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Fullerton Estate Planning Law Blog

Are your children planning to use their inheritance to retire?

On your end, estate planning focuses on passing your assets down to the next generation. You probably ask yourself questions like:

  • How can I divide things evenly?
  • How can I avoid estate disputes?
  • What do I do with the family home?
  • What should I do with family heirlooms that the children cannot split up?
  • Do I need to use a trust?
  • Do I want to give to charity?

These are just a few examples, but they're a good place to start. They help you focus on your own goals and work toward getting that plan in place.

One tactic to keep your parents' home

One of the biggest estate planning questions, for many adult children, is what they should do with their parents' home.

They may want to keep it from a sentimental standpoint. That's where they grew up. Maybe their parents built it. They have memories there, they know what it meant to their parents, and they can't stand to just up and sell it right away. It feels wrong.

Is a no-contest clause ironclad?

You're writing a will, and you mention to a friend that you worry about your heirs starting an estate dispute. One in particular seems like they may be unhappy with your decisions and may drag their siblings into court.

That friend tells you that there's a simple solution: Just use a no-contest clause. It makes it impossible to challenge the will by saying that the person gets nothing if they do.

These questions can help focus your estate planning goals

When you start your estate planning, it's important to first outline your goals. What do you want your estate plan to accomplish? What is most important to you? How can you make a plan that meets those goals and then builds on top of them?

To get started, it may help to ask yourself a few fundamental questions, such as:

  • If you suffered a serious injury or came down with a terminal disease, do you want doctors to use life-sustaining treatment methods? If so, which ones do you want them to use, and which should they avoid?
  • If you passed away without warning, what would happen to your money and assets? Would your family be able to support themselves?
  • If you suffered from an injury or illness that made it impossible to make crucial decisions or perhaps even communicate with others, who would make decisions on your behalf? Do they know what you want?
  • When passing your assets onto your heirs, what type of tax implications could that have? What can you do to shield them from a surprising tax burden?
  • Do you have any special things to consider when dividing assets, such as leaving different amounts to different siblings or giving money to charity?

What assets do you have?

It's the basic question behind the start of estate planning: What assets do you have? What do you want to happen to those assets?

It's not just about assets, of course. You also want to consider things like medical directives, legal powers of attorney, your family's future happiness and much more. But it begins with assets because your will and estate plan is a way to pass those on to the next generation.

When is a good time to create a living trust?

Living trusts are an excellent tool to deal with assets during a person's lifetime. The documents and the financial instruments they create can also give peace of mind to the people writing them with their lawyers.

  • What are the major advantages of living trusts?

One of the big positive parts of trusts is the privacy they offer their creators. Probate court is a public forum, and last wills and testaments are often read by executors in their entirety. Living trusts allow many estates to skip probate.

  • How big does an estate need to be for a living trust?

Sibling rivalries and estate disputes may stem from childhood

Estate disputes sometimes revolve around siblings who seem like they just want to do anything in their power to "win" against the other sibling. They act as if dividing up the estate is a contest. They may also be emotionally pitted against one another, as if they won't agree on anything out of principle.

The root cause of these disputes isn't always money. It may be pride, resentment or an old rivalry. Often, that's why it doesn't seem to make sense from the outside.

The main benefit of a special needs trust

If you have an heir with special needs, you may consider setting up a special needs trust to help take care of them after you pass away. However, you may also wonder why you couldn't just leave the money directly to them. Why put it in a trust first?

The issue is that they may not qualify for government assistance. The qualifications are based in part on the assets the person has to cover costs on their own. This means that they would have to spend nearly all of what you left them in a will before they could get assistance again.

Using only a will may leave your estate vulnerable

A will is, for many people, the basis of the estate plan. It's the first document they draft. It may be all that they think they need.

While writing a will is important, you need to know that you do not have any control over the estate, and you do not have many ways to protect that money. You pass it directly to your children and other heirs, and they can use it in any way that they desire.

Your health matters along with your lifespan

When writing a will and doing estate planning, people often carefully consider how long they think they will live. After all, you need to do long-term care planning and you need to consider how many assets will really remain when you pass away. There's a careful balance here. Your estate has to support you at the end of your life, and you also want to give whatever remains to your heirs.

One key thing to remember while thinking over this is just how healthy you are. While you can't always predict things like a heart attack or a stroke, the reality is that your healthy and unhealthy years have very different costs. It doesn't just matter how long you live. It matters how much care and assistance you need.

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