There’s a common misconception that Orange County trust and estates lawyers have to battle on a regular basis. Many people simply assume that estate planning is something that only wealthy people need to do. They hear about “trust funds” and “estate taxes” and believe that these things only apply to the super-rich. Unfortunately, these folks often end up costing their heirs considerable time and money because they didn’t realize that these terms applied to them, too.
What Is An Estate?
The word “estate” itself can be a reason for the not-so-wealthy to skip out on estate planning. It often brings to mind mansions with grand rolling hills and perhaps a stock portfolio to help with the payroll of personal chefs and gardeners. In reality, however, the word “estate” refers to any assets that an individual owns. Some examples might include:
- Your home (even if it isn’t in the Hamptons)
- Insurance policies
- Retirement plans
- Bank accounts
- Personal belongings
When you see it listed out like that, it is clearer that nearly every one of us has what is legally considered an “estate.” It makes sense, then, that you would want to have a say in what becomes of those things once you pass away.
What the Estate Plan Does for You
Even with a small estate, the only way you can have a real say in what happens to your belongings is by creating a legally binding estate plan. Keep in mind, too, that an estate plan isn’t just for when you die; a comprehensive plan also directs how things will be handled should you become incapacitated temporarily or permanently. Your will and trust attorney in Newport Beach will help you to determine what kinds of medical decisions you would want made, for example, rather than only focusing on selecting beneficiaries for your accounts and jewelry.
If you have minor children, then the need for an estate plan can become even more pressing, as it affords you the opportunity to name your choice of guardians for your children. Without a legal guardianship set up in advance, the courts will use specific laws and precedence to determine where your children will live and with whom; and the court’s decision may be very different from what you would have chosen.
When you pass away without a solid estate plan, your entire estate—no matter how big or small—will pass through probate. As with choosing guardians, this court-established process is based entirely on legal precedent and not on your wishes. Someone will be chosen to distribute your estate according to whatever decisions are made by the court. Unfortunately, probate can be very time consuming and fairly expensive. That means that those with the smallest estates can stand to lose a larger percentage of what they would have otherwise been able to pass on to their loved ones.
A trusts and estates attorney in Newport Beach is your best approach for protecting what you have, whether it’s that sprawling mansion on the hill or just a few special pieces of jewelry that were passed down by your grandmother. To get started creating a plan that fully protects the things and people you love, give us a call at (949) 260-1400.