You’ve just inherited some real property and a nice chunk of money from a loved one or friend. While you’re excited, you may be wondering if both the Californian and federal govenments will want their share of your newfound wealth and take out taxes.
Since the U.S. Supreme Court decision in Obergefell v. Hodges in 2015, LQBTQ couples enjoy the same rights to marriage as heterosexual couples. These rights also extend to estate planning and providing for your loved ones when you’re gone and also planning for every contingency in life for yourself, whether you’re married or not.
Estate planning involves designating beneficiaries for your loved ones when you’re gone. Most people think of this as creating a last will and testament, which is generally the basic building block, but going beyond a will, a trust offers benefits over a simple will. For one, if your assets are in a trust, they will pass to your beneficiaries outside of probate court proceedings. Probate can take months and even more than a year if there are challenges.
Estate planning involves creating legal instruments that will distribute assets to your loved ones when you’re gone. The most commonly known document for doing this is a last will and testament, commonly referred to as just a will. However, because wills need to go through probate court proceedings, which can take months, many people create revocable trusts, also known as living trusts, whose asset distributions and other instructions can be completed quickly outside of probate.
When people hear the term “estate planning,” they may shrug it off as something that only people with an abundance of money need to worry about. In practical terms, estate planning is a tool used to plan for what happens to whatever you accumulate throughout a lifetime of working – who gets what in the long run. That’s what a simple last will and testament can do and what a living trust can do even better.
Joint wills may seem like a cost-effective way of passing on assets, first to your surviving spouse or partner, and then to any children you may have. Unlike an individual will, however, a joint will requires both the consent and the signatures of both parties.
Most people put off estate planning for as long as possible. Survey after survey indicates that the percentage of Americans who have even created a last will and testament hovers around 40 percent. Even the pandemic, with its daily reports of thousands of deaths, barely moved the needle, according to the yearly survey done by Caring.com.
You’re pondering what to leave to whom among your heirs as you set about doing your estate planning. One of those heirs, however, is – to say the least – not good with money.
Estate planning involves taking a comprehensive look into the present and future to create legal instruments that protect you and your loved ones, not only after you’re gone but while everyone is still here. A last will and testament is probably the one legal document most people have heard of, and it is generally associated with who gets what after you’re gone.
Retirement accounts are treated differently than other assets when it comes to estate planning and distribution upon one’s death. Real property, cars, art collections, investments, and other assets normally will have to be probated if the primary owner dies unless that person established a living trust.