What Estate Planning Documents Do I Need?

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Posted in : Blog, General, Wills, Trusts, and Estate Planning on 2/21/2021 by Christine Padilla, Attorney

What Estate Planning Documents Do I Need?

Estate Planning Documents Everyone Should Consider:

There are some who are under the misconception that estate planning is only for the “rich.” In reality, estate planning is for anyone who cares about the distribution of their assets (whether big or small), and in reducing undue confusion and stress for their loved ones and family during an already difficult time. Estate planning is the process of creating a plan in advance for what happens to your estate, or everything you legally own, in the event you become ill or die. The following are basic estate planning documents everyone should consider.

  1. Preparation of a Will or a Trust: Either of these documents allow a person to set forth a distribution plan for their assets, providing direction as to who will receive your assets in the future. A Will is generally more simple to prepare than a Trust. However, while a Will allows one to provide direction as to how one would like their assets distributed, the distribution of one’s assets may still be subject to a court supervised process known as Probate. A Trust is an estate planning document that is typically more detailed than a Will, and the cost is slightly higher to prepare. If prepared properly, however, a Trust can provide significant cost savings by allowing one’s assets to bypass Probate and potential estate taxes.
  2. Up to Date Beneficiary Designation Forms: Many assets, such as IRA’s, 401Ks, annuities, and life insurance policies will provide benefits upon your passing in accordance with beneficiary designation forms. It is imperative that the beneficiaries you have named are up to date, and that you have named alternative beneficiaries on these accounts as well. In addition, it is vital that you have designated the same beneficiaries on your beneficiary designation forms as those you have named in your Will or Trust for these accounts. In the event of a conflict between the language of the beneficiary designation form and a Will or Trust, the beneficiary designation form will likely prevail.
  3. Durable Power of Attorney: The Power of Attorney document is an extremely powerful document, authorizing another to act on your behalf for business, legal, and financial purposes. The powers granted within this document may be sweeping, or limited as desired. It may be enacted immediately upon signature (as is often the cases with spouses), or may not go into effect until one is incapacitated or incompetent. The “durable” nature of this document permits another to continue to act in your place while you are unable to act on your own. The powers granted within a Durable Power of Attorney end upon one’s passing.

In addition to these common estate planning documents referenced above, your estate planning attorney will often discuss and include a California Advance Health Care Directive and Nomination of Guardian for Minor Children in your planning. If you would like to discuss what documents you need for your personalized California estate plan, we welcome you to contact the Law Office of Christine Padilla at our San Diego Location

Christine Padilla

Owner and Attorney at Law