Everyone should make planning for their death a priority, no matter their age, marital status, or health concerns. Many people believe that establishing a trust or writing a will, a process called estate planning, is only relevant for wealthy individuals, but that is far from the truth. No matter the size of your estate, whether small or large, estate planning has many benefits to offer. You may choose to meticulously divide your assets or simply pass on a few small things, but planning your estate can guarantee that your wishes are fulfilled. Working with the experts at Sakamoto & Ruelas, APC, can provide you with guidance and help you achieve the best possible outcome.
When an individual is in the process of planning their estate in Orange County, CA, they are working to decide what material or financial assets they wish to give to their loved ones in the event of their death. Estate planning can be a lengthy process and often requires a significant amount of time and attention. Regardless of how difficult the process may be, estate planning should be a priority for everyone because it allows you to make major life decisions well in advance. One of the earliest choices that should be made when you begin estate planning is whether to establish a trust, create a will, or a combination of the two.
One estate planning option that many people are familiar with is a will, which is a legally binding document that details what assets an individual is passing on and how those assets should be divided. In addition to asset division, a will often dictates what non-family members will receive, who is to be named the executor of the will, and where any minor children left behind will be placed.
There are several restrictions in place on wills that you should be aware of. Joint assets, such as property or businesses, cannot be included in a will but will pass to the other owner. A will must also move through probate court before it can be executed, which can incur additional expenses like fees and taxes. Having to process your estate through probate court also means that executing a will is less private because court records are accessible to the public. Your will can also be contested by loved ones who believe it is either incorrect or unfair. This can be especially difficult to navigate in states where you are not allowed to fully disinherit spouses or children. No matter how many restrictions are in place, a will is an accessible option for anyone’s estate plan.
In addition to, or in place of, a traditional will, some people choose to create a living will. This document, also referred to as a medical care directive, is a way for an individual to lay out their wishes for the end of their life in the event that they are incapacitated in some way and cannot make their own decisions. Living wills also require an executor to be chosen, who can make any major decisions in your place and eventually execute your will. This is also a way to dictate what medical care you would like to receive if you are incapacitated. A medical care directive may be a good choice if your family has a history of serious illnesses or if you want to be as prepared as possible.
A will may not be the most feasible option for some people, or they may choose to create a trust alongside their will. A trust is a legal entity that holds title to any assets added to it. A trustee is assigned, often picked by the originator of the trust, who is responsible for managing and distributing the assets in the trust at the correct time. Many individuals choose to establish a trust because it does not have to go through probate court, so the overall process is much simpler and can be less expensive. The lack of court involvement also makes trusts the more private option, which is often appealing. The two main varieties of trusts are revocable and irrevocable.
Establishing a trust is a great way to guarantee that your loved ones have the assets and support to maintain them in the event of your death. Whichever type of trust you choose to establish, you will be able to protect your assets and your loved ones in the most private and secure way.
Regardless of the size of your estate, estate planning is something that deserves your attention. Completing the process is a significant undertaking that no one person should have to do on their own. Major decisions must be made, such as who will care for minor children, what loved ones will receive assets, and what assets will be included in the will or trust. Contact the team at Sakamoto & Ruelas, APC, to see how we can help you with your estate planning process.