When you think of estate planning, you can imagine someone very rich and believe that this does not apply to you. estate planning is one of the key areas of financial planning that you must address throughout your life. To reiterate, estate planning isn't just for the rich. It's about putting in place a plan that will protect you and everyone you love, regardless of your wealth.
Everyone has a heritage, and all their assets, both physical and intellectual, form that heritage. You don't have to be rich or have a certain amount of assets to use the word “wealth”. People think estate planning is for the rich only because they usually hear about it in that context; a film shows a wealthy family gathered around a lawyer reading from a will, an actor's estate gives permission to use his image, etc. Actually, you have a property even if all you have is the clothes you're wearing.
While it's vital to create a plan for your estate if you have a lot of assets and money, it's also important to develop a plan if you don't have many. Although estate planning is very important to the rich, proper estate planning is needed for clients across the wealth spectrum. A common misconception about estate planning is that only “wealthy people need it. In reality, there are countless benefits associated with having a comprehensive estate plan no matter what your tax category.
In most situations, it's much less expensive to have an estate plan than it is to try to go through the probate process to manage and distribute your estate. In a nutshell, estate planning is a framework for determining who receives your belongings, how much you receive and when you receive it. It may seem like a lot now, but the time you spend planning your estate today will make the future easier and cheaper for your family. Even those with minimal savings may have significant assets or particular requirements that require estate planning.
Assets with a designated beneficiary, such as IRAs, 401 (k) plans, and annuities, allow the owner to name a beneficiary and avoid the probate process. If you are single and have no children, it is very likely that your estate will pass to your next biological family member according to state law. These are your plans, and the agent operating on your behalf only ensures that they are carried out the way you choose during your lifetime. An irrevocable trust is a trust that allows the creator of the trust to obtain the assets placed in the trust outside of his estate and not be subject to any estate tax.
An estate plan doesn't have to be complicated; in fact, it can be very simple, with just a will stating who gets what after death. If you want your partner to inherit from you or could make medical decisions for you if you become incapacitated, you need an estate plan. We can help you create a living will and trusts, determine what property may be subject to probate, and discuss additional aspects of your estate that you need to address, such as contacting other agencies to arrange life insurance or pre-paying funeral expenses. The estate planning process begins with understanding where a customer wants their assets to go when they die.
Without a proper estate plan, your spouse, children, and stepchildren may disagree on the distribution of your estate. Rhyne is a lawyer practicing estate planning and trust administration in Riverside and Paso Robles, CA. It usually lists all significant real estate and personal property owned by a person along with instructions on who will receive each item. Because they live an average of six to eight years longer than men, more women have to make end-of-life plans after the death of a male spouse.