Before you begin planning for your estate or drafting up a trust or will, there are a few questions you should always ask your estate planning attorney in Ventura, CA. Some of them, along with their answers are listed as follows:
What Is An Estate Plan?
In the event of yourself or a loved one passing away (that person is known as the decedent), there should be a plan in place by which their entire estate and belongings are to be managed and distributed. All their assets and possessions are to be distributed to other individuals (beneficiaries), in a certain proportion, according to the wishes of the decedent. An estate plan is a compilation of strategies that dictates what happens to the home, the investments, the vehicles, the retirement plan, etc. – all property of the individual – after they have passed away. A good estate plan should also include powers of attorney and health care directives as well as review the beneficiaries that may be already listed on life insurance policies, retirement plans, bank accounts, etc.
What Are The Reasons To Get An Estate Plan Created?
The most important reason to have an estate plan created is that it allows your children or heirs to divide and manage your assets efficiently after your passing. If you do not have a proper estate plan, the state’s intestacy laws will determine who shall receive your property. That may or may not be consistent with what your intentions were. A proper estate plan allows you the freedom to choose who your beneficiaries shall be and what they shall receive of your property upon your death. It also eliminates the possibility of any legal troubles or conflicts between your beneficiaries as far as what thought they were entitled to you’re your passing.
What Should I Ask My Estate Planning Attorney, Ventura To Include In My Estate Plan?
Your estate plan should include and/or address the following:
- Your home or any real estate that you owned
- Your vehicles, jewelry, and other personal property
- Your business interests
- Any and all financial accounts
- Any and all retirement plans
- Any life insurance policies that you may have taken out while you were alive
How Do I Find/Choose/Appoint A Guardian For My Children?
If you have any children under the age of 18, it is vital for you to appoint or choose a guardian for them. If the surviving parent lives, the minor children will be under their care and custody. They will automatically continue to remain their sole guardian. However, if both spouses were to pass, or the surviving spouse was for whatever reason incapable of being their guardian, you may name alternate guardians to ensure your children are taken care of.
What Primary Estate Planning Documents Should I Have?
The most important documents that you should have as part of your estate plan are as follows:
- Trust
- Will
- Guardianship (if applicable)
- Power of attorney
- Medical directives
What Is Probate And Why Should I Worry About It?
Unless you have a small estate (assets under $150,000), if you do not have a trust all property in your estate will go through a court-managed process. This is called probate. The assets of the deceased will be managed and distributed through the Probate Court. It can take a significant amount of time to complete the probate process depending upon the size and complexity of the estate. Your heirs may make this even worse if they are fighting amongst themselves, and the process can become quite costly for those involved. For this reason it is advisable to have your trust estate plan drafted out in due time if you want to prevent your loved ones having to go through the arduous process of probate.
A typical probate process will involve the following steps:
- Filing of a petition with a probate court
- Noticing all heirs after the filing is complete
- Appointment of a personal representative or executive for the estate
- Inventory and appraisal of the estate by an independent probate referee
- Sale of estate assets
- Payment of financial debt to any creditors of the estate
- Final distribution of assets and properties to the legal heirs
What Is The Difference Between A Will And Trust?
As per your estate planning attorney in Ventura, CA there are a few similarities between a will and a trust. Both of them are used as effective estate planning tools and they can easily work together to simplify your life. However, there are notable differences:
A will becomes effective only upon your death, whereas a trust is effective immediately upon creation. But the biggest difference between a will and a trust is that even with a will, the estate will still have to go through probate. a will can become effective only after your death whereas a trust becomes effective upon creation. Apart from this, there are a few more points of differences between the two such as:
- A will is effective only upon your death, whereas a trust is effective immediately upon creation.
- A trust is capable of distributing and managing your property with you being present and overseeing the process
- BUT THE BIGGEST DIFFERENCE IS THAT A WILL MUST STILL GO THROUGH PROBATE. Outside of a small estate (see above), A TRUST IS THE ONLY WAY TO AVOID PROBATE!
- Because wills must be probated, they are public. Trusts, because they avoid the probate process, are and remain PRIVATE!
Why Should I Create A Health Care Directive?
A health care directive is a powerful and important document and it should be created whether you are currently suffering from a medical condition or you are completely healthy, as you never know what tomorrow may bring. A health care directive provides medical instructions and directives to a representative or a family member that you have appointed to take medical decisions on your behalf in the event you become incapacitated.
When Should I Make Changes/Updates To My Estate Plan?
You should make necessary changes and updates to your estate plan in the following situations:
- Upon your marriage
- On the birth of your children
- Upon your divorce
- Death of your spouse
- Change in assets
- Relocation
- Change in status of a guardian
- Change in status of a trustee or executor
- Changes in tax laws
Will My Beneficiaries’ Inheritance Be Taxed?
According to the current federal laws, all US citizens and residents are subject to three major taxes that are specific to the transfer of property. This is the estate tax, generation-skipping transfer tax, and gift tax. So yes, the gross estate will be calculated, and according to the federal laws, certain deductions may be made on the taxable estate. However, whether taxes will be assessed and how much is largely dependent upon the size of the estate.
Again, these are but a few of the questions that you should bring to the table when you see your estate planning attorney in Ventura County.