A lot of people have misunderstandings about estate planning. Often, they mistakenly believe that estate planning is only for the rich and extremely successful. In reality, everyone should create at least a basic estate plan, especially if they have a home, children, and retirement savings, but these are not requirements.
Estate planning is for us all. It doesn’t matter how much money someone makes, or their net worth because what matters is that a sound estate plan minimizes the stress, confusion, and unnecessary court and legal fees for a decedent’s loved ones after their death.
Estate Planning Can Be a Difficult Topic
We have found estate planning to be a difficult topic for clients and their loved ones to address. It’s even difficult for high-net-worth individuals who have a lot at stake. You’d be surprised to learn how many wealthy individuals are just as unprepared as someone who earns a modest living or is middle-class. Few people are comfortable contemplating their own mortality – that’s the problem.
However difficult it is to address estate planning, it’s absolutely necessary. If you fail to prepare the proper estate planning documents – your assets, such as houses, real estate, retirement plans, collectibles, and other assets can end up in legal limbo in probate for years after your death, or they can end up being distributed under California’s intestate succession laws, which go into effect when someone dies without a valid will or trust.
In cases where someone dies without an estate plan, the decedent’s assets usually go to the closest living blood relatives, which isn’t necessarily how the decedent would have distributed their estate if they had a say in the matter. For instance, perhaps your only living relative is your estranged brother, who is in prison for drugs. You would rather see your money go to charity than to his drug habit!
At the bare minimum, you want to have these three estate planning items:
- A current will or trust;
- A durable power of attorney, which allows another person to make legal and financial decisions on your behalf in case you become incapacitated; and
- Beneficiary designations (bank accounts, life insurance policies, retirement accounts, etc.) that are up-to-date.
The thing about life is you just never know when something unexpected can happen. You could be in a car accident, or you could suddenly fall ill with a terminal disease. The best time to create an estate plan is now, when you’re of sound mind and good health and can make the necessary decisions about your assets and who you want to get them and when. Contact us today to meet with a Rancho Cucamonga estate planning attorney.