An Estate Plan is really a collection of tools, and the right set of tools varies depending on your circumstances.
At a minimum, an estate plan will usually contain; a will, a power of attorney and an advance health care directive.
If your total assets value in excess of $150,000 a living trust or another form of a trust may be adviseable.
If you die without a valid will, your estate will be distibuted according to the laws of intestacy.
Who inherits your estate will depend on your marital and family situation. In California, the rules for distributing an intestate estate are found in
the California Probate Code.
Estate Plan Basics:
1. Wills - a will not only gives you the opportunity to distribute your estate, but it can also be used to nominate a guardian if you should die with minor dependent children. Wills can also contain your wishes for your funeral arrangements and
preferences. Even if you have a trust, a will is still a component of a basic estate plan.
2. Powers of Attorney - a power of attorney authorizes someone else to act as your agent in the event that you become incapacitated. You determine the extent of the powers, and when they take effect.
3. Advance Health Care Directive - an advance health care directive lets medical providers know your wishes regarding life sustaining treatments in the event that you cannot speak for yourself.
4. Trusts - the most common form of trust is the revocable living trust. Putting property into a trust can allow that property to pass on to beneficiaries without the need for a formal probate.
Probate is a court supervised process of distributing assets and the costs of probate are based on the gross value of your estate. In addition to being costly, probate can take many months to complete.
Which plan is right?
The right estate plan depends on your individual situation. In addition to making sure that you have the right documents in place, a complete estate plan may include insurance as well as a review of any bank, brokerage or retirement accounts.
I encourage you to visit the following sources of additional information:
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