Do I Need an Estate Plan?

Whether or not you need a California estate plan depends on your individual circumstances, financial situation, and personal goals. However, for many people, having an estate plan is advisable and can offer several benefits. As a Folsom estate planning lawyer, I have seen a countless number of individuals with their own unique backgrounds and desires.  Here are some factors to consider when determining if you should have a California estate plan:

1. Asset Ownership: If you own property, financial accounts, investments, or valuable assets, an estate plan can help ensure these assets are managed and distributed according to your wishes after your passing. Without a plan, the state’s intestate succession laws will dictate how your assets are distributed, which may not align with your preferences.
2. Minor Children: If you have minor children, it’s essential to designate a guardian for them in your estate plan. This ensures that someone you trust will care for your children if you and the other parent are unable to do so.
3. Incapacity Planning: Estate planning isn’t just about what happens after you pass away. It also includes preparing for potential periods of incapacity. Through documents like a durable power of attorney and an advance health care directive, you can appoint individuals to make financial and medical decisions on your behalf if you become unable to do so.
4. Avoiding Probate: An estate plan can include strategies to minimize or avoid the probate process, which can be time-consuming and costly. Methods such as revocable living trusts and beneficiary designations on financial accounts and insurance policies can help assets transfer smoothly to your chosen beneficiaries.
5. Beneficiary Designations: Ensuring that your beneficiary designations on retirement accounts, life insurance policies, and other assets are up-to-date and align with your current wishes is part of a comprehensive estate plan.
6. Tax Planning: For larger estates, estate planning can help minimize estate taxes at the federal level. California does not levy a separate estate tax. As of 2024, if an individual’s estate is larger than $13,610,000, it will be subject to a federal estate tax. Proper planning can help reduce potential tax liabilities.
7. Charitable Giving: If you have charitable intentions, an estate plan can include provisions for charitable contributions and establish charitable trusts or foundations.
8. Special Needs Planning: If you have a loved one with special needs, an estate plan can include a special needs trust to provide for their long-term financial security without jeopardizing their eligibility for government benefits.
9. Family Dynamics: Estate planning can help address complex family situations, such as blended families or estranged family members. It allows you to clearly specify your intentions and potentially prevent disputes among heirs and beneficiaries.
10. Privacy: Without an estate plan, the distribution of your assets through probate becomes a matter of public record. An estate plan can help maintain the privacy of your financial affairs.
11. Peace of Mind: Having an estate plan in place can provide you with peace of mind, knowing that your affairs are in order, and your loved ones will be taken care of according to your wishes.

Summary

Keep in mind that estate planning is not one-size-fits-all. It should be tailored to your specific needs and goals. Consulting with an experienced estate planning attorney in Folsom can help you assess your situation and create a plan that addresses your unique circumstances and objectives. Even if you think your estate is relatively small or straightforward, having a basic estate plan can still be valuable in ensuring your wishes are followed and your loved ones are provided for. If you have any questions regarding the estate planning process, please call us or send us a message for a free consultation.