In order to take care of your loved ones after you pass away, you’ll need to create an estate plan. However, many people make the mistake of only putting together a Last Will & Testament. The truth is that you should likely be incorporating several other estate planning documents if you live in California, especially if you have minor children or own your home. They can help eliminate any legal difficulties that your heirs may encounter.
Here are six reasons why our San Diego estate planning attorneys may recommend that you may need to create additional estate planning documents:
Reason #1 – Wills Are Probated
After you pass away, surviving family members will have to go through a process known as probate. The court system must validate your will before the executor can begin approving the distribution of assets. They’ll also have to notify creditors, who can then solicit money from your estate to resolve outstanding debts.
Probate can also become incredibly time-consuming – the process can drag on for 1-2 years before the heirs of your estate will receive their inheritances, even in routine cases. Assets won’t transfer automatically, and your loved ones will have to wait a while before settling your estate.
You can avoid probate by drafting other estate planning documents, such as revocable or irrevocable trusts. Assets contained within a trust will transfer to heirs and beneficiaries outside of any court proceeding, remain private amongst your family, and be wrapped up much more efficiently than a court supervised process.
Reason #2 – Saving Money on Court Fees
Probating a Last Will & Testament will also require your family to pay court fees (and likely attorney fees) throughout the process. This can reduce the value of your estate and affect the inheritances that you leave behind for your heirs by eating through a percentage of the estate. Trust Administration services, even if a trust administration attorney is hired to complete the entire thing for the family, will be much less expensive than a court supervised Probate process.
Reason #3 – Reducing Your Tax Liability
Depending on the size of your estate, you could also be on the hook for a substantial tax liability. However, you can avoid or mitigate an estate tax through several methods within your overall estate plan. Most techniques will involve a gifting strategy, charities, life insurance with a specific structure, and/or an irrevocable trust.
With an irrevocable trust, the government doesn’t consider assets contained within it to be part of your taxable estate. In other words, you’re forgoing ownership of the assets, which will transfer to beneficiaries and heirs after you pass away. However, in forgoing ownership when you create an irrevocable trust, you can’t modify or rescind it easily so this needs to be carefully thought through during your planning.
Reason #4 – Developing a Plan for Disabled Family Members
If you have family members with disabilities or who receive government benefits, you’ll want to draft estate planning documents to accommodate them specifically. This is especially important for families of young children with special needs. You want to include provisions in your estate plan that will allow them to have access to an inheritance but still qualify for federal benefits, such as healthcare, food assistance, and Social Security. In many cases, receiving a very small inheritance with the wrong structure can totally obliterate existing benefits, which can be devastating. Proper planning ahead of time can completely remove this risk.
Reason #5 – Taking Care of Your Family
When crafting your estate plan, you also want to make sure that you structure any potential inheritance in a way that most benefits the person you are planning for. Avoiding probate is just the tip of the iceberg. If you’re already taking the step to put a trust together you might as well consider structuring it to give the beneficiary some creditor protection as well (from lawsuits or divorce), or at very least structure the inheritance in a way that will be used responsibly. That’s where we can assist you – the estate planning experts at Jenkins & Jenkins can help get the right plan set up for you based on your goals and wishes.
We always recommend that you call us today and schedule an appointment with one of our attorneys. We ensure that families throughout San Diego can adequately plan and prepare for the future. Ultimately, we give you the tools and resources to make your loved ones feel secure after you pass away.
Testimonial from Sidney, Satisfied Estate Planning Client
It was a pleasure to work with Jenkins & Jenkins, Estate Planning Attorneys. I inquired on behalf of my parents. Michael was very understanding and made everything easy for them to understand. He met every concern and need of my parents to properly set up their will, trust, power of attorney, and accounting for their assets properly. The process was simple and every question Michael answered. My parents had avoided estate planning because it seems very daunting and my parents walked out of the final meeting with Michael and Caroline feeling happy, educated, and properly set up. We could not ask for better attorneys, very glad we chose them! We highly recommend Michael and Caroline!
