Planning for the end of life is a morbid endeavor not many people want to deal with. However, neglecting to do so could mean devastating consequences for your family. If you pass away without an estate plan in California, intestacy succession laws will determine what happens to the assets you worked so hard for.
There’s a common misconception that estate plans are only for the rich. But the reality is every person has possessions that they can’t take with them when they die. If you wish to protect your legacy and ensure your loved ones get what they’re entitled to, creating an estate plan should be a top priority.
1. You can arrange for your own care
Estate plans are often associated with death, but many people aren’t aware that they can protect you and your assets while you’re alive, too. In the event that you face a health condition that renders you incapacitated or unable to make your own decisions, you can designate a power of attorney or healthcare proxy to make decisions on your behalf.
2. You can protect your young children
Estate planning isn’t just about deciding who gets what when you pass on. If you’re a parent to children under the age of 18, you must have an estate plan to ensure they receive the care you want for them. If both parents die and you fail to name a guardian for your children, the court will determine who will raise them.
3. You will have control over your assets
The primary factor of an estate plan is deciding which assets you want to pass onto your heirs – no matter how large or small. Should you pass away without one, your family and friends will be subject to a costly court process that could take years. What’s more, is it could lead to a great deal of discord between your loved ones if there are no clear terms on how you want things divided.
4. You can minimize transfer taxes
The Internal Revenue Service (IRS) places limits on who and how much money you can transfer without being taxed. A good estate plan will allow you to transfer your assets to your heirs while minimizing the estate taxes owed. Without an estate plan, your family could end up owing a substantial chunk of change to the government.
Estate planning is a grim chore, but it’s essential for upholding your legacy. Creating an estate plan today and keeping it up to date will ensure that the people you love are cared for after you’re gone.