Estate planning is a process. It involves people — your family, other individuals and, in many cases, charitable organizations of your choice. It also involves your assets (your property) and the various forms of ownership and title that those assets may take. And it addresses your future needs in case you ever become unable to care for yourself. Through estate planning, you can determine:
Many people mistakenly think that estate planning only involves the writing of a will. Estate planning, however, can also involve financial, tax, medical and business planning. A will is part of the planning process, but you will need other documents as well to fully address your estate planning needs.
The purpose of this page is to summarize the estate planning process, and illustrate how it can help you meet your goals and objectives. You will discover that estate planning is a dynamic process. As people, assets and laws change, it may be necessary to adjust your estate plan to reflect those changes
The short answer is you. The long answer is a little more complicated. Let's start with what can an estate plan do for you:
There are five key components to the basic estate plan: will, trust, power of attorney, advanced healthcare directive, and HIPAA waiver. You may also choose to include nomination(s) of guardianship and conservatorship if needed. As time goes on so does an individual’s benefit in obtaining an estate plan. The older one ages and the greater their assets become the more essential an estate plan is to protecting you and your loved one's future. A precise rule to assess the present need for an estate plan does not exist.
For most, the first time an estate plan should be considered is when children come in to the picture. With a will or estate plan you can designate a guardian or guardians and provide instruction as to the care of your children. Separately, an estate plan will shield the maximum amount of your assets from unnecessary taxes, and better provide for the financial security of your loved ones. Generally, if you die without a will, trust, or other provision for the distribution of your money and property, that money and property will be distributed according to California law. This is a complicated process, but essentially the state will determine who gets the property based on their relationship to you.
One way you can control the distribution of your property after death is through a will. But, even though your will can provide for information on how to distribute your assets, your beneficiaries or a named executor will still need to go through a court process called probate to distribute your property. You can also use a will to make arrangements for the care of your minor children.
A proper estate plan incorporates a will and all the same protections that a will provides. It also effectively protect both your personal financial and medical wishes. Later on it will prevent unnecessary taxes and probate proceedings.
Whether or not to create a trust is a personal decision and you should consider whether you need to hire a lawyer or other estate planning professional.
It is a legal document that can, in some cases, partially substitute for a will. With a revocable living trust (also known as a revocable inter vivos trust or grantor trust), your assets are put into the trust, administered for your benefit during your lifetime and transferred to your beneficiaries when you die — all without the need for court involvement.
Most people name themselves as the trustee in charge of managing their living trust’s assets. By naming yourself as trustee, you can remain in control of the assets during your lifetime. In addition, you can revoke or change any terms of the trust at any time as long as you are still competent. (The terms of the trust generally become irrevocable when you die. However, in trusts created by married couples, some or part of the trust may continue to be revocable by the surviving spouse.)
In your trust agreement, you will also name a successor trustee (a person or institution) who will take over as the trustee and manage the trust’s assets if you should ever become unable to do so. Your successor trustee would also take over the management and distribution of your assets when you die.
A living trust does not, however, remove all need for a will. Generally, you would still need a will — known as a pour over will — to cover any assets that have not been transferred to the trust.
You should consult with a qualified estate planning lawyer to assist you in the preparation of a living trust, your will and other estate planning documents. Keep in mind that your choice of trustees is very important. That trustee’s management of your living trust assets will not be automatically subject to direct court supervision.
With a trust you can protect your estate from the high costs associated with probate. These costs include statutory attorneys fees, personal representative fees, publication, appraisals, court fees, and payment to secure a bond for the proceedings.
Gross Value of the Estate - Predicted Costs
$150,000 - up to $12,500 or more in special circumstances.
$250,000 - up to $18,000 or more in special circumstances.
$500,000 - up to $29,000 or more in special circumstances.
$750,000 - up to $40,000 or more in special circumstances.
$1,000,000 - up to $52,000 or more in special circumstances.
$1,500,000 - up to $64,000 or more in special circumstances.
$2,000,000 - up to $77,000 or more in special circumstances.
$3,000,000 - up to $102,000 or more in special circumstances.
$4,000,000 - up to $127,000 or more in special circumstances.
$5,000,000 - up to $152,000 or more in special circumstances.
$7,500,000 - up to $214,000 or more in special circumstances.
$10,000,000 - up to $278,000 or more in special circumstances.
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Company policies – Are there company policies that are particularly important to your business? Perhaps your unlimited paternity/maternity leave policy has endeared you to employees across the company. This is a good place to talk about that.
Executive profiles – A company is only as strong as its executive leadership. This is a good place to show off who’s occupying the corner offices. Write a nice bio about each executive that includes what they do, how long they’ve been at it, and what got them to where they are.
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