Demystifying Estate Planning

Common Misconceptions In Estate Planning

Estate planning is wrought with misinformation and misconceptions. Over our time working in this area of the law, we’ve observed some common themes. Steer clear of falling into the trap of believing them — it won’t do you any good!

A Will Alone Is Sufficient

The extent of many people’s understanding of estate planning in California is something along the lines of, As long as I have a will in place, I will be fine. Yet, generally speaking, only having a will is not sufficient to protect and guide your assets as you truly want them to be. This is especially true if you have property.

The current probate limit in California is $184,500. This means that if the gross value of your estate assets (excluding those in a trust or with beneficiary designations) exceeds this limit, your estate will be subject to probate, which will cost you or your loved ones considerable amounts of time and money to complete.

Set It And Forget It

Like so many other things in our lives, many people think they can create an estate plan once and not really be worried by anything beyond that. Think of estate plans, in some ways, as living and breathing documents. Mirroring the changes in your life, be it personal, familial, financial, or circumstantial, you will need to revisit it on some sort of regular basis. Consider reviewing your estate plan every three to five years or after significant life events, such as:

• Marriage or divorce;
• Birth of a child or death of a family member;
• Estrangement from a family member;
• Relocating to another state;
• Promotions or significant income changes.

Most attorneys will create an estate plan for you. When you review it, you may make an amendment or a restatement of your trust. If you’re like most people, it’s likely you have an estate plan that has several amendments that have been restated or changed during your lifetime. There’s nothing wrong with this at all.

Others have a very simple, standard, and traditional life that doesn’t change over the years. This, too, is perfectly fine. But even in these situations, we recommend still taking the time to periodically review things to ensure you don’t necessarily need to change anything. Everyone is different, and those differences have clear implications for estate planning.

I Can Keep Procrastinating

Many realize the importance of estate planning, but for one reason or another, they put it off year after year. Remember, other than yesterday, the best time to act is now.

The concerns and potential complexities that have made you realize the need to create an estate plan won’t vanish just because you want them to. Failing to prioritize estate planning only means these issues will continue to persist just the same. The only difference is that your estate will remain unprotected when the time comes.

We understand that tackling estate planning matters begs you to confront your own mortality and that this isn’t the most pleasant thing to have to experience. This drives us to make the process as painless as we possibly can. We aim to provide clear explanations and make the process as smooth and stress-free as possible as a way to make procrastinating less likely for the most number of people.

Estate Planning Is For The Rich Or Old

Historically, there’s been a misconception that there’s an unspoken rule when it comes to estate planning: that it’s really only for the rich. We have plenty of experiences that encourage us to think this is changing.

Younger generations are increasingly showing interest in taking proactive steps to secure their futures insofar as they can. We suspect many of them have witnessed their parents or grandparents grapple with the complexities and pitfalls of probate due to inadequate estate planning firsthand and want to avoid it at whatever cost.

Attorneys Taylor and Sophia Preston are seasoned estate planning lawyers based in Irvine, CA, who have helped countless clients just like you navigate the intricacies of estate planning law. With a deep understanding of the common misconceptions surrounding estate planning learned over the years of interacting with clients, they are prepared to assist you in crafting a comprehensive plan tailored to your unique needs and circumstances. Don't fall prey to myths that can jeopardize your assets and wishes.

Ready to debunk the myths and secure your legacy? Contact them today to schedule a consultation.

While younger clients typically experience more life events that require updates to their estate plans, such as changes in income, acquiring new assets, getting married, having children, or experiencing other significant life milestones, they are in a better position with regard to being protected against probate. If you are young, we encourage you to put aside the belief you may have that estate planning is only for the old or the rich and consider getting started today.

Estate Planning Only Matters When You Die

Many people believe estate planning only really kicks in when someone dies, but this is the furthest thing from the truth. In fact, many of the tools available to people who seek out estate planning, such as trusts, provide invaluable protections and benefits while they’re still alive.

Trust Planning

Establishing an irrevocable trust can provide you with substantial protection against creditors and potential lawsuits. When you transfer assets into an irrevocable trust, you remove them from your personal ownership. This makes them inaccessible to creditors while allowing you to retain some control over the assets’ management and distribution.

Asset protection trusts are specifically designed to safeguard assets from potential future creditors. Placing assets in an asset protection trust enables you to protect them from claims made against you personally.

LLC Creation

Many of our clients like the idea of setting up a Limited Liability Companies (LLCs), and for some, doing so is a perfectly reasonable decision to make, offering considerable liability protection. It separates personal assets from business or investment assets, shielding personal wealth from potential lawsuits related to the business or investment.

Incapacity Planning

Should you ever be in the unfortunate position of being incapacitated, having several key documents in place that are a vital part of a robust estate plan will enable you to fare much better than not.

For instance, a power of attorney grants someone else the legal authority to act on your behalf in financial or legal matters should you become incapacitated. This ensures that your affairs continue to be managed without interruption, even if you’re unable to handle them yourself.

Advanced medical directives, which can include a living will and a healthcare proxy or medical power of attorney, outline your wishes regarding medical treatment and appoint someone to make healthcare decisions on your behalf if you’re unable to make or communicate decisions for yourself.

There are also conservatorship and guardian nominations. Having them set up means you can designate who will make personal and financial decisions for you should you ever become incapacitated.

Estate planning is for everyone and encompasses various tools and strategies designed to protect and benefit you during your lifetime and beyond, ensuring your wishes are honored and your interests safeguarded. Given the uncertainties of life, it’s essential to initiate estate planning as early as possible to secure your and your loved ones’ present and future well-being.

For more information on Understanding Estate Planning In California, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (949) 993-0639 today.