Estate planning can be important no matter what your age and asset level. Most people begin to plan their estate when they are older and have more assets to consider, but younger people with less in the way of financial solvency can also benefit from planning for their estate. They can make changes as they age and their life takes different turns, but early planning can be a big benefit in a number of ways. Planning an estate isn't always just about finances, as there are other factors to consider.
If you're like most in Woodland Hills, then you've probably been told at least once in your adult life that you need to start thinking about estate planning. In the world of estate planning, the buzzword that everyone is told to avoid is probate. In order to avoid probate, advisors will often recommend putting your assets into a living trust. Yet this raises the question of whether or not you're insured against the potential failure of the bank holding your trust.
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.
The late Robin Williams had prepared for his eventual death with careful estate planning, drawing up an estate plan that included a prenuptial agreement, trusts and an updated will. Even his careful preparations did not prevent well-publicized squabbles. Estate plans focus on high monetary value items. However, the personal items often cause disagreements. Californians can learn three things from this example for their own estate planning.
When actor Philip Seymour Hoffman died suddenly on Feb. 2 at age 46, he left behind his life partner Marianne and their three children. His net worth was estimated at $35 million and, in 2004, around the time their first child was born, he executed a will leaving everything to Marianne.
We write a lot in this blog about the importance of estate planning, particularly when it comes to drafting a will and setting up appropriate trusts. While these certainly are important steps to providing individuals security and peace of mind, in some cases estate planning vehicles can be used to exploit the very individuals they are intended to protect.
It's a fact that few California residents want to contemplate, yet the inevitability of death is something we must all eventually face. While an individual isn't able to control many of the circumstances related to death, they can take steps to manage what happens to their assets.
Many California residents have likely failed to proactively address estate planning matters. The reasons for failing to draft a will or set up a trust are numerous. Some individuals simply don't want to contemplate end of life matters, others may feel they are too young to have a will or that they don't have enough assets to warrant drafting a will. The most common reason individuals avoid tackling estate planning, however, is that they simply don't know where to begin.