Creating an estate plan is important for adults in California because it can ensure that a person’s assets go to the individuals chosen by that person. It can also ensure that dependents are cared for and that there are plans in place in case a person becomes incapacitated and cannot make decision about finances or health care.
Wills and trusts are documents that can be used to pass assets to beneficiaries, who may be family members, friends or an organization. A will can appoint an executor to manage an estate and a guardian for minor children. A trust passes assets without having to go through the public probate process.
A living will is a different type of document that outlines a person’s wishes for health care and end-of-life care. A health care directive or a health care power of attorney are also documents that address the medical care of a person who becomes incapacitated and cannot express their wishes. These documents appoint someone to do this on the person’s behalf. A financial power of attorney can appoint someone to manage a person’s financial situation. People who have dependents may want to consider getting a life insurance policy, which can help replace lost income and pay for such things as college tuition. People may want to contact an attorney for assistance in preparing the estate plan.
One advantage of contacting an attorney is that people are often unaware of what may be possible with an estate plan. For example, a person might have a family member with special needs who receives government benefits. Even a small inheritance could make that person ineligible for those benefits. However, if the inheritance goes into a special needs trust instead of being passed via a will, the person can still access the assets without endangering their benefits.