Estate Planning
Important Reasons to Consider an Estate Plan
Avoiding Conflict
Avoiding conflict between your heirs can be accomplished with a specific estate plan. Careful estate planning can help you to assess your personal needs and circumstances, and resolve such issues as choosing your beneficiaries, deciding who should be your executor or trustee, and resolve other questions such as providing care for minor or disabled children, providing for a spouse or a domestic partner.
Controlling Your Estate
Establishing an estate plan gives you the power to accomplish the goals you have in mind, such as providing support for a spouse or domestic partner, providing for a child's college education, or making gifts to a charitable organization.
Taking Care of Health and Financial Issues
The Advance Health Care Directive is a document that names an individual who is authorized to make decisions regarding your health care if you become incapacitated or are unable to make these decisions for yourself.
Durable Power of Attorney
This document allows you to grant authority to the individual you appoint to manage your financial affairs such as writing or depositing checks, paying bills and making mortgage payments . You may also grant more authority to your appointed agent such as the power to finance or sell real estate.
Reducing or Eliminating Estate Taxes
The most common estate tax saving trust is the AB trust, also known as the bypass trust. An AB or bypass trust can significantly reduce federal estate taxes when couples have a combined estate worth more than the federal estate tax threshold.
Irrevocable Life Insurance Trusts
This trust is a legal entity which holds the life insurance that you previously owned in your own name, or you may purchase a new policy at the creation of this trust. Because the trust owns the policy, the proceeds will not be included in your taxable estate. Your beneficiaries will remain as you originally designate, and will benefit from the full amount of the policy.
Premarital Agreements
Premarital agreements are enforceable contracts that define the rights and responsibilities of the spouses or partners during the marriage, separation or divorce. They cover areas such as wealth acquired prior to the marriage, ownership of property and predetermination of spousal inheritance rights. It is important to understand your rights as a premarital agreement can supercede California family law.
GST Trusts
Generation-skipping trusts leave property in trust for grandchildren and avoid estate taxes on the trust property when your children die.