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Don’t overlook this when drafting an estate plan

On Behalf of | Oct 18, 2021 | Estate Planning |

While death is a part of life, it is often something individuals in California and elsewhere do not want to think about. Nonetheless, it is important to consider the inevitable, especially when it comes to understanding what will happen with one’s possessions after his or her passing. Estate planning is an important step to take. No matter a person’s age, it is never too soon to draft an estate plan as it provides protection not just for the individual but their heirs as well.

Estate planning basics

When drafting an estate plan, it is important to consider what documents to include. A major concern one has is how one’s property and assets will be disposed following their death. This means not only considering who will get each asset but how to best pass it on to them.

In some cases, this means considering the use of a trust. Thus, if one seeks to utilize a trust, it is important to consider a few factors. To begin, it may be helpful to consider the usage of two trustees. Co-trustees could help address the various needs and investments of the trust. Next, it may be beneficial to name two or three successors, as this could help to fill vacancies that could occur in the future. Additionally, one should plan for the removal of a trustee and provide for flexibility, as some heirs could only have a limited power of appointment.

What to not overlook

Because the rules that govern the inheritance of IRAs and retirement plans are rather complex, it is important to properly name the beneficiaries for these accounts. For those that are divorced or remarried, it is especially important to update an estate plan and beneficiary designations.

It is also important to not overlook personal property. Assets that are valuable are not the only ones to address in an estate plan. Some items may not hold monetary value; however, they could hold sentimental value. Thus, it is important to consider the belongings loved ones might want or those that one seeks to remain in the family. This could avoid future disputes and issues regarding these assets.

An estate plan is not something to just get out of the way. It is an essential document that can play a major role following one’s death. Therefore, it is not only important to understand what goes into drafting an estate plan but also what life events would deem it necessary to update one’s estate plan.