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Sunday, May 17, 2015

Three California Estate Planning Myths: True or False

Three California Estate Planning Myths: True or False

San Diego estate planning lawyers eat, sleep, and breathe estate planning. They see pretty much every kind of situation unfold.  The families of individuals who have taken the time to create solid estate plans nearly always fare better than those who do not.  Still, there is an amazing amount of misinformation, misconceptions and out and out myths floating around out there that stop people from taking action to protect their futures and families with an estate planning lawyer’s assistance.

Education is the key.  I feel it is incredibly important that San Diego Attorneys, Tax Professionals and Financial Advisors tackle these myths head-on and debunk those that aren’t true.

T or F:  Estate plans are just for those with lots of assets.

The answer is false.  So many people end up unknowingly damaging their estates and hurting their families because they just don’t think they have “enough stuff” to justify an estate plan.  This myth absolutely needs to be debunked!  Estate Planning is about control, both during your lifetime and after you are gone.  If you care about what medical decisions may be made for you if you are unable to make your own decisions – you need to make estate planning decisions. If you own anything and want to direct what those assets can be used if and while you are incapacitated, you need estate planning. If you care about getting as much of your property as possible to your chosen heirs, you need estate planning.

If you fail to plan and die owning anything, there will be a legal process in order to determine what to do with it after you die.  It doesn’t take a lot of assets to force a family to endure the probate process.  In California, not only is the Probate process long and drawn out, but it also costs money!  That money comes from the estate itself, meaning that those precious few assets you wanted to pass on could actually end up being sold in order to pay for probate and taxes.  Fortunately, working with an estate planning lawyer ahead of time allows you the opportunity to put in place structures which protect your assets and circumvent probate using whatever tools are appropriate for your situation.

T or F:  You don’t need an estate plan as long as your family knows your wishes.

The answer is false.  There are a couple of problems that San Diego estate planning lawyers encounter with this line of thinking.  First, and probably most importantly, is that just because you and/or your family wants things to happen in a certain way, there’s no guarantee they will.  Without estate planning work, the California legislature’s wishes will be followed.  Your family may not be allowed to follow your wishes and may not be able to follow their own wishes.  Instead, your loved ones will be forced to follow the laws of the state of California—even if these go completely against what you wanted.  Second, and perhaps more importantly. everyone experiences grief differently.  After a death, small token items with emotional connections can become much more important.  Things become a substitute for the love they claim.   The probate process hits the grief sticken hard.  It encourages family members to resolve questions by legal challenges.  Within the probate process you cannot count on your child properly remembering your true preferences and instead not remembering different wishes which can lead them to find ways to subvert them for their own gain.  The best way to avoid both of these kinds of drama is to work with a San Diego estate planning lawyer who knows how to ensure that things go the way you want as a matter of law.

T or F:  Trust funds are for more than passing on money.

The answer is true.  While we may have certain ideas about trust funds as a result of watching too many movies, a whole lot of people aren’t clear on what they can really do.  For example, your San Diego estate planning lawyer can help you set up a trust in order to limit the taxes your estate (and heirs) will have to pay later.  Trusts also provide you with a big say in how your heirs are able to use or lose the inheritance you are leaving behind.  On the one hand, do you want them to have free rein, to pay for  their own or their children’s education, to use going on vacation or fixing their car? On the other hand. do you want your life’s savings to be at risk if they divorce or have their own financial troubles? These are just some of Client’s wishes that trusts are used to handle.

When we look back at our lives, it easy to see that even a small amount of money, useable for the right thing at the right time could have made a big difference. Even if you don’t have a ton of assets, a skilled San Diego estate planning lawyer can help you create a roadmap that will be followed by both the courts and those you’ve left behind.  From avoiding probate and un-necessary taxes to preventing family fights and ensuring that your grandkids go to college, working with an estate planning lawyer in San Diego is the first step in protecting what you hold dear.


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