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Answers to Common Estate Planning Questions

Posted by Jessica Ward | Jan 24, 2024 | 0 Comments

As an estate planning attorney, my goal is to educate my clients and potential clients about the importance of estate planning, and what it can do for them. I believe estate planning is important for everybody, and want to squash the myth that it's only for those with a lot of wealth. Below are the most common questions I encounter and my answers.

I don't really have anything so why do I need an estate plan? 

Having an estate plan is a very broad statement. Estate plans include more than just a will and/or a trust. An estate plan is designed for your unique situation. This will take into account your assets, your family, your goals, and other important factors so that the proper plan can be implemented. It also includes important documents that allow you to nominate an agent so that if you are incapacitated (due to a health emergency, accident, or illness) your agent can act on your behalf to pay bills and take care of other important financial matters on your behalf, and to ensure your healthcare wishes are honored and communicated to your physicians.  

Can't I just use an online company to prepare my will and then just sign it?

Yes, this can be a good option if this is the only way you will put an estate plan together, and you know how to properly execute the documents,  and if you have a living trust, you understand how to fund the trust. I have seen a lot of people who use online services and fail to execute the documents properly, or fail to fund their trust with assets, which may make the trust useless. The other pitfall of using an online service is that the programs are made for the masses, and don't take into consideration your unique family situation, and the program cannot answer your questions. I always tell people if they are going to use an online company to be cautious and do your homework. 

I have beneficiaries designated on everything, so do I still need an estate plan?

Having beneficiaries designated is excellent. It is important to monitor all accounts with a beneficiary on a regular basis. Life happens, and relationships change, so be sure to review every couple of years to make sure they are up to date. I would also use caution if you have named a minor as a beneficiary, or someone who is a young adult, or those who have financial issues. A proper estate plan will take these things into consideration, and you can set up the age at which a beneficiary is to receive their inheritance. Additionally, an estate plan may have enabling language in case your beneficiary has substance abuse issues, is later deemed to have diminished capacity due to an accident and is receiving public assistance. This will allow someone to hold back money, or put the money in trust so the person will not lose their public benefits, or until they have overcome their substance abuse, or financial issues.

I own property in joint tenancy so I don't really need anything else, do I?

While it is true joint tenancy has a right of survivorship, it may not be the best way to accomplish your goals. A lot of married couples hold title in joint tenancy. This can have tax consequences for a married couple, and it does not provide for the next beneficiary after the last spouse dies. Most married couples that own real property together will benefit from a living trust to enjoy a step up in basis, which will minimize capital gains if the property is later sold. 

I already have a trust, I prepared it 10 years ago.

If you already have a living trust - kudos to you! However, it's really important that you review your trust and other documents every couple of years to ensure they still are in line with your goals. Laws that apply to estate planning are constantly in flux, keeping informed of the changes by reaching out to an estate planning attorney is a great idea to ensure that your plan is still working for you and your family. 

I already have a will, isn't that enough?

A will may be a perfect estate planning tool for your situation. However, be sure that you also have the financial and medical powers of attorney, and a nomination for a guardian if you have minor children. It is also important to review your current will every couple of years to ensure it still expresses your wishes. Additionally, if your estate's gross value exceeds $184,500.00 then it will have to go through probate. Probate is a process where the court determines if the will is valid, who the beneficiaries are, if there are any creditors, and if all estate expenses have been paid prior to distribution of the estate. This can be time consuming and expensive. 

I hope this helps give you a little insight as to some very common misconceptions people have about estate planning. If any of the questions above resonated with you and you have questions, contact my office at (925) 459-1777 to set up a free 30-minute consultation. 

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