Every adult can benefit from having a comprehensive estate plan in place. If you are just now contemplating the creation of an estate plan, you have much to think about before you get started. By its nature, an estate plan is highly personal and should be individually tailored to meet your needs and achieve your unique goals. There are, however, some considerations that are common to most estate plans. To help you get started with your estate plan, the Los Angeles attorneys at Schomer Estate & Wealth Advisors offer 10 questions to consider when creating your estate plan.
- What are your assets and liabilities? Create a comprehensive inventory that includes real estate properties, bank accounts, investment portfolios, retirement accounts, life insurance policies, personal property (jewelry, vehicles, art), business interests, and digital assets (cryptocurrencies, online accounts). Make a similar list documenting all your debts such as mortgages, credit card balances, personal loans, car loans, and any other obligations. Understanding the full scope of your financial situation helps in planning for the settlement of debts and distribution of assets.
- Who will be your beneficiaries? Identify who you want to inherit your assets. Consider immediate family members, extended family, friends, charitable organizations, and any other entities you wish to support. Also, decide if there are specific items or amounts you want certain individuals to receive, and consider how to handle contingencies if a beneficiary predeceases you.
- Who will be the Executor of your estate? Choose someone trustworthy, organized, and capable of managing legal and financial responsibilities. This person will be responsible for filing your Last Will and Testament with the probate court, paying debts and taxes, and distributing assets to beneficiaries. Consider appointing an alternate Executor in case your first choice is unable or unwilling to serve.
- Do you need a Will, a trust, or both? Understand that a Will directs how your assets are distributed after your death and names guardians for minor children. A trust, on the other hand, can manage and protect assets during your lifetime and specify how they should be distributed before and after your death. A trust can provide additional benefits as well, such as probate avoidance, incapacity planning, and protecting the inheritance of a minor child.
- Who will take care of your minor children or dependents? Choose a guardian who shares your values and parenting style and discuss your decision with them to ensure they are willing to accept the responsibility. Consider setting up a trust to manage assets for minor children until they reach adulthood, specifying how and when funds should be distributed for their care and education.
- How will estate taxes be handled? Understand the federal and state estate tax thresholds and explore strategies to minimize tax liability, such as gifting during your lifetime, setting up irrevocable trusts, or charitable donations. Consult with an estate planning attorney and tax advisor to develop a plan that aligns with current tax laws and maximizes the inheritance for your beneficiaries.
- Do you have an advance healthcare directive or Living Will? Specify your wishes regarding medical treatments, life-sustaining measures, and end-of-life care to guide your healthcare providers and loved ones if you become incapacitated. Designate a trusted individual to make medical decisions on your behalf, ensuring they are aware of your preferences and values.
- Have you assigned a power of attorney? Appoint someone to manage your financial affairs, such as paying bills, managing investments, and handling property transactions, in case you are unable to do so at some point in the future. Decide if the power of attorney should take effect immediately or only under certain conditions, such as incapacitation. Also discussed whether you want to execute a general or limited POA with your estate planning attorney.
- How will your digital assets be managed? Include instructions for accessing, managing, and distributing your digital assets. This can include email accounts, social media profiles, online banking, digital files, and cryptocurrencies. Provide a list of passwords and login information to a trusted individual or use a secure digital vault to store this information.
- Are all documents up-to-date and legally valid? Once your estate plan is complete, be sure to set up routine reviews so you can update your estate planning documents to reflect significant life events (marriage, divorce, births, deaths) and changes in your financial situation or personal preferences.
Do You Have Questions about How to Create an Estate Plan?
For more information, please join us for an upcoming FREE seminar. If you need creating your first estate plan, contact the experienced Los Angeles estate planning attorneys at Schomer Estate & Wealth Advisors by calling (310) 337-7696 to schedule an appointment.
A graduate of Boston University School of Law, Scott P. Schomer is a frequent lecturer on estate planning and elder law issues, having discussed these important issues on local and national television. A seasoned courtroom advocate, Scott has obtained combined judgments and verdicts in excess of twenty-five million dollars for his clients. Read More!
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