Another purpose of estate planning is to ensure that your assets are transferred to their appropriate beneficiaries. Estate planning is about empowering people to make their own decisions about their future and the future of their loved ones. The following are 5 of the most common reasons people decide to create an estate plan. Estate planning is much more than deciding who to leave your things to, it's about taking care of your loved ones when you're no longer here.
Overall, there are two main reasons why you might want to protect your beneficiaries. First, the beneficiaries may be minors, in which case state law (and good practice) requires that a guardian or curator be appointed to oversee the child's needs and finances until they are of legal age (18 in New Mexico). However, as we all know, in some cases, adult beneficiaries also need protection, which brings us to the second main reason why people may want to consult an estate planning lawyer. In some cases, you may want to protect your adult beneficiary from poor decisions, outside influences, creditors, or even your spouse.
You can isolate your beneficiary's inheritance from an authoritative spouse or partner who could waste their inheritance or possibly take it up in a divorce. Estate planning is a type of agreement in which a person decides who will own and manage their assets once the person has died or is incapacitated. Estate planning is important because it eliminates the burden of legal heirs having to pay the taxes of transferring assets if the estate was not planned. If the beneficiary is a minor, a guardian is assigned until the minor reaches 18 years of age.
Revocable and irrevocable trusts are two of the most common types of estate planning trusts. A revocable trust, as the name suggests, can be adjusted, reviewed, or canceled entirely. These types of trusts are beneficial to the grantor, as they avoid any legal battle. However, the grantor's creditors may have access to the estate by seeking a court order.
While in a revocable trust, a creditor can access the estate by court order, an asset protection trust protects the grantor from this type of risk. After the assets are transferred to the trust, the grantor or creator of the trust does not become the beneficiary. While this measure will give up some control over your assets, it's a good second level of protection should future creditors come forward and try to recover part of your assets. When it comes down to it, deciding who will inherit your estate is an important decision and an important part of life planning.
Two of the most common special circumstances that can affect estate planning decisions are blended families and concerns about families with special needs. Modern Wealth Law is a full-service estate planning and probate law firm with main offices located in Costa Mesa, California. Proper estate planning will help ensure that your assets go to your children and grandchildren, not to your spouse's new husband, wife, and other new family members. If you die without a will, which is a vital part of an estate plan, the courts will decide who keeps your assets.
If estate planning was ever considered to be something that only people with high net worth needed, that has changed. Whether it's your family home, a second vacation home, stock portfolios, real estate investments, or even your most prized possessions, there are many different things you can have that will be included in what is considered your wealth. If an estate consists of substantial assets and the owner wants to donate to charity, there are several ways to incorporate those philanthropic goals into an estate plan. Therefore, with an estate plan, the grantor can reduce fees and taxes, which will help prevent more money from being taken out of the estate to pay those fees and taxes.
This is especially useful if you work in an industry that often faces litigation, such as commercial or residential real estate or in the medical field. While a will is a cornerstone of estate planning, some people may need something more extensive, and if so, a trust can be beneficial. By having a succession plan to designate who inherits what, you and your family members can avoid a potential mess by leaving things to chance in the court system. Your estate plan should not be standardized, but individualized, based on your unique goals and circumstances.
Participating in estate planning can be an important activity at various points in your life; there is no ideal age to start the process. It is essential for estate planning to transfer assets to heirs in order to create the lowest possible tax burden for them. . .