What is an estate plan, and do I need one?

What is an estate plan?

An estate plan is a set of documents that distributes your assets and helps ensure that your wishes are carried out. Think of it as a set of gifts and instructions that you give to your loved ones. A comprehensive estate plan will also include documents that your loved ones will need to care for you if you become incapacitated.

Why have an estate plan?

There are several good reasons for having a comprehensive estate plan. First, to the extent possible, you want your loved ones to be able to distribute your assets in accordance with your wishes without having to deal with the headache of probate court. Additionally, you want your assets to go to those loved ones and not to avoidable taxes or court fees. And you want to keep the specifics of your estate private — and probate proceedings are public.

You’ve planned, saved, and worked hard all your life. When you pass on, you want to give your assets to your loved ones — not to courts, attorneys, and tax collectors. 

Who needs an estate plan?

Everyone can benefit from an estate plan. If you live in California and own a home or other real estate, however, a comprehensive estate plan is particularly important. California has experienced an extraordinary increase in property values that means that many homeowners and business owners will have sizable estates — even if they do not consider themselves “wealthy.”

In addition, California is one of a handful of states that recognizes community property — meaning that all property acquired during a marriage or domestic partnership belongs to the marital community and not to the individual. Accordingly, California estate plans must take into account how to deal with a person’s share of the community estate.

With careful planning, you can minimize taxes, ensure that your property is distributed in accordance with your wishes, keep the details and value of your estate private, provide for the guardianship of any minor children, and help your loved ones follow your wishes if you become incapacitated. All of these will make things easier on your loved ones.

What documents are included in a comprehensive estate plan?

Estate plans can encompass a variety of documents. Small estates may only require a will, but estates of even modest value can benefit from a trust. Some of the estate planning documents your attorney may consider include:

• Will or Pour-Over Will
• Living Trust or Trusts 
• Durable Power of Attorney for Asset Management
• Durable Power of Attorney for Health Care
• Advance Healthcare Directive
• HIPAA Privacy Waiver

An attorney will also advise you about giving gifts while you are alive and naming beneficiaries on your retirement and insurance policies.

At Rushing McCarl, we pride ourselves on working hand-in-hand with our estate planning clients — helping ensure that their plans are carefully tailored to their goals and that their wishes are carried out. Call us at 310-896-5082 or email us as [email protected] for a free consultation.

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