As part of their estate planning, California residents may want to leave portions of their assets to family and charity, but they may also want to go beyond those two categories. Estate tax exemptions are higher than they used to be, so individuals concerned about taxes have more flexibility as to where they might direct their money.
For example, while the legal system primarily recognizes family as heirs, individuals have the option to leave less of their estate to family or even to disregard family altogether. Instead, an individual might opt to leave some or all of their assets to a partner they are not married to, friends or domestic employees. With this in mind, individuals who are estate planning might want to consider whether to expand their circle of beneficiaries beyond family.
Charity is another option, as the government continues to cut contributions to charities, and individuals who are estate planning might want to reconsider their charitable plans and where they might make the most impact. Individuals should also keep in mind that they may not want to make avoiding taxes their primary motivation. In some cases, it might be worth it to pay taxes if it means staying near family or keeping assets within a family.
A wise approach to estate planning may be to do research and then work with an attorney. This would mean that an individual would have access to the attorney's opinion balanced by their own research and consideration of their particular circumstances. For example, an attorney may make recommendations assuming an individual wants to keep taxes low when this is not the case. An individual who understands the reasoning behind this is better placed to explain their unique circumstances that might lead to a different approach to the estate plan.
Source: Wealth Management, "Beyond the Traditional Estate Planning 'Choices'," Patricia Angus, March 26, 2015