As many California residents may know, having an estate plan provides some certainty that an estate may be divided according to a benefactor's wishes when death occurs. Taking control over one's estate also allows an individual to make sure family members inherit according to their needs.
When setting up an estate plan, keeping in mind what might be best for one's beneficiaries is an important consideration. For instance, sometimes children with special needs are involved in a person's plan, and providing properly for them means looking at the way they inherit assets from the estate. If they receive government assistance, providing them with a lump sum may mean they will lose that income. Setting up a trust designed with this in mind may allow them to keep benefits such as Medicaid. As another example, some children may not benefit from an inheritance when they are younger. Instead, one's estate planning format may involve a trust that will disperse the funds later in life.
Furthermore, funding the trust is an important second step. If the assets are not transferred to the trust's ownership, the device may not accomplish what the grantor intended. Choosing a trustee is another essential step. However, the choice a grantor makes originally may not be appropriate as time passes. Reevaluating the trustee or choosing a corporate trustee may be best in some circumstances. In addition, a corporate trustee may help avoid problems between family members.
Reevaluating a trust and a will on a regular basis may help ensure that it is up to date and takes into consideration the many life changes one experiences. Seeking legal advice when setting up an estate plan and planning for subsequent reevaluations may provide the guidance throughout the process. A lawyer who is familiar with estate planning techniques could help a client draft the necessary documents for creating a comprehensive plan.
Source: CNBC, "Trust bust: Steer clear of the 8 biggest estate-planning mistakes", Barry Glassman, January 03, 2015