A Graceful Exit

No one wants to be a burden to their family. With proper planning, individuals and families can prepare themselves for life’s changes, including death and incapacity. With just a little bit of organization, you can express your care wishes, distribute your assets to the people and causes you care about, provide for minor children, and prepare for a graceful exit. I have teamed up on this blog with local trust and estate attorney, Grey R. Lund, to outline things you should be thinking about to ensure that you are prepared for the next stage of life.

Why Estate Planning?

The goal of estate planning is to ensure that an individual’s assets are distributed in accordance with their wishes and to minimize taxes and other costs that may be associated with transferring ownership of those assets. Additionally, estate planning involves creating a plan for personal and healthcare decision-making in the event of incapacity. A proper estate plan can reduce the stress on loved ones and reduce the likelihood of disputes. 

What is a Trust?

Trusts can be used for a variety of purposes, such as avoiding probate, creating an orderly distribution of assets, and providing planning for incapacity care needs. Additionally, some trust structures can help to minimize the impact of estate and gift taxes. 

A trust-based estate plan tends to be the most cost-effective and efficient estate planning strategy in California. This is in part due to a trust’s ability to avoid probate, which is the court-supervised process for administering a decedent’s estate and final affairs. There is nothing inherently wrong with probate, but it is a public proceeding that is often costly and time-consuming. Luckily, probate is usually avoidable for those that plan ahead. 

A trust is a legal arrangement in which a person (the grantor) transfers ownership of their assets to another person or entity (the trustee) to hold and manage for the benefit of a third party (the beneficiary). In many cases, the grantor (i.e., the person establishing the trust) is the same person as the trustee (i.e., the person managing the trust), and is also the beneficiary (the person who enjoys the benefit of the trust).

Creating A Will

Although a will is part of a comprehensive estate plan, it will not avoid probate like a trust. A will is a legal document that outlines an individual’s wishes for the distribution of their assets after their death. A will controls the disposition of the assets in an individual’s probate estate. 

A will can also nominate a guardian for minor children. 

Designating Beneficiaries

Many assets, such as life insurance policies and retirement accounts, have designated beneficiaries listed directly on the account, detailing who will receive the assets upon the owner’s death. 

The beneficiaries may vary per account, and a trust will not supersede the beneficiaries listed directly on these types of accounts

Powers Of Attorney

A power of attorney is a legal document that gives another person the authority to make decisions on an individual’s behalf if they are unable to do so themselves. 

There are different types of powers of attorney, including medical powers of attorney (often called “Advance Healthcare Directives”), which give someone the authority to make medical decisions, and financial powers of attorney, which give someone the authority to manage an individual’s financial affairs.

Some powers of attorney are effective immediately and some have restrictions before they are operative (e.g. needing a doctor’s evaluation and a doctor’s note stating the person’s capacity)

Estate Tax Planning

Depending on the value of an individual’s assets, an individual’s estate may be subject to estate taxes upon their death. 

Estate tax planning involves strategies to minimize or avoid these taxes, such as making gifts during an individual’s lifetime or setting up trusts specifically designed to maximize estate tax savings.

What Does It All Come Down To?

Estate planning is an important process that can help ensure that an individual’s affairs are in order in the event of incapacity, that their assets are distributed in accordance with their wishes upon their death, and also that the costs and complications associated with transferring ownership are minimized. 

It is important to work with an experienced estate planning attorney to develop a plan that is tailored to an individual’s specific needs and goals. Here at WealthGuard Advisors, we pride ourselves on our ability to work alongside your estate planning attorney and other professional advisors to ensure that your financial plan is consistent with your estate planning strategy. 

Contact us if you would like any financial help.

About The Contributors:

Grey R. Lund is a local trust and estates attorney with the Buchalter law firm. Although his office is in Sacramento, he lives in El Dorado County and often meets with clients closer to home so that they can avoid the trip downtown. His practice is specific to all trust and estate-related matters, including estate planning, post-death and post-incapacity trust administration, and trust and estate litigation. He is licensed here in California as well as in Utah. Grey can be reached via email at [email protected], or on his website buchalter.com.

This material is for informational purposes, and is not intended to constitute solicitation or legal advice and that no attorney-client relationship exists between Grey R. Lund, the publisher of the information, and any recipient. 


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