What does estate planning mean to you? Like most people, the answer to this depends on your age, health, wealth, life circumstances and goals. Many people believe in the misconception; estate planning is for the elderly. This simply isn’t true as discussed below:
If you are Young and Single – California probate code will determine who your estate should go to unless you declare otherwise through your executed estate plan. If you are young and single without children, your estate will be distributed to your parents.
If you are Unmarried but Committed – If you are in a committed relationship but not legally married and you want to leave your estate to your partner, you need an estate plan. Without one, despite your wishes or intention, California probate code will give your estate to your closest relatives, not your partner.
If you are Married – If you are married, you may hold all your property as joint tenants with right of survivorship and depend on the law to transfer your property to your spouse. However, for married couples with larger estate values and real property, establishing an estate plan is beneficial to avoid probate at the death of the first and surviving spouses, preserve capital gain step-up in basis for the entire property on the death of the first spouse and avoid property tax reassessment. Additionally, you can take advantage of potential tax saving benefits including the use of the marital deduction and tax shelter planning to reduce owing federal estate tax.
Married with Children – If you have minor children, one of your biggest concerns should be who will serve as guardians if you and your spouse are unable to care for them. Without the appointment of guardians in a will, a court may appoint someone who you would not otherwise choose. Additionally, upon your death, your estate will be distributed to your children as long as they are legal adults whether they are financially responsible or not. As a parent, you know your child better than the law. If you want to determine when your child should benefit from your estate, establishing a plan is necessary.
The reasons for establishing an estate plan are ageless. A properly drafted estate plan provides for you the comfort of knowing your loved ones will be financially taken care of.
For more information regarding the benefits of an estate plan call our office to schedule an appointment.
Reference: http://www.valuewalk.com/2013/10/estate-planning-101/
