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.
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.
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.
When discussing estate planning manners, most tend to focus on ensuring that assets and property pass as easily and quickly as possible to loved ones. Wills and trusts are primarily used to accomplish the transfer of wealth upon a loved one's death. In some cases, however, these same estate planning vehicles can be used to accomplish the exact opposite.
In 1968, Dr. Martin Luther King Jr. was shot and fatally wounded. At the time of his death, King was 39-years-old and had roughly $30,000 dollars to his name. Today, Dr. Martin Luther King Jr. is widely known as one of the most prominent and influential civil rights leaders in American history. As such, his personal effects and writings are worth far more today than during his lifetime.
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.
When an individual dies, the terms of their will help dictate what happens to named personal belongings and assets. Probate is the process by which state law helps to manage, settle and distribute assets according to the terms laid out in a will. While probate is often a necessary and even helpful process, in some cases it can also be a lengthy one. There are, however, several ways an individual can pass along wealth and avoid the probate process.