If you’ve put off estate planning for quite a while, you’re not alone. Most people find it hard to come to terms with their own mortality, and a lot of those individuals feel like they don’t need a complicated estate plan. But foregoing estate planning altogether is a dangerous move. After all, doing so leaves the distribution of your assets in the hands of the State, which has a very specific way in which it will hand out your assets. That may or may not line up with what you hoped would happen with your estate and your loved ones in both the short and long-term.
California’s intestacy laws
First, let’s take a look at exactly how your assets would be passed down if you choose not to have an estate plan, often referred to as intestate succession. Under California law, if you’re married and have children, then your spouse will inherit all of your community property and then half of your individual property if you only have one child or a third of your individual property if you have multiple children. Your children will then inherit the rest of your individual property. That might not sound so bad, but things can get quite complicated.
Estate planning and blended families
Let’s take a blended family as an example. If you don’t have a will, trust, or other estate planning vehicle in place, then your community assets will pass to your spouse and your children will receive a portion of your individual property, with your spouse inheriting the rest. From there, though, your spouse and your children are free to do with those assets as they please. The bulk of your estate, your community property, may be left with a spouse who has no intention of leaving any of it to your biological children when the time comes. Additionally, intestate succession in this circumstance leaves nothing for step-children who you may have treated as your own.
Family dynamics can complicate things
There are a lot of family dynamics that are so natural to you that you might not realize the implications that they can have on estate distribution. Having a deceased child who has children of their own can affect how your assets are distributed, and so, too, can having surviving parents depending on the structure of your family.
Also, intestate succession doesn’t take into account the personal characteristics of who will inherit your assets. You might have a child who struggles with money management. While you’d like for them to be careful with how they use their inheritance so that it isn’t squandered away, the State doesn’t care about that. This can put the longevity of your estate in danger.
How taking control of estate planning can help
By being proactive in estate planning, though, you can dictate not only who will receive your assets, but also how and when they will receive them. Incentive trusts, for example, can motivate loved ones to achieve milestones, upon which assets will be distributed to them. This might include graduating college, maintaining employment for a set period of time, or even successfully completing a substance abuse treatment program.
By creating a holistic estate plan with long-term vision, you can also control your assets for some time after you’re gone. For example, you might want to leave a certain amount of money to your spouse via trust, with the remainder of that trust passing to your biological children upon your spouse’s passing. This ensures that you’re hard earned assets don’t end up with children that aren’t yours and that your biological children enjoy those same assets when the time comes.
A custom-tailored approach to suit your needs
It’s important to remember that the estate planning process is highly individualized so that you can ensure that your assets are passed down in accordance with your wishes. When you have that kind of power, why risk leaving your estate and the future financial stability of your loved one’s in the hands of the State? If you’d like to discuss your estate planning options further, then consider reaching out to an estate planning attorney who will know how to guide you through the process.