Regardless of your health, age, or marital status, it is important to plan for the eventuality of your death to ensure that your loved ones are taken care of. Estate planning, the process of establishing a will or a trust, is often considered something that is only necessary for people who are wealthy, but it can be beneficial for anyone. Whether you have a large estate or simply want to pass on a few assets, estate planning can help guarantee that your final wishes are followed. An experienced Mission Viejo estate planning attorney from the team at Sakamoto & Ruelas, APC, is here to help you plan your estate.
The process of estate planning is a series of steps where an individual determines what assets, either physical or financial, they want to pass on to loved ones and how those assets will be divided in the event of their death. This is a lengthy process that involves a significant amount of contemplation and attention to detail. Despite the difficulty of the process, estate planning is important as there are several key decisions about end-of-life care and inheritances that will have to be made. A decision that must be made early in the estate planning process is whether you would like to develop a will, establish a trust, or do both.
Writing an official will is one of the more familiar, and sometimes more accessible, options for estate planning. The document, which lays out specific details of how assets should be distributed when you are no longer living, is legally binding. While the division and distribution of assets is one of the major aspects of a will, there are also a few other significant decisions that need to be made. These may include who will be responsible for any minor children left behind, which assets, if any, will be provided to individuals who are not legal or biological family, and which individual you trust to be executor of your will.
Despite how common they are, wills must also adhere to a few major restrictions. Wills cannot dictate what happens to assets that are jointly owned, such as businesses or homes. Also, before a will can be properly executed, it must pass through the probate courts, which may add additional costs like taxes and fees to the overall expenses. This also means that wills are a less private option since court records are open to the public. There are also cases where a will can be contested if a loved one or former spouse believes that the terms are not fair, since many states do not allow a spouse or child to be fully disinherited. Regardless of any restrictions, creating a will is an effective estate planning option for many.
Many people also choose to create a living will, either in lieu of or in addition to a standard will. A living will, which is also called a medical care directive, allows the creator to establish any end-of-life plans in case they are injured or incapacitated and cannot make decisions on their own. Like a traditional will, a living will allows you to choose someone who will make all major decisions in your place and eventually be the executor of the will. These agreements also allow you to detail the type of care you wish to receive if you cannot decide for yourself. A living will is a strong option if your family has a history of terminal illnesses or if you simply want to be prepared for any situation.
Some people choose to not establish a will because they want additional protection for their loved ones and assets. In those circumstances, establishing a trust is another option. A trust creates a legal entity that holds title to any personal assets, either financial or material, that the creator chooses to include. Once the trust has been established, a trustee is appointed. This person is responsible for managing and distributing the assets in the trust at the appropriate time. Trusts are a good option for individuals who wish to avoid major taxes and fees on their assets once they are no longer living. Unlike a will, a trust does not have to be processed by the courts, which also makes it a much more private option and saves money. There are two primary categories of trust: revocable and irrevocable.
If you want to ensure that your loved ones will have the material or financial support they need when you die, then establishing a trust is a great option. Regardless of the type of trust you select, they are a way to privately collect assets or establish a fund to support them after you are gone.
Whether you have just a few assets or you are planning for an extensive estate in Mission Viejo, CA, the process of estate planning is important. The full process can be daunting, and no one should carry the weight of planning on their own. Whoever is completing the estate planning will have to choose an executor that is trustworthy, determine who they want included as beneficiaries, and designate assets for each person. At Sakamoto & Ruelas, APC, our experts will guide you through the estate planning process to provide you with peace of mind and ensure that your end-of-life plans are solidified. Get started today.