If you have ever heard of estate planning, it has likely been in the context of families or married couples. However, an estate plan is critical for everybody who has assets. Single people who are considering estate planning should think about contacting a California estate planning attorney. An attorney can help ensure that your wishes are respected and prevent any confusion or disagreements when you die or become incapacitated.
The Importance of an Estate Plan
Many people don’t realize what an estate plan does or why it is necessary unless they’ve run into somebody who doesn’t have a plan. Dying without an estate plan may lead to a lengthy and challenging process for your survivors to administer your estate. Additionally, dying without an estate plan can create friction among your living relatives as they try to determine who should get certain items.
If you do not have an estate plan, all of your assets may go through a probate court and may be divided based on state law. Typically, this means that a number of your relatives, even ones you aren’t close to or don’t care for, can each lay some claim to assets. This can be especially difficult if you have verbally expressed your wishes, but there is no legal documentation to support your wishes.
However, an estate plan helps avoid these issues and lays out how your assets should be distributed and who your beneficiaries will be. Additionally, if you have minor children when you die, you can identify a guardian for them. This helps to ensure that young children will have time to mature before acquiring significant assets. You should take care when determining the guardian to ensure that he or she will have your children’s best wishes at heart.
Beneficiary designations help transition many of your financial accounts, such as retirement accounts or life insurance payments, to one or more individuals when you die. Typically, beneficiaries can be set at specific percentages, so you do not have to identify a single individual. This is especially helpful to ensure that accounts may be divided fairly between children or other family members.
It is critical to review and update your beneficiary designations from time to time. If you change who you want to be a beneficiary, you’ll need to change the designated beneficiaries on your accounts. Your will or trust may not supersede a beneficiary designation. That means that if your will or trust states that you want John to receive the benefits from your account, but the beneficiary designation identifies Mary, Mary may receive those benefits.
Trusts and Taxes
Estate planning can be fraught with nuance and critical decisions. However, one key area that many people are concerned about is having the government tax their assets. Some of these taxes can be very large and exhaust a significant portion of your assets. While paying taxes is inevitable, there are some ways in which you can legally reduce taxes. One of the most common approaches to limit taxes is to execute a trust. You should consult with a California estate planning attorney to see if he or she can help you address your tax concerns by executing a trust.
Planning for how to have your assets divided can be a complicated process. However, it is easier for you to identify and communicate exactly how you want things handled. If you have been putting off executing your estate plan, call us today and let us walk you through the process.