Estate Planning is the process of planning for the future, so that you
can take care of everyone you love and properly manage or dispose of everything
you own. This not only pertains to “who will get what” when you die, but also
how to best manage your assets while you’re still alive. If unexpected life
events were to occur that could potentially impact your ability to manage your
own finances, you would be prepared and rest easy, knowing that you have
established vehicles such as a durable power of attorney or advance health care
directive.
Take this simple test: Is Your Estate Planning Up to Date?
Wills
Everyone needs a will. Regardless of if you are single
with no family, or married with children, unless you want the state of
California to dictate where your assets go when you pass away, you will want to
have a will in place sooner than later. Writing a will may help you think about
not only the people whom you want to benefit financially, but also what kind of
legacy you will want to leave behind.
Durable Power of Attorney
If you were to get into some kind of
car accident that left you mentally incapacitated and unable to manage your own
finances, this document would ensure that your desires would be executed. You
would have appointed one agent (with two successor agents) to make financial
decisions for you, if you were still alive but unable to make these decisions
yourself.
Advance Health Care Directive
Remember what happened to Terri
Schiavo? This document will ensure that your loved ones and trusted friends can
make informed decisions about your health care, if something were to happen to
prevent you from making these decisions on your own. In this document, you can
write specific instructions about life support treatment, whether you want to
donate organs upon death, and appoint at least 2 agents to make health care
related decisions on your behalf.
Trusts
By the time a person is married and has their first
child, they should already be thinking about establishing a revocable living
trust for the benefit of themselves, their spouse and their children as
beneficiaries of their estate.
The rule of thumb to keep in mind with regard to a revocable or “living”
trust is that if you own more than $100,000 in assets, you probably need one. In
other words, if you own your own home (chances are, it’s worth much more than
that, especially in California), you may need a revocable or “living” trust, in
order to avoid a probate administration of your estate when you pass away.
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