Creating an estate plan helps ensure that your assets undergo distribution in line with your wishes after your death. Otherwise, the responsibility of figuring out what to do with your assets falls upon your home state.
In California, a basic estate plan includes several key components that provide clarity and protection for your loved ones.
A will is the foundation of any estate plan, and yet, almost half of all Americans over 55 do not have a will. A will outlines where your assets and property must go upon your death. You may also use it to designate a guardian for any children you have who are under 18.
A trust is an effective tool for managing and distributing assets while avoiding the probate process, which is often time-consuming and costly. A revocable living trust allows you to specify how you want someone to manage your assets during your lifetime. It also lets you specify how you want your trustee to distribute them upon your passing.
An advance health care directive
An advance healthcare directive allows you to appoint a trusted individual to make medical decisions on your behalf if you become unable to do so. It also provides instructions regarding your medical care and end-of-life decisions, ensuring your loved ones and medical team respect your wishes.
A financial power of attorney
This document designates someone to manage your financial affairs in case you become incapacitated. This person can handle tasks such as paying bills, managing investments and making financial decisions on your behalf.
These elements work together to provide a clear roadmap for the distribution of your assets. Keep in mind that estate planning is an ongoing process and that you may need to update your plan periodically to make sure it reflects your current wishes and financial situation.