Debunking Misconceptions Estate Planning | Finance information

What does it mean to

have no estate plan? What does it mean to have neither a will nor a trust? While you may have heard many ?horror stories? and rumors, you may not truly understand the significance of not having a formal estate-planning documents prepared.

Here are some of the misconceptions and attitudes about having many have not an estate plan:

All of my money will go to the state!
??It?s O.K. I do not need a will or a plan because I do not have much money.
??My estate is really simple. It?s no big deal, I do not really need one.
??I do not want to think about it ? eat, drink and be merry! Pass the hot dogs (or the wine, or whatever)!

I have come across many of these attitudes / misconceptions in many years of law practice ? except for the ?I do not want to think about it? group, who usually call once and never make an appointment, or of course who may never call in the first place!

However, all of these attitudes need some serious debunking. All are flawed and all portray a major lack of understanding of the estate planning process. Consider the following answers to each:

Will all of my money go to the state if I die without a will or trust

Rarely?. While it is much better to have your own wishes, dying without a will is not fatal (Ouch. I?m sorry about that pun). It is called dying ?intestate.? The states have enacted statutes that apportion an estate among classes of beneficiaries predesignated when there is no will. For example, the laws of intestacy in California Provide that when a person wants it without a his or her estate (his or her separate property or community property share) will be split 50% ? 50% between the children and the surviving spouse then living .

While the State of California can benefit from an estate, it is only the ?heir? of last resort. Property goes to the state when there are no known heirs at law (the transfer to a state?s treasury is called ?escheat?).

Therefore, failing to have a formal estate plan Involves both ?good news? and ?bad news.? The good news is that state Legislatures have provided a back up plan for those without wills estate. The bad news is that this state-sponsored estate plan is just that: It?s the state?s plan. It is not necessarily your plan, and it may be the opposite of what you want. Do I need an estate plan if I do not have much money?

Even if you do not have loads of cash or assets you should have a quiet will. Only then will you Ensure that your assets are Transferred according to your wishes. So, Thurs financial circumstances change. If you do not believe that you have much money at this time, that situation could change in the future.

If you have children you clearly need a will. The will is the common method of nominating a child?s guardian. Crazy Aunt Millie could very well raise your child in the event of your demise even if she is the last person you would want for the task. If you do not tell the court your wishes through a properly executed will, the court may Thurs exactly what you do not want. My estate is so simple. Do I really need to worry about all of this stuff?

Your estate may or may not be as simple as you think. Few estates involving real property assets are truly ?simple.? For example, if you own real property you would probably benefit immensely by having a trust. Probate filing fees and attorney?s fees can cost thousands of dollars -. Costs Which would probably be avoided should you place the assets into a trust

Often the ?simple? route is the expensive route

.

So, I have found that those who protest the most about the simplicity of their estate usually have very specific ideas concerning how they want their assets distributed. If you have very specific ideas about how your estate is to be apportioned, the intestacy statutes will not assist you

Bottom line:. You should consider discussing the issues of distribution with your attorney. After doing so you might discover that there is a real benefit to your estate planning in a more formal manner.

I do not want to think about it! Pass those hot dogs!

Estate planning conjures up a lot of emotions. And not all of those emotions are positive ? after all, planning for your own demise is tough! However, consider this: Planning your estate will not shorten or lengthen your life by a single moment. So why not think about it and do it?

In fact, once the task is done, there will almost always be an instant relief. After all, planning your estate is not necessarily for you. It is for those you leave behind. id=?article-resource?> located in the Los Angeles San Gabriel Valley, Larry Stratton is in a position to coach and advise you, and to help you plan for your future. The Law Offices of Larry D. Stratton [http://www.strattonplanning.com] Specializes in estate planning, business formation and appellate practice. Larry Stratton also blogs on estate and financial planning issues at Planner?s Thoughts

Larry Stratton is A graduate of Whittier College School of Law, Which is a member school of the ABA and the AALS. He has Represented Numerous clients in the California Court of Appeal, and is admitted to practice in all California courts, the Ninth Circuit Court of Appeal, and therefore the United States Supreme Court From 1983 to 1984, he was a member of the Whittier Law .. review

Larry Stratton is also a Registered Investment Advisor, and currently speaks on estate and financial planning topics in Southern California

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