The most basic element of estate planning is the creation of a last will and testament. A primary question that you need to consider when contemplating your personal finances and estate planning more broadly is whether or not you need a will. When it comes to the question of drafting a last will and testament, there are some specific considerations to bear in mind.
If You’re Young and Have Little to No Assets
If you are on the verge of starting your working life, you likely have limited assets. If that is the case, and you are not married and do not have children, you can forgo drafting a will for the time being.
For example, if you are carrying student debt coupled with a car loan and even a mortgage, the odds that your assets will exceed your debts is slim. In other words, once your legitimate debts are satisfied, there really may be nothing of significance to distribute to heirs.
If You’re a Bit Older and Start to Accumulate Assets
If you’ve reached a stage in your life at which you’ve started to accumulate assets, even if you’re single the time may have arrived to draft a will. If you’ve reached a juncture at which you do have assets that exceed the value of your debts, you will want a last will and testament to ensure that the people you desire receive your property after you die.
If You Marry
When you marry, you need to draft a last will and testament, as does your spouse. The laws in some states allow for all property to pass to a surviving spouse when a married person dies. That is not the case in all states, including California.
In California, if you are married, all community property passes to the surviving spouse when a married person dies. Community property are those assets that were accumulated during the course of the marriage.
Noncommunity property of a married person who dies is distributed between the surviving spouse and children. The surviving spouse gets 50 percent of noncommunity property while the children divide the other 50 percent between them.
A will permits you the ability to alter the manner in which the laws of the state of California distributes assets of a married person who dies. In other words, if you want of all of your property to go to your spouse, you likely will need a will to accomplish that objective if you have nonmarital or noncommunity property assets.
If You Divorce
Approximately 50 percent of all marriages end in divorce, in California and across the United States. When a couple divorces, any will or wills that were created during the marriage are automatically voided. They no longer exist. Thus, if you divorce and have assets, you will need to create a new will in an expeditious manner.
When You Enjoy Financial Success
If you begin to enjoy financial success and acquire a growing amount in the way of money and assets, a last will and testament may not be the suitable way in which you convey your assets following death. You may reach a threshold at which estate taxes and inheritance taxes become an issue. If that is the case, you may be in a position at which the best estate planning vehicle for you is the creation of some type of trust. If that is the case, you may still require a last will and testament; however, the primary vehicle through which your primary assets are conveyed to the beneficiaries you desire is what legally is known as a trust agreement.
Funeral and Disposition Directives
You can include your funeral and disposition (burial or cremation) directives in a last will and testament. With that said, you do not need a will to set out what you would like to see done for your funeral and the final disposition of your remains. In California, as is the case in other states, applicable laws permit you the ability to set forth funeral wishes and desires in writing but not with the authentication requirements needed in an instrument like a last will and testament or trust agreement. These wishes should be conveyed to a person you trust to ensure that they are carried out at the time of your death.
The Vital Importance of Estate Planning
The ultimate reality is that determining when and how to estate plan can be a complicated undertaking. For this reason, engaging the professional services of a qualified estate planning professional typically is a wise course of action to take. There are a number of different types of estate planning professionals you can select to obtain advice. In the end, because a primary aspect of estate planning will be the drafting of legal documents, many people elect to retain the services of a skilled, experienced estate planning lawyer.