As Woodland Hills residents begin the process of estate planning, one of the first issues that's often brought up is who will act in their stead should they become incapacitated. This may often prompt some to assign a family member or friend with power of attorney. Yet handing over the right to make vital decisions on one's behalf is not a decision that should be taken lightly. Whomever one chooses to have power of attorney is given great authority over his or her affairs. This could lead some to question exactly how far this authority goes.
California residents who are concerned about issues with estate beneficiaries may wish to know the results of an estate planning survey of wealthy Americans. Their views on whom to leave their assets to and how much to give may be instructive.
California residents who are over the age of 18 may want to consider writing a will. A will is a part of most estate plans, and without one, the state often decides how an individual's assets are distributed after their death. A will appoints beneficiaries who will receive those assets, and those beneficiaries might be friends, family or organizations, such as charities.
California members of the Baby Boomer generation have traditionally been more concerned with maximizing income and planning for retirement than they have been with estate planning. However, as the boomers enter their sixth decade, it becomes more important to have a plan. This may help to protect their worldly possessions for the next generation and save them from certain difficulties as the details of the estate are worked out.
Some California residents may benefit by choosing to purchase cash-value life insurance policies as a part of their overall estate plan. Those most likely to do so are people who already have enough assets for their own retirements, are older and who are risk-averse.
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.
Some California residents may know that one facet of estate planning involves explaining to family members what the estate plan entails and what to do if that individual should die. Because an estate plan may be complex, there might be an easier way to take care of those details without unduly stressing family members.
Residents of California may wonder what is involved in trust administration. A trust has two parts, income and principal, and the administrator, also known as the fiduciary, is in charge of managing both of those parts. The principal consists of all the assets that are in the trust, while the income is paid out to beneficiaries. The beneficiary may also eventually inherit the principal or receive income until death. At that time, the principal may pass to another beneficiary.
While many California residents think that a will is the only document they will need to pass on their assets to beneficiaries when they die, there are other estate planning documents that can also be useful in a variety of circumstances. As one example, the importance of establishing an advance health care directive to ensure that the maker's wishes concerning the types of medical treatment that will be allowed in the event of incapacity is well established. Another type of document that can be applied to a variety of situations is a trust.