No matter your age or financial status, you can always benefit from having an estate plan for your family. While it’s difficult to think of what will happen in the event of premature death, estate planning will remove the stress on your family while receiving your possessions.
If you want the best for your spouse and children, you should develop a comprehensive plan. There is more to estate planning than your assets, so learning the various documents in an estate plan is necessary.
This article will cover what estate planning is and why it’s so important for your family.
What is Estate Planning?
When hearing the word “estate,” you may picture a large mansion with numerous cars. However, an estate is considered everything you own–such as your property, investments, cars, bank accounts, and other personal possessions.
By creating an estate plan, you will develop a detailed plan on where these possessions will go in the event of your death. Without a plan, the decisions will be made by state law and probate courts.
In many cases, the decisions made by courts don’t reflect your family’s needs and true desires. For the benefit of your family, you need to develop a plan that includes the necessary documents.
Most estate plans for families include the following documents:
- Durable Power of Attorney
- Beneficiary Designations
- Letter of Intent
- Healthcare Power of Attorney
- Guardianship Designations
Estate Planning Saves Time and Avoids Taxes
When you don’t have an estate plan, your family will need to wait an extended period to receive your belongings. As the probate courts determine what to do with your items, your assets remain frozen.
This legal process is incredibly time-consuming and can take months or even years to complete. If you want to save your family the headache and stress of this, you should create a will and list the beneficiaries to your investment accounts.
An estate plan will also reduce the tax burden on your family. Fortunately, California has no state estate or inheritance tax that affects heirs. You will still need to pay the federal estate tax and income tax, with an estate plan helping to reduce the burden.
Protect Your Children with Estate Planning
Estate planning is more than determining who receives your investment accounts. If you have young children, you can name who their guardian will be in the circumstance you and your spouse pass away.
While this situation is uncomfortable to think about, you can have peace of mind knowing they will be taken care of by someone you trust. By not including this in your estate plan, the courts will determine your children’s guardians.
Develop the Ideal Estate Plan for Your Family
If you want to ensure your family is protected, you need the help of an experienced team that specializes in estate planning. Our law firm will develop the ideal estate plan for your unique needs. Contact us today at 408-553-0801 for a free consultation!