Contact 949-945-0415

Newport Beach Estate Law Blog

What can you do with your estate if you don't have children?

For most people, estate planning just means leaving their assets to their children. When deciding who should make medical decisions for them and who should handle their financial affairs at the end of their lives, they also pick children.

But what if you do not have any children? That makes these decisions more difficult, but you do still have options.

Who are the most popular guardians for children?

To make sure someone will take care of their children if they pass away, parents often pick guardians. They can do this as part of the estate planning process. The guardians only apply until the children are no longer minors, in most cases.

If you're thinking about doing this yourself, you may be mulling over who to choose. It can help to consider the most popular choices in the United States.

The assistance your special needs heir requires may depend on age

When doing estate planning with an heir who has special needs, you really need to take the time to carefully consider what can be most helpful to them when you are gone. Careful advance planning is the key. If you do it correctly, your assets can change their life, but you have to remember that this all falls on your shoulders. You need to make the proper decisions at the proper time.

Often, this means doing things well in advance. You do not want to take any risks with putting estate planning off until a later date. If you planned to create a special needs trust and never got around to actually doing it, and then you pass away in an unfortunate accident, the ramifications for your heir can be dramatic. For instance, will the money they inherit directly -- without a trust to manage it -- make it so that they cannot get government assistance? It's something you want to think about.

Are you a new parent? Take these 5 estate planning steps

As a new parent, your days are filled with changing diapers, making runs to the grocery store and finding time to catch up on your sleep. In between all of this, it's critical to review your estate plan with the idea of making changes for the better.

If you don't yet have an estate plan, creating a will is the first step you'll take. However, you can't stop there. There are other steps to take, with these five among the most important:

  • Name a guardian: Who will raise your children should you and your spouse pass on? Naming a guardian when your children are young is extremely important, as you never know what the future will bring. You want to have peace of mind in knowing that the right person will raise them if the worst happens.
  • Name an executor: This person is responsible for carrying out your wishes as outlined in your will. They're also in charge of the probate process, which can be time-consuming and complex depending on the details of your estate.
  • Choose your beneficiaries: Typically, the beneficiaries of assets such as life insurance policies and retirement accounts will be your spouse. However, this doesn't always hold true. You may decide to divide your assets equally between your children.
  • Create a durable power of attorney: Should you suffer a serious illness or injury, it's critical that the right person be able to step in and make decisions on your behalf. Most people name their spouse, as this person already has a sound grasp of both medical and financial related details.
  • Keep your will in a safe place: Creating a will is important, so don't store it in a coffee can on top of your refrigerator or under your mattress. It's a must to keep it in a safe place, such as a safety deposit box at your local bank or in a fireproof box at home.

You may save if you wait until after death to sell your house

Looking to save on taxes on your estate? One option you may want to consider is selling your second home after you pass away.

Real estate that you do not use as a primary residence likely is not exempt from the capital gains taxes. So, if you bought that house 20 years ago and the value has tripled in that time, you may have to pay a heavy amount -- think in the realm of 35% -- when you sell. That's a lot of profit going to the government, reducing the value of your estate for your heirs.

Do wealthy people live longer?

With the cost of healthcare and long-term care in the United States, it may be natural to assume that wealthy individuals live longer than those with less access to financial means. But is this assumption true?

Studies have shown that it is. Some early studies indicated that there was a fairly wide gap, but more recent studies have demonstrated that the gap, while it does exist, is not as big as previously assumed. Some of the reason for this is that people move between economic groups, rather than staying firmly in the groups they start in. The earlier studies did not account for these changes.

How can you plan to make your business last?

While thinking about business succession planning, you have probably come across some rather daunting statistics. For instance, a massive 70% of family businesses do not make it to the next generation. About 88% fail by the third and 97% fail by the fourth.

Obviously, your goal is to stay out of these statistics. For your family, you want the company to last. What can you do?

The reality of how many people do estate planning

When you think about how many people do their estate planning, it's easy to assume that every adult must have some sort of plan. After all, everyone has assets, even if some people have more than others. Many people have children. And, above all else, all people are going to pass away at some point. That's the human condition. It's the world we all live in. Certainly, we're all prepared, right?

Not really. Reports show that about 42% of people in the United States actually have written a will. This means that the other 58% have nothing in place. They have no plan for their heirs, no plan for their assets and no real idea what will happen to their estate when they pass away.

Why divorced women with children may want to make a trust

As a newly divorced mother, you probably have a lot on your mind. For example, you have to figure out how to provide everything your children need on just the income you currently have and the child support you receive. Many divorced parents only realize after the end of their marriage that child support typically does not cover even half of the monthly costs caring for a child incurs for your household.

One of the financial considerations you could overlook to the detriment of your children and your own peace of mind is the need to rearrange how you structure your estate plan. You may have shared the last will with your ex during your marriage, or you may not have even bothered to create an estate plan yet.

Add balance to your incentive trust

Are you thinking of using an incentive trust to give your heirs motivation as you pass your assets on to them? One of the most common ways that parents use an incentive trust is by specifying yearly payouts that are tied to employment. For instance, the child could get $10,000 per year from the trust for every year that they hold a job for all 12 months. In some cases, parents just stipulate that the trust pays out the same amount that the child earns, giving them extra incentive to work harder.

The idea behind this is simple: The trust motivates the child to work, rather than giving them money that allows them to neglect their career. However, what you'll find is that things are rarely as simple as they appear.

Contact

The Soto Law Group
1101 Dove Street,
Suite 200
Newport Beach, CA 92660

Phone: 949-945-0415
Fax: 949-945-0197
Map & Directions

Avvo Review