Estate Planning: Securing Your Legacy with Effective Estate Planning
It is easy to procrastinate getting started on your estate plan, because it requires you to confront several uncomfortable truths. You must face the fact that your life expectancy is limited, and so are your financial resources; even if you live to an advanced age and have more money than you could spend in a lifetime, everything is finite. You must also acknowledge that if your family inherits money from you, you have little control over how they spend it. With estate planning, doing something is better than doing nothing, even if you just type a draft of your will into a Word document based on advice you received from Google. Do-it-yourself estate planning can lead to costly mistakes, though. A Whittier estate planning lawyer can help you ensure that your estate planning documents provide the protection that you intended.
When it Comes to Estate Planning, You Do Not Have to Be Old or Wealthy to Write a Will
Despite what some cranks on social media might tell you, it is not true that the state will inherit all of your money if you do not write a will. What will actually happen is far less dramatic; your close family members will inherit your estate. The laws of intestate succession determine which family members are entitled to an inheritance if the deceased person did not write a will. If you are married and you predecease your spouse, then your spouse inherits everything. If you have children and are divorced or widowed, your children inherit your estate. If you are single and do not have children, your estate goes to your closest living relatives, such as your siblings or nieces and nephews. The only people whose property reverts to the state are the ones who do not have any living family members and did not write a will.
When you write a will, you can be generous to anyone you choose and disinherit anyone you choose; your will can reflect the fact that the people who really treated you like family were your close friends, not your blood relatives. Of course, even if you are so non-materialistic that it does not matter to you who inherits your estate, you still need to write a will, at least if there is anyone you care enough about to want them not to have to deal with the stress of making decisions about your final disposition of remains or the probate of your estate. At least write whether you want to be buried or cremated. If you have minor children, indicate who should be their guardian. If you have pets, indicate who should take care of them.
A Revocable Trust Can Simplify Your Estate Plan, But it Does Not Completely Avoid Taxes
A revocable trust is a good way to provide for your long-term care while you are alive and to give your family quick access to their inheritance after you die since a trust does not have to go through probate. To do this, name yourself as beneficiary of the revocable trust and your children (or any other beneficiaries you choose) as successor beneficiaries; choose a lawyer as successor trustee.
While revocable trusts reduce stress, they do not make tax obligations vanish into thin air. A revocable trust is not legally separate from the grantor; much like a sole proprietorship, it does not file its own tax returns. Therefore, you still pay taxes on the trust assets during your lifetime. When you die, you can no longer revoke your revocable trust, so it becomes an irrevocable trust with its own tax ID number. It does not have to pay taxes on the principal since you paid those taxes when you were alive. If it earns income after you die, the beneficiaries must pay taxes on the trust income, as they would on any other kind of income.
Planning for Your Long-Term Care
No estate plan is complete unless it accounts for your care in your old age. You need a springing power of attorney and a healthcare power of attorney more urgently than you need any of the documents that relate to what happens to your money after you die. An estate planning lawyer can help you take the long view about long-term care planning, whether that means qualifying for Medicaid nursing home benefits or buying long-term care insurance.
Contact the Law Offices of Omar Gastelum About Estate Planning
An estate planning attorney can help you formalize your will, establish a trust, and plan for your long-term care. Contact the Law Offices of Omar Gastelum and Associates APLC in Whittier, California, to set up a consultation.
Sources
https://www.specialneedsalliance.org/the-voice/a-short-primer-on-trusts-and-trust-taxation-2/
