or money developing an estate plan.

You can find DIY wills and estate planning documents online. However, these documents typically do not address all necessary issues. Estate plans need to be customized and tailored to each individual. It is impossible to accomplish this requirement with a “one-size-fits-all” estate plan.

By working with an attorney, you have the assurance of knowing that your estate plan checks off all the boxes for a comprehensive estate plan:

  • Meets all legal requirements for wills, trusts, and other estate documents to reduce the risk of contests and probate litigation
  • Correctly identifies heirs, including friends, charities, and distant relatives
  • Distributes property according to my wishes and no one else’s
  • Addresses special issues, such as guardians for minor children, individuals with special needs, blended families, etc.
  • Utilizes various trusts to maximize benefits and meet needs, such as pet trusts, special needs trust, life insurance trusts, revocable living trusts, etc.
  • Maximize strategies for avoiding probate, asset protection, and reduction of estate taxes
  • Coordinates with a retirement plan

The goal of an estate plan is to preserve what you own now and protect your loved ones after your death. A California estate planning attorney gives you the legal advice and guidance you need to ensure that your estate planning documents accomplish your desires and wishes. An attorney can also help you identify goals you might not have been aware of that you need, such as Medicaid planning or long-term care planning.

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