Let's face it. Estate planning is rarely a favorite topic of discussion. It deals with death and money, and most people would rather wait until later. This attitude leads to some common misconceptions and myths when it comes to planning for the future, including after you pass away.
Typical life expectancy is growing. According to the Social Security Administration, if you are a 65 year old man today, you can expect to live until the age of 84.3. Today's 65 year old woman can hope to see 86.6 years. These are averages. About 25 percent of you will live past 90, and ten percent past 95. With Americans living much longer, estate planning is taking on a new and more important role in the lives of our aging population. The growing need for financial support over a longer time frame, requires careful and more innovative financial planning. Today's estate plan must embrace this need.
More and more people are choosing to have a committed relationship without getting married. While this is a personal choice that must be respected, it is also one that requires at least a look at the legal ramifications of being unmarried.
Trusts separate income from principal, allowing the trust instructions to distinguish between the two. This means that the trustor can instruct the fiduciary to distribute all income from the trust to a specific person and only distribute principal in certain circumstances, such as medical emergencies. This would prevent the trust from diminishing due to excessive withdrawals, ensuring that it will provide income for the rest of the beneficiary's life.
As is the case with many California residents, your pet has a special place in your life and relies on you for all of its needs. Perhaps you have wondered what would happen to your pet if you were to pass away with no one to care for it. There is a solution whereby your pet can continue to receive proper care after your death. As part of your estate planning, our attorneys can assist you in drawing up a pet trust fund in which you set aside finances for the complete care of your dog or cat.
Revocable living trusts are quite popular for many people in estate planning. These trusts are set up and operate while the grantor is still alive and can help avoid probate court after the grantor dies.
California residents who are interested in planning an estate may have questions about incorporating a trust into their preparations. Knowing what trusts are available and which ones work best in certain circumstances makes the choice easier.
California residents who wish to donate their estate to a charity may be interested in learning how a charitable trust works and how it may benefit them. Charitable trusts, as outlined in the Internal Revenue Code, are non-exempt trusts exclusively made for charitable interests and that are entitled to a charitable contribution deduction allowance. Unless charitable trusts meet the qualifications of a public charity status, the IRS considers charitable trusts to be private foundations.
California residents often incorporate trusts into their estate plans. Contrary to some popular myths, trusts may have significant value during the life of the grantor, they do not require as much work to create as people might think and they can be useful for those of limited financial means.
Many individuals sometimes make the mistake of relying solely on wills or not doing estate planning at all. Wills are subject to probate and therefore the attendant public scrutiny of court documents. By setting up a revocable trust, actor and California resident Robin Williams prevented his family from having to deal with probate, which can be a long and unpleasant process. The terms of trusts can be kept private as well as any challenges or disagreements.