When most hear the word estate, they think of the wealthy few with numerous large houses, expensive cars, and other substantial assets. However, believe it or not, everyone has an estate. An estate consists of everything you own, including your home, motor vehicle, checking and savings accounts, life insurance, investments, and even your furniture. Yet, it is even more important to realize that no matter how small or large this estate is, you cannot take it with you when you pass away.
As a result, if you do not plan for the future, you risk your family having to deal with numerous conflicts and expensive court proceedings that will not guarantee that your wishes are carried out. Consequently, even though estate planning may not be on everyone’s “to do” list, not having one can leave your family dealing with significant problems that can forever impact their future.
What Exactly Is an Estate Plan?
Estate planning involves making a written plan for two major events: disability and death. Many of us do know know if we will become injured or disabled. But we all know that each of us will pass away someday. Also remember that every person in California has a one-size-fits-all, government controlled, no freedom estate plan. If you gin advance, arranging your personal and financial affairs, and expressing your personal wishes so that in the event of your death or incapacity, those left to oversee your well-being and your family can carry out your wishes as efficiently as possible.
However, a proper estate plan can also do so much more, such as:
- Providing instructions for your care and financial affairs
- Providing for the transfer of your business when you become disabled, incapacitated, or pass away
- Naming a guardian for your children and inheritance
- Help family members with special needs
- Minimize court costs, taxes, and unnecessary legal fees
More importantly, when it comes to estate planning, this is not a one-time event. It is an ongoing process that individuals need to review and update as their circumstances change over time.
What is the Cost of Not Having an Estate Plan?
An estate plan is about more than just money. These plans are also in place to give you and your family the peace of mind that when issues arise in the future, your loved ones will be taken care of and will not need to head to court, no matter what happens to you.
Consequently, if you do not have an estate plan:
- The courts will have to decide who gets your assets, a process that will rack up fees, take years to resolve and become a headache for everyone involved.
- The courts will determine who will raise your minor children, which will not ensure that your children are cared for in a manner that you approve of or by those you trust most.
- Your heirs can face significant tax burdens, having to pay substantial federal and state estate taxes and state inheritance taxes.
- Your spouse may have to depend on the court for an allowance to pay everyday expenses pending the probate of your estate.
What is the Cost of Only Having a Will?
A willis a legal document that expresses a person’s wishes as to how their property will be distributed after their death and which person will manage the property until its final distribution.
However, while creating a will is an important aspect of planning for the future, it is only a small part of effective estate planning. For instance, if you only create a will before you die, you are guaranteeing that your loved ones will have to go to court when you pass away and likely leave your family to deal with unnecessary, time-consuming, and expensive legal processes when you become incapacitated.
What is the Cost of Not Planning for Incapacity?
When people think about planning for the future, they often believe it only involves figuring out the proper distribution of their assets upon their death. However, there is much more to this process. In fact, planning that is only focused on who gets what after you die does not leave your family prepared for other devastating situations, such as when you become incapacitated by an illness or an accident.
And while incapacity, like death, leaves individuals incapable of caring for their loved ones, incapacity comes with uncertain timeframes and outcomes. Nobody knows how long an individual will be incapacitated, whether they will recover, or will it become a costly event that finally ends when the person dies. That is why this uncertainty makes incapacity planning so important to your life and your family, as not having a plan in place can lead to extensive financial costs, substantial emotional trauma, controversial court battles, and internal family conflict.
What Is the Cost of Not Keeping the Estate Plan Up to Date?
One of the most common mistakes people make, outside of not creating an estate plan, is not updating an estate plan over time. This is because when an event arises, such as incapacity and the family has an estate plan that no longer works. It is too late to do anything about it.
For these reasons, it is recommended that you review these estate plans every year, or at least every three years, to verify that the information is correct. You should also check these plans immediately following events such as births, deaths, divorce, and inheritances, and ensure that your estate plan is up-to-date regarding your assets. This way, your loved ones know what they have to do with your things when something happens.
Work with an Estate Planning Law Firm Today and Ensure Your Future and Your Family Is Taken Care Of
While planning for your death may not be the most enjoyable conversation you want to have, making sure your family and assets are taken care of when you pass away can be a significant burden lifted off your shoulders and theirs. For these reasons, if you are thinking about estate planning or want to explore your options, make sure you reach out to an experienced estate planning law firm today.
At California Probate and Trust, PC, our trust attorneys are ready to answer your questions, go over your estate planning options and help you prepare for the future. Contact us today for more information and find out how we can help.
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