What Are the Basics of Estate Planning?
Estate planning is an essential step in securing assets so that they will pass on to those you care about in the event of your death or incapacitation. The process of estate planning may seem daunting, but it doesn’t have to be so. Learning the basic procedures involved in estate planning will put you on the path to making important decisions about your future with clarity and confidence.
If you are in need of assistance with making future arrangements for your estate, one of the experienced estate planning attorneys at Bochnewich Law Offices, APC, would be happy to speak with you. Our attorneys are skilled at representing clients in all matters involved in sophisticated estate planning.
What Is an Estate Plan?
Most people know about wills and trusts and how they are used to relay the important details of the final wishes of someone when they die. While both of these documents may be a part of someone’s estate plan, neither offer the full scope of solutions offered in a comprehensive estate plan.
An estate consists of everything you own, including your home (and other properties), vehicles, bank accounts, financial investments, life insurance policies, furniture, and other material possessions. An estate plan allows you to protect these assets that you have worked hard to acquire over the course of your life.
With an estate plan, you can determine how your assets will be distributed to the people and organizations you love and care about. An estate plan goes far beyond a will or a trust because it covers the management of your personal and financial affairs as well as the medical directives that you wish to set in the circumstance that you are alive but unable to make those decisions yourself.
Making decisions and designations for your health and assets while you are alive with an estate plan benefits you and those you love. In your estate plan, you can make your intentions and desires clear so that your final wishes may be honored to your standards.
Who Needs an Estate Plan?
Everyone can benefit from an estate plan. Planning for the future should not be viewed as something that is exclusive to wealthy people. All individuals should take the time to make plans that will help loved ones avoid complications tying up their final affairs.
If you are ever rendered incapacitated, your estate plan can give your family directions to act on your behalf and make sure you are given the medical care that you want to receive. Your estate plan can also serve as a way for you to establish guardians to care for any living dependents you have, eliminating uncertainty regarding their well-being if you are no longer able to care for them yourself.
If you have dependents that you wish to safeguard after your death or physical incapacitation, an estate plan can help you make preparations.
How Do You Create an Estate Plan?
Creating an estate plan requires forethought and guidance from professionals who specialize in assisting individuals in matters related to estate planning. An attorney who practices estate litigation would be ideal for providing guidance in planning your estate. If you live in Southern California and need estate planning services, Bochnewich Law Offices, APC is here to help.
Common Estate Planning Documents
The following documents are critical components in drafting an estate plan. Each document represents an essential detail of your final wishes, and when combined, these documents make up a comprehensive estate plan.
Guardianship Documents – Documents that outline your wishes regarding who will care for your children or other dependents if you are no longer able to care for them due to incapacitation or death.
Will – A legal document that declares your last wishes for your assets.
Trust – A legal three-party agreement that allows the first party (you) to give the second party (your designated trustee) the right to hold and eventually distribute assets and property on your behalf to the third party (your beneficiaries).
Financial Power of Attorney (POA) – A legal document that gives someone power over your finances.
Durable Power of Attorney (POA) – Another form of financial power of attorney, which gives another person legal rights to handle non-medical affairs on your behalf. “Durable” in this case means that the POA is valid even when you are in a state of incapacitation.
Advance Healthcare Directive (AHCD) – Sometimes called a living will or medical power of attorney. This directive states which medical actions (if any) should be taken if you are unable to make those decisions. An AHCD works to combine the legalities of a living will and a medical power of attorney to allow you to give medical instructions as well as designate someone to make medical decisions on your behalf if needed.
HIPAA Authorization – This form gives consent for a third party to have access to your medical records.
Estate Tax Planning
Estate planning should also include planning for taxes associated with real estate and other property. Ultimately, your plan should allow you to cover tax costs while leaving your beneficiaries the most you possibly can.
The types of taxes addressed in your estate plan may include:
Estate taxes – Any state and federal taxes taken out of the estate after your death.
Inheritance taxes – Taxes beneficiaries must pay when they receive inherited assets.
Gift taxes – Taxes applied to gifts that exceed a certain dollar amount and are paid by the party giving the gift.
Understanding the tax procedures involved in estate planning can help you avoid probate and spare your estate from incurring hefty taxes.
Plan for Your Future with Bochnewich Law Offices, APC
We understand how overwhelming the estate planning process can be if you are unfamiliar with what is involved. The experienced attorneys at Bochnewich Law Offices, APC take great pride in providing guidance to clients in need of assistance in matters of estate planning. Contact our offices today for a consultation. We would love to help you plan for your future with confidence and provide legal support to ensure you have peace of mind regarding your final affairs.