Many people believe that estate planning is only for the wealthy who have substantial assets. Unfortunately, this misconception could cause the fruits of your life’s work to fall into the wrong hands.
These are four reasons why you need to create a formal estate plan.
Your young children
An estate plan is essential if you are a parent of minor children. Under California law, the state steps in to determine children’s guardianship when both parents are unavailable. A will allows you to name guardians and reflects your wishes about various aspects of your children’s upbringing.
Your close relationships
If you die intestate or without a will, California law dictates that your current spouse receives all community property from your marriage. This scenario may cause your step-children or other relatives to experience hurt feelings and anger. However, you can override the law by creating a will naming specific people as your beneficiaries, regardless of their relationship with you.
Your assets’ hidden value
Your family members may not want to inherit your property, but that should not stop you from distributing it in a will. For example, your close friends may not use your car or house but can sell them to pay for something they urgently need.
Your concern about legal action
Legal judgments and aggressive creditors may threaten to eat away at an inheritance you leave a loved one. However, you can plan for such eventualities by creating a third-party asset protection trust that owns the assets for your heir’s benefit while shielding them from legal action.
Whether you opt for a simple will or an elaborate estate plan, it is never too soon to plan for your loved ones’ future.