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Vincent M. Casiano, Esq. Casiano Law Firm

Do I Really Need an Estate Plan?

Estate Planning text, Office desk with computer technology, high

Anyone who becomes sick and gets diagnosed with a life-threatening disease or has a sudden health crisis where they think about what would happen if they died, is not asking why they should have a well thought out estate plan in place. But let’s say you and your entire family are in good health, you have a good steady job and income, are in a stable and loving marriage and have enough in savings to get through an unexpected downturn in the economy. In this instance, estate planning can feel unnecessary, something to put off until absolutely necessary. Most of us – and it is human nature to do so – discount the possibility that we or a family member will get into an accident or come down with a debilitating or terminal illness. But while you do not think your house is going to burn down or that you will be in a car accident, you do purchase insurance to protect your family and yourself against the unlikelihood of that happening. So doesn’t it make sense that you would also have in place an estate plan that will provide a road map for your loved ones should you or they become disabled or pass away unexpectedly? Thinking about estate planning in this way makes having a comprehensive plan essential for your peace of mind and protecting those that you care most about. Estate Planning is a process that is best done with a dedicated San Diego Estate Planning and Elder Law Attorney. I have spent the last 20 years dedicating my practice to helping families create estate plans that meet their individualized needs. Read on to learn about some of the reasons why estate planning is important.

Planning for Your Own Needs

Estate planning allows you to plan ahead for the worst, whether likely or unlikely. You may become unexpectedly incapacitated due to an injury or an illness, unable to manage your investments or make your own financial and medical or health care decisions. A good or comprehensive estate plan allows you to do several things. First, it allows you to designate, in order of succession and priority, who will make decisions on financial and medical or health care matters when you are unable to do so. Second, it provides specific direction on what you want to be done with your assets, including your property and financial investments, while you are alive and when you ultimately pass, as well as what health care decisions you want to be made regarding your care, quality of life and end of life decision making.

Deciding Where Your Money Goes – Who Gets What and How

If you don’t have a Will or Trust, or if your Will or Trust is not drafted properly by an experienced, qualified attorney, your loved ones will be forced to file petitions with the county court where you lived when you died, as well as other counties in which you owned property. Then the judges in those courts will order your estate to be distributed in accordance with California laws on intestate succession. Your money and property might not go to the people whom you would want to receive it or in the proportions you would wish, and any inheritance received will not be protected at all. With an estate plan, you can make specific gifts to family members, friends, educational institutions and charities with peace of mind.

Protecting Family Wealth

You’ve spent a lifetime acquiring, managing, growing and protecting family wealth, and you want to keep that wealth in the family for future generations. Depending on how you make gifts to descendants, however, that money could quickly be lost to bad investments, divorce, creditors, or spendthrift habits. Having a comprehensive estate plan allows you to take total control over your estate, including controlling who inherits and how much they inherit. Just as importantly, it can protect inheritances from creditors, lawsuits, ineligibility for public benefits if someone is disabled, predators, and minors or irresponsible heirs who might make poor decisions on how to use their inheritances. Proper estate planning will protect your gifts from these pitfalls and travails that can befall families with less-nuanced estate plans, or no estate plan at all.

Minimizing Family Troubles and Contests

While no estate plan can prevent a disgruntled heir or other person who does not feel they were treated fairly, a well-drafted estate plan can include provisions that will discourage those contests from being filed as well as the likelihood of a contest succeeding. Ambiguous or defective Wills and Trusts can be challenged based on allegations that the person who created the documents did not understand what they were doing, i.e., was suffering from dementia or other ailments which affected their cognitive functioning, or that the person was subject to undue influence from a close family member or caregiver. This is even more likely where the Will or Trust is ambiguous or did not include the required language to make it legal. The use of comprehensive No-Contest clauses and Trust Advisors can drastically reduce probate litigation in this regard.

Taking Care of Special Needs Family Members

If you have any heirs who are disabled for any reason (whether that be a developmentally-disabled child or an older person suffering from dementia) and they are relying on public benefits or will need to become eligible for public benefits at some point in the future, and you want to ensure that they are well cared for, special needs estate planning is essential. Special Needs Trusts are necessary to protect disabled individuals’ inheritances from being considered a resource for means-tested public benefits such as Medi-Cal (called Medicaid in most other states) and supplemental security income (SSI), making them ineligible for such programs. ABLE accounts, in certain instances, can be used to provide a fund to pay for qualified disability expenses for a person who became disabled before attaining the age of 26 without affecting their eligibility for needs-based governmental programs. If you have a special needs child or other dependent family member, it is time to start planning now. But even if none of your family members are disabled, including provisions in your estate plan that would hold any beneficiary’s inheritance in a Special Needs Trust if they become disabled before receiving their inheritance could be a lifesaver. Only an experienced Special Needs Planning Attorney understands the nuances associated with including these essential provisions into your plan.

Incorporating Philanthropic Gestures

You might have a favorite charitable organization that you supported during your life or have identified a worthy charity that you would like to support going forward. Once your money leaves your hands, however, you can no longer control its distribution. One of the biggest mistakes is leaving an inheritance to someone and expecting that they will share that inheritance with a charity of your choice. Your heirs may not share the same affinity for that charity. A proper estate plan allows you to ensure not only that your family is cared for, but that your philanthropic ideals are upheld.

Minimizing Taxes

Only the very wealthy need to worry about bumping up against the estate tax, due to the extremely high exemption amounts currently in place. For those that do incur the tax, however, the price tag is steep, up to a 40% marginal rate. The current generous exemption ($11.58 million for an individual or $23.16 million for a married couple) is set to revert to pre-2018 levels in 2025, but even then, the estate tax will only impact individual taxpayers with estates of $5 million or more (or $10 million and up for a married couple).

If you are fortunate enough to need to be concerned about the estate tax, proper estate planning can help you minimize or eliminate the taxes levied on your estate as your property is transferred to the next generation, ensuring that the maximum amount of your assets go to your family and other loved ones.

Get the Right Estate Plan for You and Your Family

For help planning for your future and the future of your family, reach out to California Estate Planning and Elder Law Attorney Vincent M. Casiano, Esq. Call or email Attorney Casiano at his San Diego law office today at 619-800-6820 for a no-charge phone conversation to see how he can help your family.

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