A will is an important estate planning document. Through a properly executed will a person may leave items of property to their loved ones, establish guardians for their minor children and make bequests to the charities of their choice. A will outlines how a person would like their estate distributed upon their death, but unless it conforms to the laws of the state a person's will may be contested or even set aside.
Trusts are important estate planning tools that can allow individuals to place their assets in trust and for the benefit of others. The creator of a trust may place terms and conditions on how the trust beneficiaries may collect their trust income and different types of trusts may achieve different estate planning goals. This post will discuss one specific type of trust - spendthrift trusts - and will describe how some San Diego residents may use them to provide for individuals after the trust creators' deaths.
Drafting an estate plan has become an important step for individuals in California and elsewhere to take. While it is also a process that many seek to avoid until later in life, it has been proven to be an essential and necessary step to take as soon as possible. While that means taking the time to think about your death and what will happen following your death, failing to take the time to address this uncomfortable topic could prove to be problematic and harmful when it comes to your heirs and beneficiaries dealing with your estate after your passing.
Even though something is important, it doesn't mean that some won't avoid it. This is the case with estate planning. It is clear that it is an essential step to take; however, many try to delay the process as long as possible. An estate plan is used for more than just protecting one's assets. It is also a way to organize assets, understanding what you own and how your property will be treated in the event of you incapacitation or death.
Individuals make important decisions everyday. However, when these decisions impact an estate plan, it is imperative to ensure that the terms and details of these documents meet your needs and are in fact valid. One type of document many consider including in the estate planning process is a trust. A trust can come in a variety of forms and can take on various purposes.
As baby boomers age, they need to take the time to consider what their life after retirement will look like. While retirement is often a timeframe used to start drafting an estate plan, this is by no means a set time to take such measures. In fact, initiating the estate planning process sooner if often advised because we can never predict what the future might look like or what it might hold. And while individuals in California and elsewhere might think they understand what it takes to complete their estate plan, there are various obstacles to be on the lookout for.
Drafting an estate plan is more than just preparing for what will happen at your death. It helps articulate your wishes to your family members and beneficiaries in case you become incapacitated or suddenly die in an accident. Thus, estate planning is not only for the elderly. No matter your age, drafting an estate plan could be a very vital step to take.
Last week, we discussed some of the reasoning behind setting up a living trust and the basics of a living trust. While it is beneficial to have a living trust to avoid probate, it is also worth discussing that a living trust does come with its set of small inconveniences.
As we discussed last week, a trust is set up so that a trustee can properly allocate assets or property to a beneficiary, or the person receiving the assets or property. Traditional trusts are written while the trustor, or grantor, the person giving away the assets or property, is living and the assets or property is to be given out upon the trustor's death. One could also consider creating a living trust, often referred to as an "inter vivos" trust, since it is implemented while the trustor is still alive.
There are many things to consider when working on your estate planning. One option that many people consider is the establishment of a trust. A trust is created to help manage one's property and finances by making certain that it gets properly transferred to the people mentioned in the trust. Before we elaborate, there are a few terms that should be defined to make things easier.