What are the key estate planning documents? Who should have an estate plan? What are the differences between a will and a trust? Why do you want to avoid probate? This quick 3-minute video with BFSG’s Senior Financial Planner, Paul Horn, CFP®, CPWA®, breaks down the basics of estate planning. Watch here for more.
Disclosure: BFSG does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to BFSG’s website or blog or incorporated herein and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment or investment strategy (including those undertaken or recommended by Company), will be profitable or equal any historical performance level(s). Please see important disclosure information here.
By: Michael Allbee, CFP®, Senior Portfolio Manager
The most popular estate plan is doing nothing. In fact, according to USA Today, 55% of Americans with children die without a will (known as dying “intestate”). However, if you have not done your own estate plan, the probate code has one for you. Probate is a court-supervised process with the courts following state statutes at death to validate the will (if any), appoint a representative, take care of the decedent’s financial responsibilities, and distribute assets to heirs or beneficiaries. Obviously, you may not like their plan. In addition, probate is very costly, time consuming, and it is public record. By having an estate plan, you opt out of the default plan.
A complete estate plan is typically built around some key documents: a will, trust, durable power of attorney, advance health care directive. At a bare minimum, we recommend having a last will and testament to communicate your final wishes pertaining to how your assets are distributed, to identify a guardian for your minor children, and to identify the executor of your estate. Importantly though, a will won’t avoid probate since the court decides if a will is valid (in CA estates with a value of $166,250 or less may qualify for a non-formal probate case – each state has different rules).
Most people opt to have an estate planning attorney draft their last will and testament, however, there is no requirement that an attorney do so. But we often see these 5 mistakes in layman-drafted documents (1):
A trust is another method of estate transfer and only a trust can skip probate court. Learn more about how trusts can help carry out your wishes, protect and control your assets after your lifetime by watching this short video here. Here is a summary of differences between a Last Will and Revocable Trust.
Whether you choose a will or a trust, you should seek professional advice. As always, our team of CERTIFIED FINANCIAL PLANNERS™ stands ready to assist: firstname.lastname@example.org.
Disclosure: BFSG does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to BFSG’s web site or blog or incorporated herein and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please see important disclosure information here.