Wills, Trusts and Estate Planning

Believe it or not, you have an estate. In fact, nearly everyone does. Your estate is comprised of everything you own— your car, home, other real estate, checking and savings accounts, investments, life insurance, furniture, personal possessions. No matter how large or how modest, everyone has an estate and something in common—you can’t take it with you when you die.

When that happens you probably want to control how those things are given to the people or organizations you care most about. To ensure your wishes are carried out, you need to provide instructions stating whom you want to receive something of yours, what you want them to receive, and when they are to receive it. You will, of course, want this to happen with the least amount paid in taxes, legal fees, and court costs. Despite the importance of having an estate plan in place, studies indicate that less than half of all Americans have one. If you have yet to sit down and create your own estate plan, now is the time to do so.

Many people mistakenly think that estate planning only involves the writing of a Will. Estate planning, however, can also involve financial, tax, medical and business planning. The intricacies around estate, Medicaid and tax planning are extensive. Not only does the attorney need a thorough knowledge of probate law, estate administration, trust, asset protection and Medicaid laws, they must also have an extensive knowledge of income tax, estate tax, gift tax, generation-skipping tax and excise tax laws. All of these areas intertwine and have a significant impact on your estate plan.

A Will is part of the planning process, but you will need other documents as well to fully address your estate planning needs. A comprehensive estate plan can do far more than simply provide a roadmap for the distribution of your estate assets when you die.

Knowing you have a properly prepared plan in place - one that contains your instructions and will protect your family - will give you and your family peace of mind. This is one of the most thoughtful and considerate things you can do for yourself and for those you love.

A Last Will and Testament is the foundation of any estate plan; however, most plans incorporate a wide range of additional estate planning tools and strategies designed around the creator’s specific needs and wishes. Some common additions to a comprehensive estate plan include:

• Incapacity planning – incapacity can strike at any time. If you failed to plan for the possibility of incapacity you have no control over who will make life or death decisions for you. You also gave up the ability to decide who will control your assets in the event of your incapacity.

• Long-term care planning – your odds of spending time in a long-term care facility go up as you age. Long-term care costs can wipe out a lifetime of working hard and saving unless you planned ahead.

• Business succession planning – whether you own a family farm, a small online business, or interest in a multi-national conglomerate, the future of your business is likely important to you. Including a business succession plan in your overall estate plan ensures that your business will be handled according to your wishes should you die or become incapacitated.

• Special needs planning – if you have a special needs child you must plan for your child’s future. To ensure that your child will benefit from much needed assistance programs such as Medicaid and SSI you must be careful with assets you intend to leave for your child’s benefit. Typically, this requires the creation of a special needs trust.

• Medicaid planning – the Medicaid program will help with the high costs associated with long-term care; however, you must fall below the program’s income and asset limits to qualify for benefits or you will be forced to deplete your own assets before Medicaid will kick in and start covering costs. A well thought out Medicaid plan can protect your hard-earned assets and ensure that you qualify for benefits when the time comes.

• Probate and tax avoidance – avoiding probate is a common estate planning goal because it saves your beneficiaries both time and money. By the same token, your estate plan can include various tax avoidance strategies aimed at reducing your estate’s exposure to gift and estate taxes, thereby leaving more assets for your loved ones.

The estate planning attorneys at Sowards Law Firm represent clients throughout the State of California including clients located in and around Oakland, San Francisco, and Richmond. To get started on your estate plan, contact the firm today by calling (408) 371-6000.

Estate Planning eBook