A lot of people are unprepared from an estate planning perspective because they simply do not know where to start. This is understandable to some extent, but if you give the following questions some thought, your estate plan will begin to take shape.
How would your children be provided for if you pass away?
Caring.com conducts annual estate planning preparedness surveys, and they found that 26.8 percent of people that are between 18 and 34 had estate plans in place this year. The figure is just 22.5 percent for individuals that are between 35 and 54 years of age.
Many of these people are the parents of dependent children, and the unprepared individuals that have youngsters are doing their families a disservice. You should definitely have an estate plan in place as soon as there are other people depending on you.
Life insurance can serve as your income replacement vehicle, and you have to address the matter of child guardianship and money management. Your insurance policy proceeds can be directed into a living trust, and the trustee would manage the assets on behalf of minor children.
This type of trust can be the ideal asset transfer vehicle because it would be equally effective as you get older, and you can adjust the terms if and when revisions become necessary. Another option is a testamentary trust, which is a trust that is contained within a will.
Are you comfortable leaving lump sum inheritances with no safeguards?
You do not necessarily have to allow for distributions of all of your assets in lump sums. This can be a source of concern if you have a loved one that is not good with money, and there are other extenuating circumstances.
One of them is the matter of government benefit eligibility. Many people with disabilities rely on Medicaid for health insurance, and they receive income through the Supplemental Security Income (SSI) program. A windfall could cause a loss of eligibility for need-based benefits.
Some people are concerned about the impact that a large inheritance can have on a young person that is not fully developed. There are those that are reluctant to leave bequests with no strings attached to loved ones with substance abuse or gambling problems.
As a layperson, you are not going to understand how to proceed if you have any of these concerns. There are trusts that can be utilized to address circumstances such as these, and we can explain your options and make recommendations if you connect with our firm.
Who would you empower to manage your affairs if you become incapacitated?
No one is especially anxious to think about possible incapacity, but it is a fact of life. Alzheimer’s disease strikes over 30 percent of people that are 85 years of age and older, and it is not the only cause of cognitive impairment.
Some people become unable to manage their own affairs due to serious physical ailments. If you do nothing in advance to prepare for incapacity, the state could be petitioned to appoint a conservator to act for you.
You can take the matter into your own hands in advance if you execute durable powers of attorney. A durable power of attorney for property can be used name someone to manage financial assets, and you can add a durable power of attorney for health care decision-making.
If you have a living trust, you would act as the trustee while you are alive and well. When you are drawing up the trust declaration, you can empower a disability trustee to assume the role if it becomes necessary.
Another important incapacity document is a living will. In this type of will, you record your life support preferences in a legally binding matter, and you can add your organ and tissue donation choices.
Schedule a Consultation Today!
These are the basic questions that you have to ask yourself to get started, and a consultation with an attorney is the next step. If you are ready to take it, you can schedule a consultation appointment at our El Segundo, CA estate planning office if you call us at 310-337-7696.
There is also a contact form on this site you can use if you would prefer to send us a message.