All decedent estates are subject to probate
unless measures are put into place prior to death. For most, this involves
arranging a trust. However, other methods can be used such as securing joint
titles for realty and automobiles, or assigning beneficiaries to receive
proceeds in banking and investment accounts.
A key element of estate planning is preparing a will and
testament. Wills are needed for both probated estates and trusts. They
designate the person responsible for settling the estate; the beneficiaries
entitled to possessions; and establish legal guardians for children.
Probate estates are classified as testate (with a Will) and
intestate (without a Will). Intestate estates must be settled in accordance
with state probate rules, while testate estates are settled according to
directives written by decedents.
One affordable and effective way to bypass probate is to
transfer property into trusts. Generally speaking, trusts are relatively easy
to arrange. However, it's recommended to hire a lawyer to help with documents
and ensure everything is taken care of.
Living trusts are by far one of the most popular. This type
is easy to arrange and makes estate settlement much easier than probate. It's
an affordable option for nearly everyone and offers a bounty of benefits.
Arranging trusts isn't the only method to avoid probate.
Small estates might qualify for exemption of probate if they meet state
guidelines and a Will is presented to the court. The estate has to pass through
a confirmation period before assets can be transferred to heirs; however it is
much faster than probate.
Estate planning for probate estate and trusts primarily
consists of the same documents. People need to prepare a Will and power of
attorney documents. The Will states who receives assets held in the estate or
trusts.
Power of attorney forms are only in effect while you're
still living. They are needed to make certain your personal or business
responsibilities can be maintained even if you aren't able to do so.
For instance, a general power of attorney can be arranged to
let a relative handle your personal finances if you're involved in an accident.
A medical power of attorney lets a person become involved in medical decisions
if you are unconscious or incapable of making sound decisions.
Power of attorney is especially important for business
owners. It can let colleagues assume ownership duties in the event of
emergency. This type of POA is commonly used with business
succession planning to ensure business operations continue uninterrupted.
Generally speaking, a power of attorney should be created
for all tasks that involve financial or business transactions. These could
involve managing banking transactions; paying mortgage payments; overseeing
financial investments; or entering into business contracts.
Estate planning is important for everyone, but particularly California
residents. The Golden State
