An estate plan is essential for everyone. For many, the primary purpose of creating such a plan is to ensure that their finances and assets are distributed according to their wishes when they pass away. But there are other reasons to create an estate plan besides money. Here are four of them.

Reason #1: Privacy Concerns

In many states, probate court proceedings are matters of public record. This means that any documents filed in connection with a probate case could be available for anyone to view. Such documents generally include wills and other estate planning tools that might contain sensitive information about your finances or private family matters. With an effective estate plan and the strategic use of various trusts, you may be able to avoid probate court altogether, thereby keeping your affairs private.

Reason #2: Providing for Minor Children

If you have children who are not yet adults, it is important that you have a plan in place should something happen to you and/or your spouse. In such a situation, the court would need to determine who will assume the legal guardianship of your children until they reach adulthood. Your estate plan can clearly designate who these guardians should be and provide directions on how assets should be used for their benefit while they are minors. Technically, this last part is a little about money, but caring for your children is about much more than financial assets.

Estate planning most commonly considers the property left behind by a recently deceased individual and how it should be disposed of, in addition to potential end-of-life situations and the care desired by the planner in the event of future incapacity. These topics can be challenging to contemplate, as they force the planner to contemplate their own mortality. Often overlooked is planning of a practical nature for how the family is to proceed in the immediate aftermath of the estate planner’s passing.

In California, there are legal mechanisms by which a person can effectively make arrangements for their own funeral services and the disposition of their remains. These topics can be even more difficult to contemplate, let alone establish concrete plans for. However, planning for funerary arrangements can not only keep important decisions in your hands but also provide significant benefits to your surviving loved ones. If you are able, it is prudent to make such arrangements during your own lifetime.

What is an Irrevocable Life Insurance Trust?

An irrevocable life insurance trust (ILIT) is a commonly overlooked and underutilized tool for individuals to ensure that funds adequate to cover funerary expenses will be available to their loved ones. An ILIT is a trust, but one that is funded posthumously by the proceeds of a life insurance policy. Upon your death, benefits paid out by your life insurance company can be placed directly in this trust. Importantly, ILIT funds may not be subject to certain tax burdens or other liabilities.

Being forgotten is a common fear associated with death. Everyone wants to be remembered fondly long after they have passed away. Aside from the immediate financial benefits, a desire to be remembered can be a driving factor for those who have flocked to Los Angeles seeking stardom. Luckily, you do not need to make it as an actor or musician to leave a lasting legacy. You can use your estate plan to continue benefiting not only your descendants for generations to come, but the community as a whole. Charitable giving is a noble way to continue serving your community long after you have gone. Business owners may have additional opportunities. If you are interested in leaving your mark on your loved ones and Los Angeles alike, you should speak to an attorney about how you too can build a legacy using your estate plan.

Your Estate Plan Can Help You Leave a Lasting Legacy

No matter who you are in life, you can do real good in the world after death. Some ways that you can leave a lasting legacy in your estate plan include:

• Gift-giving occasions - You may not be around for some important events in your loved ones’ lives, like perhaps a grandchild’s wedding. Using either a will or a trust, there may be ways to earmark funds so that your presence will be felt at these important events.
• Charitable giving - You have multiple options for posthumous charitable giving. You may of course leave a lump sum to a specific charity. Or, you could create a charitable trust that supports a particular cause you are passionate about. You can then authorize your trustee to make reasonable distributions as needed.
• Memorial scholarships - A great way to help deserving individuals in your community is to establish a memorial scholarship that can help disadvantaged students obtain higher education.
• Business planning - When you have done the sheer amount of hard work it takes to build a business from the ground up, you want it to still be there when your great-great-grandchild is old enough to take it over. Planning for your company’s continued success can help keep your family financially secure for generations to come.
• Donating big items - Charitable organizations and community efforts are always in need of big-ticket items, like cars and furniture. Your belongings can be enjoyed by and used to serve members of your community in need as long as the items endure.

As you can see, it is possible to create an enduring name for yourself with a bit of careful estate planning.

As we mentioned in our last blog post, having an estate plan in place can go a long way toward protecting both you and your loved ones. It is also important to discuss what can happen if you pass away without an estate plan. While creating a trust leaves you - and later, your chosen trustee - in control, you will have no say in what happens to your estate should you pass away without a plan. Your family members will have no choice but to go through probate. Probate is long, complicated, and often costly. However, going through it is the only way to distribute a decedent’s assets in the absence of an estate plan. Avoiding intestate probate is perhaps one of the greatest benefits of estate planning.

Consequences of Dying Without an Estate Plan

Those who pass away without an estate plan are termed “intestate.” During intestate probate, your family members will likely need to hire an attorney to guide the process. Because you did not leave any instructions for how your property should be distributed, California state law will control who gets what. Our state’s intestacy laws favor immediate relatives - mainly your spouse and children, or sometimes your parents.

Your closest relatives may or may not be the ones you want to inherit your entire estate. Unfortunately, intestacy law does not care if you have not spoken to your adult son in over 20 years, or whether you are estranged from your spouse.

If you are a competent adult, you should have an estate plan. Whether you are single or married, a parent or childfree, healthy or ill, young or old, you need an estate plan. Life is unpredictable. As much as we all wish that only elderly people in poor health passed away, we know that this is not the reality of life. No one knows when they will pass away or become incapacitated. Having both a testamentary plan and an incapacity plan in place can help reduce the distress your loved ones will experience should the worse come to worst. Doing this type of planning can also help ensure that your personal beliefs and wishes would be respected should you find yourself in a situation like a coma where you could not speak for yourself. Our lawyers can work with you to help you decide which documents you need given your current personal situation.

The Benefits of Estate Planning for All

Thinking about what your closest loved ones would go through if you were to pass away unexpectedly is not comfortable for anyone. Thinking about what you might go through if you were alive, but incapacitated, is not comfortable either. However, once you have an estate plan in place, you can stop worrying about these unlikely events, knowing that you and your loved ones would be protected. Benefits of making an estate plan for all include:

• Deciding property distribution - Even if you do not own much of any valuable property, many of your possessions are likely to hold significant sentimental value for your loved ones. You know that you would want the friend who was with you when you caught the ball at a major league game to keep the ball if you passed away, but the person who would likely inherit your estate by default may not.
• Reducing distress to loved ones - Having a strong estate plan in place can take some of the burdens of dealing with your property off your loved ones if the unexpected happened. With an estate plan, they are likely to have an easier time distributing your property. This way, they will also have the comfort of knowing that your wishes are being respected instead of having to guess what you would want.
• Incapacity protection - Many adults have strong opinions about what they would want were they to be left in a permanent vegetative state or experience another form of mental incapacity. Documents like a living will and powers of attorney allow you to make certain decisions in advance.

It does not take all that long to form an estate plan for most people. If you find it unpleasant, we can help you accomplish the task expediently so that you can go back to much happier thoughts, assured that you and your loved ones are protected.