It’s a fairly morbid and unpleasant thing to think about: what will happen to my stuff after I die? There are a lot of folks out there that feel like it can wait until tomorrow. But the truth is, the best time to draft a will is when you have children.
You may be wondering, won’t I just have to redraft the will every time a major life event happens? So why do I need a will right now? There’s some truth to that statement, but that’s no reason to put it off.
At Herbert Law Office, we can help you make sure that you protect yourself and for family. Below, we explain why making a will is the first step in doing that.
What Happens If I Don’t Have a Will?
If you don’t have a will or any estate plan, then your property is dispersed through a process known as intestate succession. Intestate succession is basically an algorithm that determines who gets first crack at your assets and how much they get.
For instance, if you have a living spouse, then the spouse will generally have the best claim with any living children you have coming second. When there’s no living spouse, then the children have the best claim. After that, it’s brothers, sisters, cousins and so on. If literally no one can be identified, then the property is held by the state in a process known as escheatment. If no heirs can be found after a certain amount of time, the property will be liquidated by the state.
Wills Are Just the Beginning of Estate Planning
For those with smaller estates and few assets to pass on, you probably won’t need much more than a will. If you have small children, you can identify someone to whom guardianship will pass if neither you or your spouse are alive to care for them. You can establish a durable power of attorney — someone who will be able to make medical and financial decisions should become incapacitated.
You can also draft succession plans for businesses you own or decide who gets what assets — but there is a catch. Any assets you do pass on will have to pass through probate. The first thing that the probate judge will do is to contact your creditors to settle your debts. The courts also take their fee.
How Living Trusts Can Help
Every estate plan has a will. Not every estate plan has a trust. Trusts are particularly effective for a number of reasons. Firstly, wills can lay out generally what your wishes are for certain kinds of property like your home and power of attorney and guardianship, but it can become a bit cumbersome to redraft the entire will each time you get a new valuable property. The process of amending a will (adding a codicil) is no less cumbersome.
Living trusts act, essentially, like containers for property. They can hold real estate, stocks, bonds, mutual funds, annuities, or literally anything else of value. Nowadays, they can even hold cryptocurrency. It’s much easier to add, remove, or transfer an asset in a trust than it is to redraft your will each time.
What Does a Comprehensive Estate Plan Look Like?
Nowadays, estate planning is not something you do once and then forget about. It’s something that is grown over years. A comprehensive estate plan doesn’t just include a will but goes far beyond it. Trusts can be set up for your heirs. If you have disabled loved ones in your family that will require care or won’t be able to work, you can set up special needs trusts that will help ensure that their care is seen to. You can also plan for your retirement, ensure that your spouse’s needs are met if you pass on suddenly, and ensure that your kids are taken care.
What Are the Advantages of Using Trusts This Way?
When you disburse your assets in a will, the court controls the entire process. You can name an executor, but the court oversees the process. The first thing that the court does is contact any open creditors that you have. Assets that you had set aside for your loved ones may never make it to them.
In addition, any property that passes through probate is a matter of public record. In other words, almost anyone can look that information up. Trusts are private and, because they’re private, they are not a matter of public record. If a creditor wants to make a claim on your estate, they can do so, but the trust is disbursed at the moment of your passing. If you only have a will, your assets will be tied up there. Creditors can sue the trust, but this is much more difficult to do and sometimes impractical. This allows you to settle with your creditors on your terms instead of them getting “first dibs” on your property.
Why Do I Need a Will Attorney?
The Palmdale CA will attorneys at Herbert Law Office can help you build your estate plan. By identifying your needs, goals, and family situation, we can ensure you lay a solid foundation for your spouse, children, and grandchildren. Contact us today.