Everyone should write a will. There is no doubt about that. A will can clarify your end-of-life wishes on a wide variety of matters, not the least of which is how you want your assets handled after you die. An attorney can help you prepare a will to make it most effective. However, depending on your particular situation, a will alone may not be the best way of ensuring that your assets are protected and ultimately distributed according to your wishes.
In terms of time-cost and fee-cost, probate can be a headache for some families. One way of largely avoiding probate is to establish a trust. Unlike a will, a trust isn’t overseen by the probate court. If a trust is properly funded and properly addressed in the will, then the trust beneficiaries can avoid probate fees and tax burdens.
A trust is also what we call a “living document,” meaning it can provide you with funds during your lifetime.
Of course, preserving assets for yourself and your loved ones is important, but assets are only one aspect of a comprehensive plan. Health care decisions also have to be made. In particular, it is important to ask what will happen if you become incapacitated and thus unable to made decisions on your own.
In California, we have a document called an advance health care directive, which allows you to name someone to make medical decisions on your behalf. In this document, you can address a range of issues, including whether you do or do not want to undergo particular treatments.
All in all, this sort of estate planning becomes less about planning for the future and more about creating it.
Source: FOX Business, “The Biggest Estate Planning Mistakes You Can Make,” Kelly Trageser, April 7, 2014