With the proximity of celebrities and Silicon Valley entrepreneurs, California readers might be tempted to regard estate planning as a luxury of the rich and famous. A recent article, however, reminds us that estate planning is not just about money.
What Is Estate Planning?
As a preliminary matter, estate planning – instructions set forth in documents like wills, trusts, durable powers of attorney or advanced healthcare directives – is a means of ensuring that a person's values and wishes are preserved during times of incapacity or in the event of death. It's not just about inheritances.
For example, a parent may want to ensure that any available assets are used to provide for dependents, rather than being distributed in lump-sum payments upon their death. In the event of a person's incapacitation, estate planning can specify the type of care that a person would like to receive – or decline. Estate planning can also provide for any charitable giving.
Why You Need an Estate Planning Lawyer
However, estate planning requires careful attention to detail to ensure that all assets and accompanying directives are properly laid out for one's beneficiaries and heirs. In estate planning where a will has been made, an executor must be appointed to take care of one's assets after passing. This person will be handling all of the assets and money left behind. Alternatively, others prefer the option of a trust, which often includes terms that withhold distribution until dependents reach a certain age.
If you are considering matters of estate planning, an attorney can help you specify your desired distribution of assets while minimizing your exposure to financial issues and other entanglements. Estate laws – and related tax issues – often become exponentially more complicated than one's original plans. For that reason, a person might be well advised to consult with an attorney before undertaking this process. An attorney can also advise you of any advantageous tax laws concerning annual gifts of money – which is currently $13,000 per year to a beneficiary tax-free.
Source: Huffington Post, "Is Estate Planning Just For the Rich and Famous?" Catherine Hawley, Aug. 9, 2012