Finding The Right Estate Planning Tools For Your Situation
The estate planning process can be confusing without the help of an experienced attorney, and choosing which documents should comprise your plan can be near impossible without guidance. At SW Smyth LLP, we understand the importance of making informed decisions during this process, so we take care to explain your legal options in full before letting you commit to anything.
Why You Should Consider Drafting A Will
A will can be a crucial element of any estate plan, regardless of the composition of the estate. Many clients entering their first foray into estate planning already understand that a will allows one to distribute property among designated beneficiaries, but a will can also serve other purposes.
For families with minor children, a will can specify which family members or family friends should assume legal guardianship of the children. Without this information, the state may designate a guardian for your children, placing your children’s upbringing in hands unapproved by you.
If you should die without a proper will in place, your estate enters intestate succession. Intestate succession divides your estate equally between your living family members according to state law, which may not match your goals or wishes, as well as causing unplanned tax consequences. Creating a will ensure you maintain control over which family members receive property and in what proportion.
Why You Should Consider Creating A Trust
Wills, as helpful and necessary as they may be, are required to go through probate in California. This process can be lengthy and prevent your beneficiaries from accessing their property for months. To avoid this, many Californians opt to put much of their property into a trust to ensure a smooth transition of property from a decedent to a beneficiary. Trusts transfer ownership of property and assets to the trust, which is managed by a trustee, who becomes responsible for distributing those assets according to the terms of the trust.
Trusts are very flexible and can be carefully structured with the goal of minimizing estate taxes, as well as protecting the beneficiaries and preventing distortions to their income.
Families with children who have special needs may need to consider the effects of inheritance on their children’s government benefits. By keeping the property and its distribution in the hands of a trustee and not the child, a special needs trust can preserve the child’s eligibility for benefits, as well as helping to provide for the child’s needs far into the future.
Since the property placed in a trust is not held by its grantor, these assets are protected from property division related to divorce. This can be an especially helpful tool for owners of small businesses who want to ensure the control of their business remains in the family.