Someone doesn’t have to be rich or old to have an estate plan. Most adults have more assets than they realize and Mary Ann Tardiff, the Atascadero estate planning attorney recently released the answers to the most commonly asked questions about estate plans.
Some of the most common questions people ask when the subject of estate plans comes up in a conversation include:
- “Why do I need an estate plan? I’m not old.”
- “I don’t have anything, why do I need one?”
- “How do I get started?”
- “How do I change the estate plan if something happens?”
“Most of us don’t realize how much we have in assets until we sit down and start making a list. Age has very little to do with it,” said Tardiff. For example, a young, single professional may have a retirement plan and a life insurance plan with his or her employer. This person may also have other assets such as an investment account, a checking and savings account, a few inherited pieces of nice furniture, some jewelry, a mountain bike, or a pet. What happens if this person becomes incapacitated or dies? Who gets the benefits of the retirement plan and insurance? Who takes care of the pet or inherits the heirloom furniture, jewelry, or expensive bicycle? Who can make decisions on this person’s behalf and pay the bills in the event of incapacitation? The Atascadero estate planning attorney can provide the legal guidance to make sure all the assets are protected and distributed as the individual wishes.
At a minimum, an estate plan includes a will, an Advanced Health Care Directive (AHCD) and appropriate powers of attorney designating who can make health care and end-of-life decisions and who can have access to personal funds to pay bills while the individual is still alive. Depending on the total value of the estate, a trust may be advised as well.
In California, assets over $184,500 are subject to probate if the individual dies without a will and a trust. Even if the person dies with just a will, any estate valued at over $184,500 is still subject to probate proceedings. The probate court is not obligated to follow the decedent’s wishes as they are set down in the will, however, when the assets are in a trust, the estate bypasses probate.
California Probate Code specifies an order of inheritance if there is no will or if the will is contested. For example, if the expensive mountain bike was intended to be given to a favorite niece but there is no will or trust, the bike might be given to a parent or sibling and, depending on family dynamics, the relative with the bike might not give it to the intended person. The same thing can happen with investments, furnishings, a home if one owns a home, and other assets.
Starting an estate plan at any age is the foundation for the future as more assets are accumulated. It’s easier to add assets to an existing plan than to sit down and try to list everything that has been acquired over a span of many years.
Estate plans can be modified at any time and there are certain life events that mean a review is in order:
- Getting married or divorced.
- A new job or a promotion.
- Buying new real estate.
- Adding a child to the family.
- Setting up guardianships for dependent children or dependent adults.
- College funds for the children.
- Collections such as art and jewelry are assets.
- Additional retirement funds, insurance policies and investments.
Mary Ann Tardiff assists clients with assessing their estates and setting up complete estate plans. A well-organized estate plan and trust bypass probate and makes sure that the estate is managed and distributed according to the decedent’s wishes upon death. A revocable trust remains under the control of the individual as long as he or she is alive. Beneficiaries can be added or changed. Assets can be added or removed and any other changes made.
A consultation with the Atascadero estate planning attorney is the way to get started. Every question is answered and you receive a thorough understanding of the benefits of an estate plan.