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Fullerton Estate Planning Law Blog

New grandchild? Here are some ways to provide for them

When you have your first grandchild, it can be an amazing feeling. It can also make you realize just how old you've gotten and how important it is to provide for the family you have and love.

As you review your estate plan following your grandchild's birth, one thing you may want to look into is setting up a trust for them. If your grandchild is going to be your beneficiary, then having a trust may be a good idea. There is a chance that your grandchild may not yet be 18 by the time you pass away, and there are some special situations to consider when deciding what to leave behind for them (and how to do so).

Considering inheritance timing with a second marriage

You have a lot to consider when looking at your estate plan as you get married again. A second marriage can complicate that plan, no matter when in life it happens. That's not to say you shouldn't get married, but just that you need to carefully consider what it means and what you can do about it.

One thing to think about is the inheritance timing. When do your children get their inheritance? How can you make it happen?

Married couples sometimes use joint wills

You and your spouse can certainly write your own wills and do your own estate planning if you would like. However, remember that you also have the option to use a joint will.

Technically, a joint will is just one that two or more people use together. This means that it could be used outside of marriage, perhaps by people in a long-term relationship. That said, it is most common to see married couples use these wills when addressing their estate planning, often after they have children together.

Life insurance companies don't care about your will

You decide that it's time to write a will. You have a fair amount of complex assets, but much of your wealth comes from a life insurance policy. You know that it's going to pay out when you pass away, so you write into the will that the money should get split evenly between your three children. It seems easy enough, and you assume that covers it.

It doesn't. The life insurance company does not care about your will. All they care about is the beneficiary designation. That's the person you picked to get the money when you created the policy. It's a legally binding document. Moreover, your estate planning doesn't impact it because "it supersedes your will."

Can you use a handwritten will?

You're thinking about writing a will, but you don't like the idea of typing one up. You worry about cybersecurity and you don't know who else may access any digital files you create. It seems better to write the will yourself and keep it in a safe place.

Can you do this in California? If you do, is that will going to stand?

Questions that determine how long probate takes

If you pass away and your estate goes into probate, your heirs probably hope it wraps up quickly. Unfortunately, it may not. This process can drag on for weeks or months, depending on a lot of different factors.

To see why it takes longer for some estate than others, just ask these questions:

  • Does the estate hold a lot of debt that has to be taken care of?
  • Are there any tax implications?
  • Are the assets fairly complicated or are they simple?
  • How many people are going to inherit part of the estate?
  • Where do all of those people live? Do any of them live so far away that it makes meetings problematic?
  • Are there going to be any disputes or is anyone planning to challenge the will?
  • Is there even an estate plan? Does the estate come with a will or is everything going through the court?

Is it a mistake to leave assets to your children directly?

You know that the simplest way to leave your assets to the next generation is to give those assets directly to the children. You can write the amount they get into your will and have the executor cut them a check after you pass away. It's easy. They get the money they expect.

But is that a mistake? It may be. Carefully consider your situation and your family. Do not just do this because it is easy.

The aging population is increasing rapidly

The population in the United States is trending toward including more and more elderly individuals. This is happening because baby boomers -- the population spike seen right after the end of World War II -- are growing older and pushing the numbers up.

For example, consider that studies in 2006 found that there were just 37 million people in the United States who were past the general retirement age of 65 years old. Fast forward a decade, to 2016, and that number had gone up to about 49.2 million people.

What if you forget to put assets into a trust?

You set up a trust to transfer your assets on to your children when you pass away. You put some of your assets into the trust at the time. However, you do not pass away for another 10 years. In that time, you gain more assets that you forget to add to the trust. You never update it. Now, what happens to those assets?

Typically, the assets then have to go through probate. They'll still pass on to your heirs, but they may lose some money in taxes, and it can take time. It all depends on the specifics of your estate. But do not assume that all assets end up in your trust. No matter what you intended, the courts don't take this step for you. It's up to you to do it in advance.

Picking a guardian under the threat of divorce

You decide to do your estate planning, and your assets are actually not your main concern. You want to get things set up for your children, who are still minors. As such, your first order of business is to pick guardians for the kids.

When many people arrive at this point in their lives, they pick another couple. That couple may or may not have children of their own, but they are still a married couple who can take the child in and raise them as part of their family.

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