Every estate plan consists of a variety of documents that perform different functions, such as:
A will, sometimes referred to as a testament, is often the main focus of an estate plan. This is because a will is able to lay out someone’s personal and final wishes while also creating guidelines for how their assets should be divided. There are multiple different kinds of wills an individual can choose from, depending on what they think is best for their unique circumstances. All of them lay out personal intentions for what an individual wishes to happen to their assets, properties, bank accounts, etc. When you pass, your will is the most important document for your loved ones and your attorney so they can begin the probate process and follow your wishes.
Durable Power of Attorney
Assigning durable power of attorney is a crucial detail of any estate plan because it deals with issues while you are still living. By granting someone durable power of attorney, they have the right to make any non-medical-related decisions on your behalf if you’re not able to. This document serves as an agreement that you allow the person designated to make decisions if you become incapacitated or disabled in any way.
A trust is a document that requires three different parties: a grantor, a trustee, and a beneficiary. The grantor can create a trust and determine which of their assets go into it. From there, they appoint a trustee who is in charge of managing the trust and the assets inside. The grantor also assigns a beneficiary, who is the person that will take ownership of and benefit from the assets that were put into the trust.
Medical Power of Attorney
A medical power of attorney is another essential detail in your estate plan that applies to matters while you are still living. By setting up a medical power of attorney, you grant the right to another person to make important medical decisions on your behalf if you’re incapacitated. If you have specific wishes about the medical care you may receive, your medical power of attorney can express your needs on your behalf and ensure that you receive the care you would want.
Personal Letter of Intent
A personal letter of intent is a formal document that outlines any other wishes and personal intentions an individual may have but didn’t detail in any of the other documents. This document varies greatly from person to person, with some people just writing heartfelt letters to their families and others outlining specific things they wish to be done when they pass. Adding a personal letter of intent to your estate plan ensures that all your wishes are seen, heard, and respected.
A will is one of the most influential parts of an estate plan because it specifically outlines the requests of an individual once they pass. A person’s will can detail how they want their assets divided and who those assets are going to, as well as emphasizing any other personal wishes they might have. Without a will or legal documentation of your final wishes, the division of your assets, along with the rest of the probate process, will be taken over by the state. If this happens, your assets most likely won’t be divided how you intended, and the state will instead follow the legal process that Corona, California has in place. This may also cause the transferring of your assets to your loved ones to be taxed more heavily than if you had a will in place. A will is the most personal way you can plan for your future while still addressing all the legalities required.
Crafting a will can be complicated, especially if you don’t know where to start. When working with an experienced wills lawyer, you’ll most likely follow these steps when creating a simple will:
- Asses What You Want to Include
Before creating a will, the first thing you need to do is consider all the different assets you’ll want to include. Properties, cars, bank accounts, retirement funds, art, furniture, jewelry, and more, can all be included in a will if you have specific wishes for how you want them to be divided. Most likely, you’ll also have to gather details on the monetary values of your different assets.
- Provide Specific Details for Division of Assets>
Once you have an idea of everything you want to include in your will, you’ll then begin to craft it. For each asset you list, you should provide details such as what the asset is, its monetary value, and the beneficiary that you would like to receive it. When drafting your will, make sure you are as specific as possible and provide in-depth details on how you would like your assets handled. This way, when your will is read by your attorney and the probate process begins, your wishes can be fulfilled as closely as possible.
- List Your Beneficiaries
Every will has a different number of beneficiaries. Some people have multiple beneficiaries because they have large families, and others sometimes just simply list one beneficiary to handle everything. Once you’ve detailed the different assets you’d like to pass down in your will, you’ll then need to make sure you list your chosen beneficiaries for each asset. For financial assets, you’ll need to include the names of the beneficiaries as well as the percentage of the asset you’re passing onto them.
- Assign an Executor of an Estate
The executor of your estate is the individual you choose to read your will and final testaments to your loved ones, which is most often your wills or estate planning lawyer. When choosing an executor, it’s important to find someone impartial to the situation who can be trusted to handle everything properly and not be persuaded by any loved ones trying to change your requests.
- Designate Guardianship of Children (If Applicable)
Many people decide to create a will once they have children in case something were to happen to them. If applicable, one important detail of your will is assigning guardianship of your children who are under the age of 18 to an adult you trust. This way, you can find peace of mind knowing that if you were to become incapacitated or pass away, your children would be taken care of by someone that you trust.
- Have Your Will Witnessed and Notarized
After your will has been drafted, you must sign and date it. In the state of California, the creator of the will, along with two impartial witnesses, must sign the will in order for it to be legally valid at the time of the creator’s passing. Though your will does not have to be notarized in California, many people have it done to ensure their will doesn’t have any legal issues in the future.
When crafting an estate plan, many people are unsure of whether they should create a will or trust. A will is a legal document that is created while the client is still living and is only put into action when the creator passes away. It outlines how the creator wants assets to be divided, lists their beneficiaries, and can also provide the ability for an executor to create a trust if they see fit.
A trust, however, is a legal document that is more focused on transferring ownership of assets. They also outline how the creator wishes for assets to be divided and their beneficiaries, but a trust often includes specific guidelines on how these assets must be handled. For example, many people use a trust to transfer ownership of a business from one person to the next. In that trust, there are guidelines that must be upheld for the trustee to acquire and keep the business. Trusts also differ from wills in that they can become effective while the creator is still living.