Estate Planning FAQs
Many people think that the term “estate planning” is a concept that applies only to those who live behind gates and are chauffeured about wherever they go, but far from it. Estate planning is the process of preparing for the future, not only for your loved ones but also for yourself.
It certainly involves creating a will or living trust to provide for those close to you, but it also embraces the creation of legal documents such as powers of attorney and living wills to have people in place who are empowered to make decisions for you should you become incapacitated.
Through my many years of helping individuals in and around Los Alamitos, California, create wills, trusts, and powers of attorney, I have encountered many questions and misconceptions about what estate planning entails. Below, I will address many of the questions and concerns people have when they begin planning for the future of themselves and their loved ones.
My firm, the Law Offices of Lawrence H. Nemirow PC, proudly serves clients not only in Los Alamitos, but also throughout Los Angeles County, Orange County, Huntington Beach, Newport Beach, Cerritos, Santa Ana, Anaheim, and Long Beach.
Estate Planning FAQs
What Is Estate Planning?
There are many levels to estate planning. Most people will simply conclude that it involves writing a last will and testament, so you can leave what you own to your loved ones when you pass on. That certainly is a big part of estate planning, but in addition, estate planning also involves preparing for eventualities in your life other than your passing away.
A living will, or advance health care directive, can instruct someone you know and trust to make medical decisions for you should you end up in a hospital unable to speak for yourself. A power of attorney can likewise designate someone else to make financial decisions for you should you become incapacitated or merely decide to travel for a length of time.
What Should I Consider Before I Start?
As mentioned above, your primary considerations are your loved ones and how they will be taken care of after you’re gone and also your own health and financial well-being going forward. You need to prepare for every eventuality. You never know if or when your own health will require someone to step in for you and make important decisions, not only regarding your health care options but also your financial ones as well.
Do I Just Need a Will?
A last will and testament is the basic building block of estate planning, but it is often just that—the first step. A will is subject to probate court administration, which means that what you’ve left your loved ones can be tied up in court for months or longer before they get anything.
In contrast, a living trust can also name beneficiaries and designate what they receive, but it avoids probate. While alive, you create the living trust and place all of your assets in it. You are the immediate trustee in charge of those assets, but your legal document also names a successor trustee to take over administration should you die or become incapacitated.
What Happens If I Die Without a Will or Trust?
If you never create a will or trust and you die, the state will then decide who gets what of your assets. Dying without a will is called dying intestate. Your assets will still be subject to probate administration, and the judge will use the state’s laws of intestate succession to decide who gets what.
Generally, intestate succession starts with the spouse or partner and any children, but the formula the court uses can get confusing. It is much better to name your beneficiaries and their share of your assets in a will or trust.
What Happens During Probate?
If you leave a will, it only becomes valid once you pass away. It has no power before then. The person you name in your will as your personal representative must present the document to the probate court in the county where you die. Your personal representative then becomes the executor of your estate. The executor’s first task is to notify everyone of your passing, and this includes creditors.
The executor must “collect” all the assets you’ve left behind and pay creditors before he or she can distribute anything to your beneficiaries. It can be a lengthy process, as it also involves paying off any taxes due and closing out any outstanding accounts. There are also detailed reporting and accounting requirements that must be met before any distributions can be made.
How Often Should I Update My Estate Plan?
Some people create a will or trust and then just move forward in life without considering the possibility of future personal and financial changes. If you have a trust, for instance, and you acquire new assets, you must place them in the trust. If you divorce and/or remarry, the beneficiaries you’ve named in a will or trust may need to be updated. In short, a periodic review (ideally, annually) should be conducted on any estate plan you’ve created.
Do I Need an Attorney to Create an Estate Plan?
We’ve all seen televised and online ads touting services to create a will or trust by yourself. These services provide a checkbox and fill-in-the-blank approach.
The problem with this DIY option is that you really need to review not only your current financial situation but also your goals for the future of you and your loved ones with someone who can advise you of the best options, which could involve a will, a trust, an advance health care directive, and one or more powers of attorney. Estate planning should be comprehensive, well-thought-out, and conducted in consultation with an experienced estate planning professional.
Answering California Residents’ Most Important Questions
Estate planning is an important part of life that too many of us put off. No one really wants to contemplate the end of life, but it is important not only for the ones you cherish and depend on, but also for yourself should you suffer a setback or need someone else to make important decisions when you cannot.
For all your estate planning questions and concerns, whether you have a will or trust in place already and need to update it, or you’re just starting off, contact me at the Law Offices of Lawrence H. Nemirow PC. I proudly serve clients in Los Alamitos and throughout Los Angeles County, Orange County, Huntington Beach, Newport Beach, Cerritos, Santa Ana, Anaheim, and Long Beach.