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Estate Planning
Wills & Trusts

When you plan for the future, you are planning for your children and loved ones’ futures as well. You are taking affirmative steps to avoid your heirs and other individuals from encountering lawsuits or devastation as a result of a failure to plan. It is necessary to decide who can act for you in the event that you cannot.

You need to make decisions with reference to whom you trust to make your financial and health resolutions. You have worked hard for your possessions. It is vital that you elect who will inherit these assets and when they will inherit them. When you do not plan for the future, the government determines who inherits your estate. The courts will decide who will raise your minor children.

Understanding the Big Picture

An Estate Planning attorney can help you understand the big picture and plan your estate accordingly. Your estate is the total value of all of the assets you own. Estate planning is defining exactly how your assets will be distributed and to whom.

Wills

A Will (Last Will and Testament) is the most familiar component of an estate plan. A will is a testamentary instrument that allows one to create instructions on how one wants the assets that will survive him or her to be distributed. The creator of the Will, or testator, names the beneficiaries and the person(s) who will administer the estate, or executor.

The Will is kept in a safe place and after the testator passes on, the executor administers the estate through probate, or the court system. Although probate requires administration through the court system, which can be costly and time consuming, there are some reasons why one may still need a Will.

Advantages Of a Will:

  • Appoint a guardian to raise your minor children
  • Bequest (or gift) assets that are not in the trust instrument (either because you do not currently own the property or the property is not suitable for a living trust) - This is considered a backup Will. - Pour-over Wills can place any or all assets in a trust
  • Divorce automatically revokes bequests made to a former spouse

    Disadvantages Of a Will:

  • The Probate Process - This can be costly and burdensome.
    - Note: If you own property in more than one state, your Will may have to be probated in each of those states. - Your financial affairs become public record through the probate process
  • Vulnerable to legal challenges or contests by a disgruntled heir

  • Trusts

    A revocable inter vivos trust is commonly referred to as a living trust. As the name implies, it is created during the settlor’s (creator of the trust) lifetime. A living trust can be an effective and useful estate planning device.

    The trust instrument allows one to define how his or her assets will be distributed when he or she passes on. Typically, the settlor names himself as the trustee and names a successor trustee in the event of death or incompetence.

    Like a Will, a living trust allows the beneficiaries to avoid the burden of probate and can have some tax saving benefits. Over years, living trusts have grown in popularity and are often preferred over Wills.

    Advantages Of a Trust:

  • Avoids probate
  • At the settlor’s passing, the trust property transfers with minimum delay
  • Low maintenance costs
  • Difficult to legally challenge
  • Trust instrument can name a successor trustee if current trustee becomes incompetent.
  • Fairly easy for settlor to make changes to trust instrument
    ,

    Disadvantages Of a Trust:

  • The upfront costs of creating a trust are more than the upfront costs of a Will - There are filing fees involved with transferring title of the property
  • The time and effort required to transfer property to trust
  • A trust does not automatically remove a former spouse as a beneficiary

    BEYOND THE WILL AND LIVING TRUST

    If you are a few or more years from retirement, it is also a good idea to review your retirement plan while you are doing your estate planning.

    Knowing generally what your retirement plan will provide at the time of retirement, and whether this amount will allow you to maintain a comfortable standard of living after retirement, is of paramount importance. Jones Legal has the tools to assist you in this area as well.

    During estate planning, one may also decide to execute an advanced health care directive (AHCD) or a durable power of attorney. An AHCD is a legal instrument that gives instructions to your physician and other health care providers as to the circumstances under which you want life sustaining treatment provided, withheld, or withdrawn.

    A durable power of attorney is a legal document where the principle elects an agent to act on their behalf on matter defined in the document (usually health care and finances). A durable power of attorney remains in effect should the principal become incapacitated.

    An AHCD is different from a durable power of attorney for health care because it does not cover anything besides your wishes for life sustaining treatment.

  • Important Note:

    Not all Wills are required to go through probate. California allows an exception for estates valued under a certain amount. Furthermore, not all property or assets are counted toward this limit. Therefore, a Will may be a better option than a living trust depending on the characteristics and value of your estate. We can review your circumstances to determine the better option for you.

    AN ESTATE PLAN MAY ALSO BE COMPRISED OF THE FOLLOWING:

  • Life insurance policy
  • Funeral plan
  • Estate Tax considerations for large estates
  • Gift Tax considerations and strategies
  • Other types of trusts include, but are not limited to: - Irrevocable Life Insurance Trusts - Ongoing Trusts - AB Trusts / Bypass Trusts / Credit Shelter Trusts - QTIP Trusts - Marital Deduction Trusts - Children and Minor’s Trusts - Spendthrift Trusts - Charitable Trusts

    Jones Legal can assist you in navigating the estate planning process which can be a daunting undertaking on your own. We listen carefully to discern your needs, goals, and wishes to devise the right estate plan for you.



  • Disclaimer: The information and material provided on Jones Legal's website are intended for informational purposes only. They are not intended as legal advice, or intended to establish an attorney/client relationship, and should not be construed as such.