“Estate planning? That’s only for when I’m older or have more stuff.” If you’ve thought some version of this, you may be in for a surprise. Estate planning is important for all adults over the age of 18 in the state of California. A comprehensive estate plan protects you and your loved ones in the case of both incapacity and death.
State asset division
If you don’t have a comprehensive estate plan, the state of California has one for you. The state’s plan for distribution of your assets is outlined in the California Probate Code and your assets go to your closest blood relatives. The court supervised process to distribute your assets to your relatives is called probate. If you have beneficiaries who should not receive outright distributions or close family members who should not receive anything at all, you will want to create a comprehensive estate plan so that California state law doesn’t dictate who gets your assets after your death.
Plan for estate taxes
The estate tax exemption in California is currently over $23M per married couple and over $11M for single individuals. If the total gross fair market value of your assets exceeds these amounts, then your estate will be liable for estate taxes. A comprehensive estate plan will help you plan for the possible sheltering of assets to remove them from your estate, payment of estate taxes, and strategies to get assets into the hands of your beneficiaries as efficiently as possible.
Removing or restricting irresponsible heirs
You have worked hard your entire life to have a nice home and healthy bank and investment accounts. The last thing you want is to have an irresponsible heir take over your assets and waste them in a few months. By creating an estate plan, you can prohibit heirs from inheriting from your estate entirely or place restrictions on their inheritance, such as delayed distributions or requiring them to finish schooling before they can receive their inheritance.
Choosing to create an estate plan is the first step toward protecting your future. You should always have an experienced estate planning attorney by your side to help you navigate the legal obstacles you and your beneficiaries may face.