Important Reasons to Consider an Estate Plan
Avoiding Conflict
Avoiding conflict between your heirs can be accomplished with a specific estate plan. Careful estate planning can help you to assess your personal needs and circumstances, and resolve such issues as choosing your beneficiaries, deciding who should be your executor or trustee, and resolve other questions such as providing care for minor or disabled children, providing for a spouse or a domestic partner.
Reducing or Eliminating Estate Taxes -An Important Issue in 2010-2011
The most common estate tax saving trust is the AB trust, also known as the bypass trust. An n AB or bypass trust can significantly reduce federal estate taxes when couples have a combined estate worth more than the federal estate tax threshold. The estate tax rate may go to a maximum of 55% in 2011 with only $1,000,000 of estate value exempt from taxation.
Avoiding Probate
Avoiding probate is one of the most common reasons why people seek out the advice of an estate planning attorney. Probate is a legal proceeding that is used to wind up a person's legal and financial affairs after death. A well drafted estate plan can avoid costly legal fees and lengthy probate proceedings.
Controlling Your Estate
Establishing an estate plan gives you the power to accomplish the goals you have in mind, such as providing support for a spouse or domestic partner, providing for a child's college education, or making gifts to a charitable organization.
Premarital Agreements
Premarital agreements are enforceable contracts that define the rights and responsibilities of the spouses or partners during the marriage, separation or divorce. They cover areas such as wealth acquired prior to the marriage, ownership of property and predetermination of spousal inheritance rights. It is important to understand your rights as a premarital agreement can supersede California family law.
Taking Care of Health and Financial Issues
The Advance Health Care Directive is a document that names an individual who is authorized to make decisions regarding your health care if you become incapacitated or are unable to make these decisions for yourself.
Durable Power of Attorney
This document allows you to grant authority to the individual you appoint to manage your financial affairs such as writing or depositing checks, paying bills and making mortgage payments. You may also grant more authority to your appointed agent such as the power to finance or sell real estate.
GST Trusts
Generation-skipping trusts leave property in trust for grandchildren and avoid estate taxes on the trust property when your children die.