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Creating the basic estate planning tools prevents disasters

All states, including California, provide statutory mandates when an estate is filed without a will. When a person with few relatives and no children dies without a will, the administrator of the intestate estate will be mandated to distribute the assets according to state law. This means that the person's assets may be given to relatives who may have been estranged from, or little known to, the decedent. Basic estate planning can avoid that result. 

Without estate planning, the beneficiary choices that the decedent would have made when alive may be passed over after death in favor of persons never contemplated. Although the individual with few close relatives may have trouble choosing the beneficiaries, acting is far more prudent than doing nothing. Despite the natural reluctance to create an estate plan, it nonetheless is far better to act than to hand one's life choices over to the state.

Experts recommend that some basic first steps be taken without delay to avoid unwanted results. Thus, for example, a living will should be made because it informs the medical staff of a person's choices about his or her end-of-life treatment protocols. Most people do not want to have life artificially extended when the last days have arrived.

Some people also express indecision and stress about who will handle their affairs in the event of incapacitation. The power of attorney is the tool used to put a trusted person in charge of that task. If it is not done, the individual's assets may be greatly depleted by a court process that requires appointing a guardian or conservator to take all of the necessary actions.

Another estate planning basic in California is making a will and appointing an executor to handle the probate process. Where there are no children or trusted other persons, another option is to appoint a financial institution as executor. For those who have an estate plan, this is a perfect time to review all beneficiaries listed in retirement plans, investment accounts and life insurance policies. Failing to have the right beneficiaries, or having no beneficiaries, are both prescriptions for potential additional costs and perhaps even estate litigation.

Source: greenbaypressgazette.com, "Intimidated by estate planning? Here are key first steps", Andrew Farah, Jan. 17, 2018

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