Estate Planning is the process of gathering and distributing an estate for the orderly administration and disbursement of a person's estate. The process includes taking actions that will minimize taxes, avoid Probate Proceedings and distribute assets to the appropriate beneficiaries.
A proper estate plan will:
- Keep the client's personal needs and desires in mind,
- Determine who manages the trust assets,
- Make personal and health care decisions if you are unable to do so for yourself
- If necessary, gift assets during your lifetime
- Determine, who receives your assets after your death and how they receive it, while considering you personal needs and desires in mind
- Take into account the tax consequences
- Avoid Probate
Estate Planning Tools
A Will and/or Living Trusts are the traditional tools of estate planning. A will and/or a Living Trus, usually play a central role in the planning of an estate. Although wills and trusts are commonly used tools, they are not the only tools available to an estate planner and an estate plan should not necessarily be considered proper or complete just because it includes a will and/or a trust.
Other tools which may be used during an estate plan include the following:
- Advance Health-Care Directive
- Co-ownership arrangements, such as joint tenancies, tenancies in common, partnerships, and community property;
- Disclaimers;
- Durable powers of attorney
- Gifting
- Life insurance;
- Life estates;
- Spousal Agreements;
Which of these tools is proper for estate plan depends on a wide range of factors, including needs and objectives, family, the characteristics and size of the client's estate, and most importantly, the client's own wishes.
Typical California estate planning package
A typical Estate Plan provided by a California estate planning attorney includes the following:
(1) Revocable Living Trust and Ancillary Trust Documents (in modern Estate Planning, the majority of estate plans drafted feature Revocable Living Trust);
(2) Pour-Over Will;
(3) Durable Power of Attorney for Property;
(4) Advance Health-Care Directive;
(5) Trust Funding Documents: Deeds and other transfer documents for the property initially transferred to the trust; and
(6) A letter of instruction explaining how the trust is to be operated and funded.
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