Basketball fans in Los Angeles were devastated by the news that Kobe Bryant, his daughter Gianna, and seven other people were killed in a fatal helicopter crash.
It is hard to process the information when you hear about people suddenly passing away before their time. Of course, if this type of event was to touch you directly, the shock would be indescribable.
No one wants to learn in this manner, but the fact is, you can get a wake-up call when a tragedy strikes. This definitely applies to estate planning matters. Some of the people that passed away were minors, and the adults were relatively young. Statistics show that the vast majority of people under the age of 65 do not have estate plans in place.
You never know what the future holds, and this tragedy has reminded us about the fragility of life. It is important to put an estate plan in place long before it would seem to be absolutely necessary. If you fail to take the appropriate actions, a horrific situation can be that much worse if the unthinkable was to take place.
Estate Plan Basics
Every situation is different, and this is why it is wise to discuss your unique objectives with a licensed estate planning attorney. This being stated, there are some basic components to the typical estate plan, and you can cover your bases if you address them. You can always update your plan later on as your life situation changes over the years.
Guardianship for Minor Children
If you are the parent of a dependent child, it is important to state your preferences with regard to a potential guardian. This can ensure that a person of your own choosing will be empowered to assume the role, and it will eliminate the possibility of disagreements among loved ones.
It should be noted that the court would have to approve of the guardian that has been designated. However, it is all but guaranteed unless the court determines that the person would not be able to serve the best interests of the child.
Income Replacement and Asset Transfers
An income replacement vehicle should be part of the plan, and this will be life insurance for most people. Term life insurance is relatively inexpensive, and though it has no cash value, it can provide peace of mind during certain stages of your life.
The centerpiece of an estate plan will be an asset transfer vehicle. A last will is a possibility, but a living trust is actually a better choice for most people. There are many benefits that go along with the creation of this type of trust, and we will cover them in a different blog post.
In addition to the events that will take place after you pass away, it is important to address end-of-life issues when you are planning your estate. An incapacity plan will include advance health care directives, and one of them is a living will.
This type of will does not have anything to do with monetary transfers. You state your life-support preferences in a living will, and these are very personal decisions that you should assert for yourself. If you do not take this step, and you are unable to communicate at some point in time, your family could be placed in a very difficult position.
Another directive that should be part of the plan is a health care proxy or durable power of attorney for health care. With this document, you name an agent that would be empowered to make health care decisions on your behalf that are not related to life-support. In order to give your agent access to your health care records, you would have to include a HIPAA release form.
If you have a living trust, you could name a disability trustee to administer the trust if you ever become incapacitated. You could add a durable power of attorney for property to give someone of your choosing the ability to manage assets that have not been conveyed into the trust.
We Are Here to Help!
Now is the time for action if you are going through life without an estate plan. You can schedule a consultation right now if you give us a call at 310-337-7696, and there is a contact form on this website you can use to send us a message.