We all have belongings, such as a home, other real estate, a car, bank accounts, investments, life insurance, furniture, jewelry, art, and other personal possessions. This is our “estate”. If we do not make a plan, when we die, these possessions will go through a process called probate, which is lengthy and costly. If you die without a trust or a will, your estate will go to the people designated in the Probate Code.
You can decide who gets what and when via a trust or a will. With estate planning you will be able to ensure that your estate goes to your loved ones and/or the organizations you care about. In order for this to happen you need properly written documents stating who you want to receive all or part of your estate, what you want them to receive, and when they would receive it. You also want to minimize the tax and legal costs that your loved ones will face. You want to make it as easy as possible for them. Most of the time this process involves complex legal decisions. You want an attorney to help you determine your goals and provide a customized estate plan that will achieve your goals.
An estate plan usually consists of:
- A Trust
- A Will
- A General Power of Attorney
- An Advance Health Care Directive (which includes the “Living Will”)
- A HIPAA Authorization and Waiver
- Final Disposition Instructions (i.e., “burial instructions”)
- The Instructions for the Distribution of Personal Property
- The transfer Deed(s) if there are any homes or other real property
The trust can be revocable, meaning it can be changed during the lifetime of the person(s) who makes it, or irrevocable, meaning that it cannot be changed. Sometimes other documents or estate planning vehicles are needed, such as grantor retained trusts, intentionally defective irrevocable trusts, dynasty trusts, gifting programs, LLCs or other business organizations, pre-IPO/acquisition planning, asset protection planning, charitable trusts, and private foundations.