If you are an adult, live in California and do not have an estate plan, you should create one even if you do not have many assets. There are several key elements you ought to include.
Roles in your estate plan
There are a few different things to consider based on your assets and personal situation. Some of the basic documents you’ll probably need include a will and powers of attorney or other documents that appoint someone to handle any medical and financial decision-making in the event of your incapacitation. Besides this, you’ll need to choose someone to be the executor of your estate. You can also name a guardian for your minor children.
To make sure they are current, you should review the beneficiaries on your retirement account and life insurance policy. It is not uncommon for people to forget to take an ex-spouse off these beneficiary designations, which can lead to costly court battles.
Taxes and other considerations
People who have more assets should consider how estate taxes might affect them. While the current federal estate tax exemption is high, it could drop again in a few years. One reason that you should review your estate plan regularly even if there are no significant alterations in your circumstances is because laws like this can change, necessitating a different strategy. Trusts and gifting are both estate planning strategies for managing when and how assets get distributed.
Talking to your loved ones about your estate plan can help reduce the likelihood that there might be a misunderstanding or conflict over it. You may also want to consider working with an attorney, which could help you avoid making errors in your estate planning documents.