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What are benefits to estate planning?

On Behalf of | Feb 22, 2021 | Blog, Estate Planning

Individuals with significant assets, including multiple properties and vast brokerage accounts, may see estate planning’s value. Others might not, which is unfortunate. Estate planning could be for everyone in California since writing a will or drawing up other documents may make things easier for heirs, beneficiaries and relatives. Even people with minimal assets might explore the many different ways that estate planning helps.

Estate planning could serve several functions

A person with considerable wealth might worry if surviving relatives possess the capabilities to manage inherited funds. Perhaps the testator could request that assets end up liquidated and placed in a trust, with beneficiaries receiving distributions each year. Doing so may alleviate some concerns about heirs squandering money.

A person with limited assets may own a car, have a 401(k) and some debts. A will could name an executor to handle the debt payments and distribute remaining assets to a relative. Drawing up a will could add clarity after the person passes away and avoid leaving things to intestate rules.

Additional aspects of estate planning

Estate planning involves matters beyond wills and asset distribution after death. Anyone could suffer a catastrophic accident or illness. A living will establishes someone’s wishes if incapacitated or unable to communicate. A health care proxy would redirect those decisions to another person.

Illness, age, lack of experience and other reasons could leave someone uncomfortable with handling his/her financial matters or personal business. A young adult might choose to give a parent power of attorney and allow the parent to act as an attorney-in-fact. The parent could make decisions about individual retirement account investments for the young person, among other things. Maybe the parent could handle bill-paying duties, too.

Estate planning could also require changes at various points. Maybe revoking power of attorney seems advisable when concerns about decisions arise. Increases or decreases in assets may lead to rethinking a will’s chronicled distributions.

Creating an estate plan often requires careful thought and deliberation. Speaking about estate planning with an attorney could lead many to understand the benefits. Soon after, action may occur to devise legal documents for the plan.

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