It can be difficult and uncomfortable to think about what will happen to all your assets after you are gone. However, avoiding the process of creating an estate plan can end up putting a complicated burden on loved ones who would be tasked with sorting things out on their own.
There are many approaches to creating an estate plan that can give people peace of mind in knowing that their wishes will be carried out properly and make the process of probate easier on loved ones. Creating a will, medical directives and other parts of an estate plan is the first step. But there are other ways to ensure that an estate plan is clear and can effectively guide representatives of an estate through the probate process.
The first thing that people will want to do when it comes to their estate plan is to keep it updated and share the terms with the appropriate parties. By keeping the lines of communication open prior to an end-of-life event, any questions regarding stipulations or competency can be addressed before they are challenged in court. It can also be crucial to reassign beneficiaries to reflect significant life events such as death, marriage or divorce.
Another tip for creating a direct estate plan is to consider the effect it will have on those affected by the terms. This could mean funding a trust for minors instead of putting them in a position to have assets managed by a guardian appointed in probate court. It could also mean being cautious about including no-contest clauses or leaving people out of a will.
Finally, an estate plan should take state laws into account. For example, California is a community property state which can have an effect on the ownership of a person’s assets. Distributing assets can vary based on who is included in ownership of a property. There are also state requirements for the formalities that must be followed in completing a will or trust in order to make it legally enforceable. Inheritance and estate taxes can also vary, depending on the state.
These suggestions can be very helpful in completing an estate plan. And while it may seem complicated, an attorney can help guide a person through this process in order to ease the burden on all parties.
Source: LifeHealthPro, “10 steps for avoiding estate planning mistakes,” Ed McCarthy, June 6, 2013