Whether someone is setting up an estate plan for the first time or they are making necessary revisions to their estate plan as a result of a personal injury settlement or a divorce, this can be a complicated and emotionally draining process. People may deal with a lot of uncertainty and they may have high levels of anxiety, become depressed or even struggle with anger. All of these emotions can be triggered by estate planning for various reasons, but people can avoid some of these challenges by approaching their estate plan from the right angle.
When it comes to setting up an estate plan, there are many options, and there may be many factors to take into consideration. For example, if someone expects their marriage to end, they may be wondering how a divorce could affect their estate plan. Or, they may be unsure about which estate planning options are best as a result of their divorce. Sometimes, people have irrevocable trusts, and they may wonder how these estate plans will be impacted by divorce and whether their assets will be seen as marital property or separate property.
When they begin creating an estate plan, many people come across the phrase “death taxes” online or in conversations with others planning for the future. Generally, “death taxes” refers to estate taxes, gift taxes, and inheritance taxes. And every estate plan should account for both federal and state versions of these taxes.
One important part of the estate planning process in California is determining what you leave to your children. Because an estate plan is hopefully created long before you die, situations may change with your beneficiaries and you may need to update your will. For example, if you have a child that you want to disinherit, this is a big step and one you should consider carefully, but it can be done if you determine that is the best thing to do.
Your estate plan should not be static because your life is always changing. You may have put great care into the initial formation of your plan, but if you have not recently reviewed it, your plan is probably outdated.
There are many factors to consider when creating an estate plan and organizing those factors may seem daunting. You may feel stressed when faced with the task of gathering your information and getting your wishes in a legal document that will carry on after you pass. When meeting with an estate planner, there are some essential items you should have ready in order to simplify the process.
Most California residents know that estate planning involves creating a legal structure for dispersing one's finances after his or her death. A will may also provide instructions for health care preferences, funeral arrangements and power of attorney. While it may seem that these issues primarily affect people in older age brackets, there are numerous reasons to create an estate plan at a younger age.
Planning for the future and preparing for long-term care is not always an easy process. This is a smart step for California readers of all ages and income levels, yet there are a few common estate planning mistakes that can derail a person's efforts and cause complications down the road. Of course, one of the most common mistakes that people make regarding their estate plans is to do nothing or assume they do not need one.
The will, sometimes called a last will and testament, remains the most common and recognizable tool that people in California and other states use to create their plan for asset distribution to their beneficiaries and for related purposes. However, living trusts have increasingly grown in popularity and are worth considering when one sits down with one's estate planning attorney to work out a plan. The revocable living trust is set up by the person called the grantor or settlor, and that person appoints a trustee to govern and administer the trust. In many instances, the settlor and the trustee are one in the same.
Divorce will bring many changes to a person's life, including finances, retirement and more. In a time of upheaval and transition, it can be easy to overlook some of the things a California resident may need to do after divorce in order to truly protect his or her interests. One of these things is to make estate planning adjustments.