According to the latest Gallup Poll, some 46 percent of Americans report having created a will to designate the division of their assets when they’re gone. That percentage has remained fairly constant since the first poll was taken in 1990.
Not surprisingly, the older the respondent to the poll, the more likely they were to have a will in place. For those 65 and older, 76 percent reported having a will, while those 18-29 years old came in at 20 percent.
Planning for the future, no matter your age or station in life, can feel incredibly overwhelming. For this reason, many 18-29 year olds fail to consider the benefits of comprehensive estate planning. It’s never too early to start planning your estate.
At the Law Offices of Bruce Peotter, we have been helping individuals and families create estate plans to fit their unique circumstances for three decades now. If you already have a will or other estate planning instrument, we can review that to make sure it’s up to date and fits all your needs. Contact us in California or Colorado to get started creating a roadmap for your loved ones. We are proud to serve clients from our offices in Highlands Ranch, Colorado and Tustin, California.
Estate planning allows you to take care and provide for your loved ones once you’re gone. This can be done through a simple last will and testament, but the will must then be taken before a probate court to be administered. This is a time-consuming and often costly process.
Crafting a will is better than dying without one, which is called dying intestate. If you die intestate, your estate will still have to go through probate court, but the judge will decide who gets what. A will enables you to express your desires on how your beneficiaries should be treated.
A will is certainly the basic building block of estate planning, but it still forces your heirs to go through the probate process in court, where the will is adjudicated. Probate can take months—if any creditors or disgruntled heirs lodge complaints, the costs and time involved can rise quickly.
There are ways to legally avoid probate while ensuring your heirs and beneficiaries are taken care of. There are also steps you can take to protect yourself should you be in a situation where you’re incapacitated and unable to speak for yourself.
A legal instrument that will allow your heirs to avoid the hassles of probate is called a Living Trust. In a trust, you specify the division of assets and name someone to oversee the distribution. That someone is called a Trustee.
Until you become incapacitated or pass away, you continue to manage all your own affairs and assets. The Trustee takes over only when you are unable to do so yourself. When you’re gone, the Trustee can fulfill your desires as stated in the trust without going through probate.
While a Trustee has a fiduciary responsibility to manage your assets responsibly according to your desires, it is still a good idea to only choose someone who is very close to you to be your Trustee—often a family member or trusted friend or ally.
Another form of trust, called a Living Will or Advance Health Care Directive, can empower someone to make medical decisions for you should you become incapacitated. Normally, these documents are equated with “do not resuscitate” orders, but the directive can cover a variety of other medical procedures and treatments you either choose to accept or choose to deny if you’re incapacitated.
Trusts are usually accompanied by powers of attorney (POAs) that grant authority to an agent, or attorney-in-fact—often your Trustee—to manage your assets and affairs in your place. A POA does not, however, grant the agent authority to change your trust.
POAs can be so designed that they kick in only when you become incapacitated or pass away. A Durable Health Care Power of Attorney, for example, is the instrument of choice to create an Advance Directive.
There is also a category called special needs trusts. These are used when you have children who require special care or perhaps medical interventions. They can be used to supplement any care being provided by Medicaid (Medi-Cal in the Golden State) and to preserve assets for the special needs family member.
There are trusts for almost every purpose in estate planning. If you have a child whom you don’t trust with your money, you can set up a spendthrift trust. A trustee will manage the money in their stead and only provide funds for legitimate purposes.
It’s never too early to start estate planning. Wills and trusts can always be updated and changed as your life circumstances change.
Though you can never be too young to start, you can wait too long. If misfortune strikes and you become incapacitated, or impaired enough to no longer be considered “competent” legally, you cannot create a trust or will. The time to get started is now.
If you’re in the Highlands Ranch area of Colorado, including communities in and around Denver, or anywhere in the Orange County area of Southern California, contact The Law Offices of Bruce Peotter for all your estate planning needs. We can review what you already have in place or start from scratch. Let’s discuss your situation and make sure your future and your loved ones are secure.