Regardless of your age and financial situation, it pays to think about your estate plan. Who is going to deal with your financial affairs once you’re gone from this earth? Although it can be difficult to consider your mortality, it can put a lot of stress on your loved ones and heirs if you don’t do your part. Learn more about trusts, wills and other documents that can be part of your estate planning.
What Is a Trust?
A trust is a legal vessel that places your assets under the management of a third party, AKA a trustee. The trustee administers the assets and the income from those assets per your wishes. A trust goes into effect as soon as it is created. While you are living, you receive the income from the trust. Upon your death, the trust passes to your beneficiaries. You name who, how and when the income is distributed.
Do You Need a Will If You Have a Trust?
A trust only manages the assets of the trust. A will goes beyond the trust. In your will, you can name a guardian for your minor children, outline your funeral wishes and distribute any assets not in the trust. A will only goes into effect on your death. It has no bearing on your life before your death. Typically, even if you have a trust, you should still have a will.
What Other Documents Should Be Part of Your Estate Plan?
An estate plan manages your assets if anything happens to you. Although most people think an estate plan is for death, it can also provide legal protections if you become disabled or unable to manage your affairs. A health care power of attorney and living will dictate your orders if you become incapacitated. A financial power of attorney gives someone access to your money to pay bills when you can’t. A power of attorney ceases on your death, which means you still need a will.
Why Should You Take Care of Your Estate?
A will can help your family get through the legal process quicker. A trust can help your beneficiaries avoid probate and maybe not pay as many taxes on your death. A health and financial power of attorney protect your assets when you can’t manage your money. These legal documents give you peace of mind and help your family when they are already under stress.
Discuss your estate planning needs with an estate lawyer in Sacramento.
Thanks to Yee Law Group for their insight into estate planning and items that should be included.