Universal Goals And Strategies For Effective Planning

Estate planning is a personalized process that greatly depends on your specific circumstances. However, there are some general goals that apply to everyone. In this chapter, we’ll discuss them and touch on other things that generally apply to everyone who engages in estate planning, regardless of their specific circumstances.

Honing In On The Ultimate Goal Of Proper Estate Planning

The ultimate goal of proper estate planning is generally to facilitate a seamless transition of assets to your beneficiaries while minimizing potential complications, taxes, and legal challenges. How you make this happen will depend on your specific situation. What are your goals? What are your concerns?

Looking Out For Your Children

For people with young children, their primary goal will likely be ensuring their children’s financial security in the event of untimely passing. This could involve setting up trusts to manage and allocate funds for the children’s education, healthcare, and daily needs.

Setting Up Long-Term Care

Contrast this with older people who are approaching retirement or are already retired. They’re far more likely to be focused on long-term care, especially if they anticipate needing assisted living or are concerned about qualifying for something like Medicaid or Medi-Cal to cover end-of-life care expenses. They might also be keen on preserving assets for future generations, such as grandchildren.

A Quick Word About Medi-Cal Trusts

In the past, Medi-Cal Trusts were commonly used as a strategy to help clients become eligible for Medi-Cal benefits after a certain period. Under current laws, assets held in a living trust at the time someone dies may be protected from Medi-Cal recovery.

This means that if you have received Medi-Cal benefits or other government-assisted plans, assets held in a trust may be shielded from Medi-Cal recovery, meaning you could reap potential savings on end-of-life care costs.

Conversely, assets that pass through probate may be subject to Medi-Cal claims to recover the costs of care provided. Placing assets in a trust can be a strategic move to safeguard against Medi-Cal recovery and preserve assets for beneficiaries.

Providing For Loved Ones With Special Needs

We assist with a decent amount of estate planning for families with members who have developmental disabilities as well. Their estate planning often revolves around safeguarding the well-being of these vulnerable family members – and understandably so.

It is far too easy for their special needs family members to be lost in the system and unable to advocate for themselves or otherwise handle matters on their own. Special provisions like special needs trusts, appointing trust protectors, or pre-selecting professionals can ensure continued care and protection for disabled family members.

Attorneys Taylor and Sophia Preston experienced lawyers based in Irvine, CA. Focused on estate planning, they have steered numerous clients toward a secure and smooth future with their estate planning services. Their robust understanding of the diverse needs and goals that come with various life stages and family dynamics fuel their ability to guide you through crafting a tailored estate plan to protect your assets and wishes. From families with special needs members to business owners and blended families, they have successfully assisted clients in achieving their unique estate planning objectives.

Ready to secure your legacy? Contact them today to schedule a consultation and to learn more.

Safeguarding Blended Families

Blended families can also make use of estate planning in particular ways to address their issues. Questions surrounding the fair and equitable distribution of assets to children from previous marriages or relationships so often arise and quickly become complicated. Proactively addressing these concerns can mitigate potential disputes and litigation among heirs.

And Beyond…

We can go on and on here with a whole new set of considerations for each unique subset of California’s demographics. For business owners, estate planning may involve adopting strategies for business succession, ensuring the smooth transition of business ownership or ensuring family members continue to benefit from the business’s income. People with potential creditor issues, liabilities, or anticipated legal judgments can employ estate planning strategies to shield their assets from potential risks associated with these issues.

Regardless of your circumstances, we suggest avoiding probate, a time-consuming and potentially expensive legal process, as a baseline goal. Establishing trusts, beneficiary designations, and joint ownership can help achieve this goal. It’s not fair to the loved ones you’ll leave behind to cause them to face probate when they should instead be mourning your loss and healing.

The Importance Of Estate Planning

If avoiding probate is indeed your goal, then you’d be right at home at our firm. This is more or less the reason that approximately 95% of our clients seek out our estate planning services. While there are various strategies to achieve this goal, the core objective remains consistent: to ensure a seamless transfer of assets to heirs and beneficiaries after one’s passing.

Passing away in California without a proper estate plan, including a will or trust, with assets that exceed the probate limit, your estate will likely be subjected to the probate process. Without having an estate plan in place, you’re in essence setting your family up for failure as probate can be considerably costly, with fees often amounting to a significant percentage of the estate’s total value.

Proceedings can also be lengthy, causing delays in asset distribution to beneficiaries, who cannot receive any of the assets they’ve been designated to receive until the probate case concludes. Probate is also quite a public process, meaning details of your estate, including asset values and beneficiary information, become part of the public record.

Without clear directives in an estate plan, there will likely be confusion and disagreements among your family members regarding asset distribution and the deceased’s wishes. Further, state laws and rules may dictate asset distribution, which may diverge significantly from what you actually intended.

Avoiding this requires careful consideration and strategic planning, particularly when it comes to real property like homes or land. One strategy we like is to retitle these types of assets into a living trust. Doing so can help bypass the probate process entirely, which means your loved ones will enjoy a smoother and more efficient transfer of assets.

That’s not to say there aren’t other alternative options. There are. Take, for example, pay-on-death deeds or transfer-on-death deeds. In certain situations, they can be incredibly convenient, but by and large, we find them ripe for error if not executed correctly. Additionally, if your named beneficiary predeceases you, it can result in a failed transaction or gift, complicating things quite a bit.

In our experience, retitling assets into a trust when appropriate can be among the most effective and reliable methods to avoid probate and ensure your goals are carried out as you wish. We will discuss probate in more detail later, but for now, just make a mental note.

Getting Started

It’s almost never too late to address your estate planning concerns. That is, it’s never too late to start estate planning until life takes an unexpected turn. Without proper estate planning documents, such as a power of attorney and a healthcare directive, you risk ending up in court under a conservatorship in the event that you become ill or incapacitated.

Why is this a problem? A conservatorship is highly restrictive, essentially suspending some of your rights and transferring decision-making power to another person. These documents serve as preventive measures against conservatorship.

It’s always best to designate someone to make decisions for you through these documents early on, to avoid court involvement and preserve your autonomy. We always tell our clients, the next best day is today. Instead of dwelling on past procrastination, if that’s something you’ve done, focus on today or tomorrow as an opportunity to get things done. As long as you still have the capacity and need, it’s not too late.

That said, it’s never too early to start planning your estate, either. You could argue that estate planning might not quite be relevant to your situation until you have enough assets to reach the probate limit. However, at a minimum, we always recommend having a will, a power of attorney, and a medical directive in place, just in case. If your assets approach or exceed the probate limit, or if you have children, it’s a good idea to consider establishing a trust, too.

For more information on The Ultimate Goal Of Proper Estate Planning, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (949) 993-0639 today.