It is a common misconception that inheritance planning and estate planning are one in the same. In reality, inheritance planning is merely one part of comprehensive estate planning. When it comes to Los Angeles inheritance planning options, let our attorneys guide you through the process. Here is what you need to know.
Estate planning accomplish more than just giving away property
Estate planning is the way you prepare yourself and your family for what happens after your death. Estate planning can also be used to plan for unexpected incapacity. Planning for the future is critical for everyone, regardless of the size of your estate or the size of your family. Planning ahead gives you the opportunity to specify who will inherit your property after your death while helping you to reduce the taxes your estate will have to pay. If you become incapacitated, either temporarily or permanently, your estate plan can provide the protection you and your family will need, if you are unable to make decisions for yourself.
The real meaning of inheritance planning
Basically, the inheritance plan is the part of your estate plan that spells out who you want to get which property and how you want them to receive it. An inheritance planning involves making choices about your heirs and how you want your estate to be distributed to them. Once this plan has been created, you must then create an estate plan which will make your inheritance decisions legally enforceable.
The purpose of putting your inheritance plan in writing
The primary reason for having an inheritance plan is to keep your property from ending up with someone you don’t want to have it. The reality is, if you don’t make the decision now about who should receive your assets, the court will do it for you. Therefore, the goal of your inheritance plan is to designate which of your heirs should receive which assets. If the court is required to do this for you, it can take years to complete and often leads to ugly family disputes. Remember, courts do not automatically decide that a surviving spouse will get everything.
The last will and testament is the most common tool
Simple wills are most commonly used when all that is required is instructions on how to distribute modest assets from the estate to the named beneficiaries. As long as the nature of the assets is not too complicated, simple wills are more than likely enough to accomplish the task. Like all wills, a simple one needs to be in writing and should be typed instead of handwritten to avoid issues of eligibility. The basic elements of a will are the testator’s name, address and marital status and instructions regarding which property goes to which beneficiaries. The executor of the estate should also be identified, as well as a guardian for any minor children, if applicable. The testator and the witnesses are required to sign and date the will, as well.
Trusts can also be used for Los Angeles inheritance planning
With a trust agreement, your property is transferred to the name of the trust to ultimately be transferred to the named beneficiary upon your death. The trustee is the person who manages the property until that time. One benefit of a trust is that the assets included in the trust will be able to avoid the probate process. There are different types of trusts. A testamentary trust, unlike a living trust, does not go into effect until the grantor (the person who made the trust) dies.
What is a testamentary trust?
A testamentary trust is one that is contained in a last will and testament and provides for the distribution of all or part of an estate. A testamentary trust often includes the proceeds from a life insurance policy held on the grantor. It is possible to have more than one testamentary trust per will.
When does a testamentary trust become effective?
A testamentary trust basically becomes effective upon the completion of probate administration, after the death of the grantor of the trust. This type of trust lasts until it is set to expire, which is determined by the specific terms of the trust agreement. With trusts established for minors, expiration commonly occurs when the minor has reached the age of majority or older, when he or she graduates from school or gets married.
Join us for a FREE seminar today! If you have questions regarding estate planning, trust contests, or any other trust administration issues, please contact the Schomer Law Group either online or by calling us in Los Angeles at (310) 337-7696, and in Orange County at (562) 346-3209.
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