Almost Everything You Need To Know About Wills And Trust
What is estate planning?
Estate planning is really about creating your legacy: protecting and providing for you, your loved ones, and your property; staying in control; and offering guidance.
Who needs estate planning?
Everyone over the age of 18 needs his or her own estate plan. Of course, estate plans vary immensely depending on goals, finances, family situation, and where you live . There is no one-size-fits all estate plan.
What is a trust?
A trust is a contract containing your instructions so others know what you want to happen and how they can help you. During your lifetime they are called revocable or living trusts and you serve as your own trustee and beneficiary during your lifetime. Other trusted helpers (i.e. trustees) are appointed to jump in and help if you aren’t able to manage your finances and day-to-day business and after your death. Upon your death, the trust becomes an irrevocable trust and the terms cannot be changed .
What is a will?
A will is a document you draft to appoint guardians for any minor children, appoint an executor or personal representative, and distribute assets in your individual name and it must go through probate. If you don’t have a will, the court will decide who has settles your estate and raises your children and state law determines who gets your assets – and it may not be who you think. Most people want to make those decisions themselves.
When is my will effective?
Your will is only effective at your death.
What is a healthcare or medical power of attorney?
In California this is called an Advanced Healthcare Directive and truly describes your wishes about your medical and end of life care. It states whether or not you want medical interventions to be kept alive if you are in an irreversible coma or vegetative state, and if you want to be kept as comfortable as possible with certain medications.
The AHCD is effective during your lifetime and is considered an advanced medical directive because you’re making a medical decision in advance. Your health care agent, named in your health care directive, must respect your advanced medical directives.
What is a power of attorney?
What is a power of attorney?
It’s common to execute powers of attorney for finances, real estate, and business purposes. Each has a separate, limited purpose. The gist is that the agent you appoint is legally empowered to help you should you need or want help. A financial power of attorney appoints your agent to make financial decisions and manage bills during a period of your incapacity.
When is my power of attorney effective?
Well, that depends. Most powers of attorney are effective immediately, but others are springing. A “springing” power of attorney springs into action upon the occurrence of an event such as disability or a period of incapacity or event.
What is an agent?
An agent is a trusted helper such as the healthcare agent under a healthcare directive as well as an agent under a general power of attorney.
What happens if I don’t have an estate plan?
If you don’t have an estate plan, the government has a plan for you – and you probably won’t like it. For example, it’s the court who will decide who raises your children and who handles your finances and private matters. And, it’s state law that will decide who inherits from you – it may not be who you think.
What is probate?
Probate is the process by which the court validates a will and supervises the settlement of an estate, including the transfer of assets to beneficiaries. In California the probate process is public, can take a minimum of 15 -1 8 months, and is very costly.
Should I avoid probate?
Most people want to avoid probate because it can include high fees and costs, significant time delays and stress, and everything that goes through probate is public information. Anyone can go on the Internet and see a listing of your assets, debts, beneficiaries, and who got what. If you’re like most people, you want to keep your family affairs and finances private.
How do I avoid probate?
Only assets in your individual name will go through probate. Many folks use a (fully funded) revocable living trust to avoid probate. In addition, contract assets such life insurance, retirement accounts, and annuities as well as assets owned by joint tenants with right of survivorship avoid probate as well.