Tuesday, May 03, 2005

Do I Need More Than A Will?

Although this article discusses some of the factors that might be used to decide upon an estate plan in California, you should always consult a licensed attorney qualified in estate planning to discuss your specific needs and goals.

Do I need more than a will?

In reality, everybody should have a will even if they do not have property of much value. Besides naming the executor of your estate and specifying the distribution your assets, a will is also used to designate who will have custody of your minor children if you should pass away. But what other documents should you have in your estate plan?

A Living Trust

In most cases, anybody in California who owns real property or who has assets worth more than $100,000 should seriously consider having a revocable living trust to avoid probate. In addition to avoiding probate, a person who inherits real property through a living trust will receive better treatment for the purpose of capital gains tax than someone who inherits the property through joint tenancy.

A properly drafted trust can also help reduce your estate taxes. Estate taxes are imposed upon an estate which has a net value of $1.5 million or more. Under current law, that amount will increase to $2 million in 2006 through 2008. For estates which approach or exceed this value, significant estate taxes can be saved by proper estate planning, usually before death and, in the case of married couples, before the death of the first spouse. Estate planning for taxation purposes must take into account not only estate taxes, but also income, gift, property and generation-skipping taxes as well. Qualified legal advice about taxes should be obtained during the estate planning process.

Advance Health Care Directive

As recently shown in the Terri Schiavo matter, everybody should have an Advance Health Care Directive allows you to appoint someone to make your health care decisions when you cannot. Regardless of your personal views, these are issues that you should discuss with your family and put your wish in writing.

By having an Advance Health Care Directive, you take the power to make decisions for you away from the court system and put those decision in the hands of trusted friends or family members.

Durable Power of Attorney for Financial Matters

You should also have a power of attorney that allows your family to handle your financial matters when you cannot. Most people prefer to have a "springing" power of attorney that only goes into effect if you become mentally incapacitated. By having a complete estate plan, you can avoid an expensive, court-supervised conservatorship if you become mentally incompetent.

I strongly urge you to speak with a licensed professional who can provide you with sound advice on an estate plan that best suits your particular needs.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.

1 comment:

Angel said...

Terry should not have had to face such things. If only she had a living will or appointed a power of attorney over her medical wishes. It is my view that everyone should have these most important documents to ensure your widhes are carried out and not disputed.
No matter how old you are, these should be done immediatly.
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