It’s a fact, plans change over time as life situations change. So when is the best time to prepare an estate plan? A similar question is, when should you put on your seatbelt? Just before the accident, or when you get in the car? It doesn’t really matter if you’re driving a ten year old sedan or the just released Italian sports car, basic safety always applies.
Basic Safety: Incapacity Protection for Adults
Once you reach adulthood different laws apply – suddenly your parents have no legal decision making authority over you. Access to your health information is no longer a parental right. You should discuss with your parents about executing a Power of Attorney and Health Care Directive for your protection and your peace of mind, as well as theirs.
Adding Seats: Your Growing Family
In my experience being a parent is exciting and challenging. I have lots of aspirations for my children as they learn and grow. It’s important to me to make sure my wife and children are going to be well taken care of with a good insurance policy. If something were to happen to both my wife and I, we have named a guardian to take care of the children, and we’ve set up a trust so that the guardian has access and control of the funds.
Changes in your family can also require changes in your plan – maybe you have a blended family, and need to make sure “yours, mine, and ours” are properly taken care of.
Increased Protection: Avoiding Probate and Passing on Assets
Growing older usually means adding assets – a house, investments, retirement accounts, life insurance maybe a business venture. A trust is generally the best way of avoiding probate and passing on your assets to your chosen beneficiaries.
High end planning may be required depending on the size of your assets. The larger the assets, the greater possibility of tax exposure to estate taxes.
As health care concerns become increasingly important, discussions of how to limit the cost dominate the conversation. Medi-cal can be a huge help to someone in need of long term care, but it can also leave a large bill for the heirs to be paid out of the estate. Specifically designed trusts can protect your hard earned money and help preserve your resources for your care, and for your beneficiaries.
As you go through life with all its ups, downs, detours and sudden turns, I hope you take the time to properly fasten your seatbelt, and check the fit on a regular basis.
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