Estate planning is a way to ensure that your assets are distributed according to your wishes after you pass away. This involves making decisions about who will receive your assets, how they will receive them, and when. Essentially, it’s a plan that dictates how your property, finances, and personal belongings will be handled after you’re gone.
Talking about estate planning with your parents might not be the easiest conversation to have, but it’s an important one. Bringing up the topic shows that you care about their future and want to make sure that their wishes are carried out. It also gives you and your parents the opportunity to discuss important issues, such as end-of-life care, funeral arrangements, and the distribution of assets. Having these conversations can help alleviate stress and uncertainty for your parents and your family in the future. Additionally, having a solid estate plan in place can provide peace of mind for everyone involved.
You can also include instructions on how to handle the assets you are leaving behind. For example, you can dictate that an asset must be sold and the proceeds distributed a certain way.
Estate planning can include things such as who will take care of your children if they are young, who will inherit particular assets, and whether or not there should be a probate court process after your death to distribute your assets.
Although these things may not seem important at the time, it is important to discuss them with family members so that there is some sort of consensus on what to do with your possessions after you die. Estate planning also helps avoid conflict between family members after a death occurs.
It’s not about the money
People tend to avoid talking about death and estate planning because they think it’s morbid or emotional. Unfortunately, not having a conversation about what will happen to your assets after you die can have serious consequences.
You may know that you want your spouse to have your assets, but if you don’t tell a lawyer or financial advisor how much money you have, they can’t do their job.
It’s important to talk to your loved ones about estate planning so that they know what to expect and can take the appropriate steps. You might even find that it brings you closer together and helps clear up any confusion or conflict.
As with any difficult conversation, start simple and be respectful. Try asking questions about what someone wants and whether they have thought about estate planning. Then, shift to talking about your own plans in a non-threatening way.
Understanding your parents’ will
Once you’ve had the conversation about will changes and updates, you can move onto the next step: understanding what your parents’ will says.
If your parents have already passed, you can still discuss what they would have wanted with regards to estate planning. You can do this with a lawyer or by reading the will itself.
Reading the will is a good way to learn about your parents’ wishes. It can also help you understand their thinking on estate planning as a whole.
By understanding their will, you can understand more about their wishes regarding inheritance. You may even find clues as to who may receive what items or assets.
Discussing who will take over finances
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If one parent passes away, the other parent will need someone to take over their responsibilities. If both parents pass away, the children will need someone to take over their responsibilities.
Discussing who you would like to take over your responsibilities is important to discuss. Whether it be a trusted family member or friend, or a financial advisor or accountant, there needs to be someone trustworthy that knows your wishes.
You can also choose more than one person if you think this would help ensure your wishes are followed. For example, you can give two people responsibility and make them work together to carry out your wishes. This can help prevent conflict between people after your passing.
It is also important to have these conversations early, because it helps put people at ease and allows time for them to prepare themselves before any unexpected events occur.
Discussing who will take over the house
A common issue that arises is who will take over the family home. Many parents want their children to have the house when they pass, but it can be a heavy burden to place on children.
Children may not want the house, may not be able to afford it, or may want to downsize. However, having the home means they have to take responsibility for maintaining it.
You can create a Parent’s Bill of Rights that states that they have the right to give the house to whom they want, when they want. This way, they can discuss with their children whether or not they want it and whether or not they are ready to take on the responsibility.
Discussing who will take care of the pet is a similar issue that arises. Pets are very important parts of families and people often do not want to discuss who will take care of theirs after someone dies. This can be hard for someone who was never very close with their parent’s new spouse or child.
Understanding power of attorney
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Power of attorney is the ability to give someone the legal right to conduct transactions or activities on your behalf.
This can include the ability to make financial decisions, such as managing investments and paying bills, or it can include the ability to manage real estate transactions or your healthcare decisions.
Power of attorney does not require that person to make decisions in your best interest. It only grants them legal authority to act on your behalf.
Although having a power of attorney is important, it is even more important to have a will. A will specifies what happens to you assets and who has legal authority over those assets after you die.
If you have a will and do not have a power of attorney, then someone outside of the family cannot take over making these decisions. This can help prevent disputes within the family after someone has passed.
Discussing who you want to take care of you
If you have young children, you may not want to talk about who you would like to take care of them if something happens to you. This is a sensitive topic, one that can cause family conflict and fights.
However, it’s important to have this discussion with your spouse or partner so that they know what you want to do and can plan for it.
If you have no plans to divorce, then your spouse or partner should be the person who takes care of your children if something happens to you. If you do not trust your spouse or partner to take care of your children in that situation, then you should discuss legal guardianship with a lawyer.
Most people don’t think about estate planning until it’s too late, but having these discussions now can save a lot of stress and fighting later on.
Plan for future children or grandchildren
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If you have children, you can consider writing a will that names your children as beneficiaries. This is called a beneficiary designation and it can be in a will or trust.
If you have a trust, your children can be beneficiaries of the trust and receive money or property when the trust ends. If you do not have a trust, your children can receive money or property at your death by intestacy.
If you do not want to leave anything to your children, then you can write a will and leave everything to unrelated people or organizations. This is called disinheriting your child and can be very difficult for them to accept.
Children can also dispute wills and trusts, which may cost money and time. To prevent this, check with an attorney about having one put in place.
Plan for future marriage or partnership
If you are in a committed relationship, or plan to be in a committed relationship in the future, it’s a good idea to discuss your wishes with your partner.
If you wish to leave some of your assets to your partner, you can include them in your will or estate plan. If you want them to have certain assets, you can create a trust for them.
If you would like your loved one to inherit some of your assets at an earlier time than if you died without a will or estate plan, you can create what is called a disclaimer agreement.
This allows your loved one to take ownership of the property at an agreed upon time or event, such as marriage or their 25th birthday. This helps ensure they continue living comfortably while also being able to receive the gift at that time!
These are all things that can be discussed with an attorney.
If you’re in California, I would be happy to answer your questions, and help guide you to a secure financial future for your loved ones. Please get in touch with me and we’ll talk. I don’t bite!