Estate Planning for Young Families
Young families often don’t think about estate planning until it’s too late. You might believe you have plenty of time to put your affairs in order, but the truth is that every young family should prepare for the unexpected. A good estate plan will ensure your family is financially secure if you were to die from an accident or illness.
When it comes to estate planning, it’s best to consult with an experienced Bakersfield estate planning attorney who understands the intricacies involved. At the Law Office of Kyle W. Jones, we work with young couples from all over the San Joaquin Valley who need help putting the legal measures in place that will protect their surviving spouse and children should they pass away.
What’s Included in an Estate Plan?
For most young families, the estate planning process is relatively simple. However, it grows more complicated for those with considerable wealth. As an estate planning attorney, Law Office of Kyle W. Jones can see you through the process from start to finish. Your estate planning documents include any of the following listed below.
1. Living Will
A living will is a legal document that explains your wishes regarding your healthcare should you become incapacitated. It’s also known as an advance healthcare directive, which your healthcare providers will use to determine your course of treatment if you’re unable to do so yourself. In this directive, you can address the measures your doctors can take on your behalf, such as:
- Life support
- Palliative care
You can elect to have your healthcare providers use all of these measures in your treatment, or you can ask that no measures be taken to extend your life.
It’s also a good idea to develop a healthcare power of attorney so that you can select a healthcare proxy. If you are incapacitated, this person will be able to make medical decisions based on the instructions that you’ve left in your living will.
2. Durable Power of Attorney
A durable power of attorney can give another person the legal authority over your estate if you are incapacitated. This person is often the surviving spouse, but you may instead declare a trustworthy friend or family member. This person will be able to disperse your finances to pay your family’s bills and provide for your children. If you don’t want the person to have full access to your entire estate, you will be able to identify which assets they will be in control of, and you can revoke this authorization at any time.
3. Letter of Intent
A letter of intent is used to provide your loved ones with instructions on what to do immediately following your death. It’s not a legally binding document, but since a will might not be ready for days or even weeks after your death, it’s smart to create the letter of intent so that your family has some direction regarding your wishes as they pertain to your funeral, the care of your children, and your finances.
4. Last Will and Testament
Your last will and testament fully outlines how your estate will be managed and who will care for your children in the event both you and your spouse were to die. It’s important to select a guardian you trust to care for your children through adulthood. Clearly identify this person in your will and be sure to designate one or two backup guardians if the first one is unable or unwilling to care for your children. You don’t want a court deciding who should raise your children, so be sure to discuss your wishes with the guardians before creating your will so they are not caught by surprise.
For your last will and testament, you’ll also need to declare an executor to manage your estate. They will act as a personal representative to ensure your assets are handled according to your wishes. This will include opening probate, gathering your asset information, paying your outstanding taxes and other debts, and dispersing the rest of your assets to the people you’ve listed as beneficiaries. This person can be a responsible friend or family member but may also be an attorney or other trusted advisor.
When you’re deciding on how to divide up your assets, you should know that some assets (probate assets) can be governed by a will and some (non-probate assets) cannot be. The latter already have a contracted beneficiary, so they won’t need to go through the probate process, meaning you don’t need to add them to your will. All you need to do is ensure the right individual(s) is identified as the beneficiary of the account.
These non-probate assets can include:
- Life insurance policies
- Retirement accounts
- Bank and brokerage accounts that designate a beneficiary
- Real property owned in joint tenancy
- Real property owned as tenants by the entirety
Once you’ve declared your beneficiaries on these accounts, then you need to list the remaining assets in your will. These will be subject to the probate process and might include:
- Financial accounts where you’re listed as the beneficiary
- Personal property like art, collectibles, and jewelry
- Real property owned as tenants in common
- Individual bank and brokerage accounts
5. Trust (s)
Trusts are a crucial part of the estate planning process for a young family with minor children. A trust will give your children financial security in the event of your passing. You can dictate how your assets will be dispersed to them, such as providing for living expenses through their childhood and adolescence and then giving them full access to your estate when they reach a certain age.
Your trust will designate a trustee who will be in charge of managing the assets for your children. It will also list the heirs of your estate. Lastly, it will establish the conditions of the trust. There are two common types of trusts: revocable and irrevocable. A revocable trust allows you to change or terminate the trust at any time while an irrevocable trust cannot be amended. Most young families elect to use a revocable trust.
Bakersfield Estate Planning Attorney
No one likes to consider what could happen in the event of their death. At the Law Office of Kyle W. Jones in Bakersfield, we’re here to help with the estate planning process. Contact us today for a consultation.