The Who, What, and How of Estate Planning

Before taking a vacation you carefully pack your bags to ensure you have everything you need. Packing often requires planning or making a list. With planning, you can make sure you don’t forget something important – such as shoes, personal care items, or medicine.

Just like getting ready to travel, preparing your estate requires planning. A good estate plan ensures that you are prepared so you and your loved ones have what is needed when it is needed. Whether you wish to leave your estate to an individual or to your favorite charitable causes, coming up with a plan is the place to start.

Let’s begin with some definitions.

ESTATE: An estate refers to all your assets and personal property owned at the time of death. If you have a will, it documents who will inherit your estate. If you die without a will or trust, a court determines who will inherit your estate. In both cases, if you have enough assets, a probate court will supervise the settling of your estate, which could cost time and money. 

TRUST: A trust is a legal agreement in which you designate one or more people (called trustees) to hold your assets for certain people (called beneficiaries) subject to certain terms. The most common type of trust is called a revocable living trust, meaning you can change or revoke your trust during your lifetime. You can set up a living trust to name some of your assets (like your home) during your lifetime, and then give those assets to others when you pass away. Assets held in the living trust are best protected from probate, which is why most people set them up.

WILL: A will serves as a backup to a living trust. Sometimes called a “last will and testament,” it is a document that states your final wishes. It is read by a county court official after your death, and the court makes sure that your final wishes are carried out. Most people use a will to leave instructions about what should happen to their property after they die. However, a will can also name an executor, guardians for children and property, decide how debts and taxes will be paid, and provide for pets.

Here are some questions to get you started with your planning:

  1. Who Matters to You? Your will or living trust can be used to provide for family, friends, and charitable causes. Consider who or what charities are important to you and what legacy you want to leave.
  2. What Do You Own? You may own real estate or have personal property such as furniture, cars, jewelry, and other items. Perhaps you have an insurance policy or retirement, bank, and investment accounts. You should ensure that your plan accounts for all that you own.
  3. How Should You Give? There are many ways for you to provide for the people or charities you love, using what you own. You may want your plan to include charitable vehicles, such as gift annuities and charitable remainder trusts. These can accomplish your charitable goals, give you income and tax benefits, and can provide for your family and friends. If charitable giving is part of your living or legacy intentions, LBCF can assist you in setting up the appropriate fund such a Legacy Fund, Charitable Remainder Trust, or a Charitable Gift Annuity.

Like more information? Call (562) 435-9033 or plan on attending an upcoming, free wills and trust presentation.