How an Estate Planning Attorney Can Help Safeguard Your Assets

Considering what happens to your assets when you die is a difficult task for many people. An estate planning attorney can help you address such issues and ensure that your loved ones receive what you want them to have.

An effective estate plan should include documents such as a will, trusts, and power of attorney, along with health care proxies and living wills. 

Trusts

Trusts can offer significant estate tax and other protective benefits. However, drafting the proper trust is important. Your estate planning attorney can guide you through the different types of trusts, ensuring they are correctly crafted. This includes establishing age attainment provisions and parameters for the trustee to give trust property to beneficiaries.

It is important to understand the difference between revocable trusts and irrevocable trusts. A revocable trust can be changed or revoked at any time, while an irrevocable trust must remain unchanged upon death. In addition to trusts, a skilled estate planning San Diego, CA, can help draft documents to address incapacity while you are alive. These documents include healthcare directives and powers of attorney. These documents ensure that your wishes are clear in the event of future incapacity.

Wills

Creating a will is a critical part of an estate plan. It helps ensure your assets are transferred to the people you want rather than being distributed by state law.

A will can also guide your wishes in the event you become incapacitated. For example, it can instruct family members on handling your financial affairs and any medical care you may need.

Often, a will is combined with a trust to reduce estate taxes and provide greater control over asset distribution to your heirs. It is important to update these documents regularly. 

Power of Attorney

Powers of attorney give someone the ability to act on your behalf if you are unable to do so. Depending on the type of POA you have, your agent may be able to access your bank accounts, pay bills, and sign financial documents on your behalf.

Many choose a spouse, adult child, or close friend as their agent under a durable POA. However, it’s important to carefully consider the person you select as your agent and what types of powers you wish to convey.

To help combat the potential for theft and self-dealing, it’s often a good idea to have a capable attorney draft safeguards into your POA. These may include requiring your agent to periodically report their activities to an outside party (like the family’s accountant or attorney) and that both agents agree on all major transactions.

Health Care Proxy/Living Will

The nuances of estate planning are complex. A thorough plan should include a will, trust, power of attorney document(s), health care proxy/living will, and beneficiary designations. Beneficiary designations can override asset distributions laid out in a will, so it is vital to keep them updated regularly.

A living will allows you to communicate your medical wishes to an agent, which can help avoid confusion or conflict among loved ones when the time comes to make critical medical decisions. It is recommended that you have open conversations with your healthcare agent to make sure they are comfortable taking on this responsibility.

Beneficiary Designations

Beneficiary designations allow assets such as retirement accounts and life insurance policies to pass directly to beneficiaries, bypassing the estate, thus avoiding the time and expense of probate. Beneficiary designations are often ignored, but they can be a powerful tool to protect your assets. You must take the time to designate primary and contingent beneficiaries for your financial accounts. 

A mistake on a beneficiary designation form can cause delays or even lawsuits in distributing the asset. In addition, a lack of clarity in the language can confuse who should receive what assets.