The prospect of death is frightening, but without planning, the following disputes will be even worse. Nobody wants their heirs to fight over some property and weaken their ties after they pass away. To avoid this potential threat, it is best to do some estate planning beforehand.
Unfortunately, 68% of people in America don’t have any will and die intestate. If you die without a will in California, the “intestate succession” laws are applicable, under which your assets will be divided among your relatives. While such laws try to ensure everyone gets their right, it is better to die with a will.
There is no denying that estate planning can be a hassle, but the peace of mind this will bring is worth the effort.
With an estate plan in place, you can control who monitors the distribution and decide who gets what and when the distribution will be done.
Here is how you can take some important steps to make sure your assets are divided justly:
1. Write a comprehensive will
The best asset division is one you do yourself; while in the absence of a will, the state law will still divide your property among your heirs as justly as possible, only you know who truly deserves what share in your assets.
Writing a will also allows you to name a guardian for any minor children and assign a trustworthy executor.
Also, intestacy laws completely exclude any friends, non-marital partners, stepchildren friends, or charities you might have intended to give to.
When you draft a will, remember that assets divided according to the will would undergo a probate process.
To understand this process better, you can consult this guide to probate in California. In general, probate is a court-supervised process that permits anyone from the creditors to challenge the will and demand proper distribution.
After legal validation, the executor is granted probate, or the right to deal with the assets as per the deceased’s will.
Make sure your will is comprehensive and has every detail – including any trust funds you intend to establish and any charities you wish to grant – and names an executor to execute your will.
2. Communicate with your heirs
Communicating your will with your heirs is necessary; discuss the rationale for your decisions as clearly as possible so there are no conflicts after your death.
While a will does give you the right to provide one heir more than the other, it is best to be fair in the division, lest there be any conflict in the future.
If your division isn’t equal, you must communicate the rationale behind it with them in advance. It is best to discuss what you intend to write in your will with your heirs and ensure everyone is okay with it before you finalize the document.
3. Don’t forget to include non-physical assets
Before you draft your will, you must list your assets; carefully review everything you own, from jewelry and vehicles to your television set.
Also, remember that there is more to your estate than just your tangible assets. Your intangible assets are as important; this includes things you own on paper or will likely get in the future.
For instance, your brokerage accounts, bank accounts, disability or health insurance, and life insurance policies count as intangible assets.
When listing down your non-physical assets, list all the account numbers, name the firms holding any intangible assets, and note down their contact numbers.
4. Consider taking help from the professionals
It is important that your will is legally sound and that whatever you intend is rightly worded and communicated accurately. You can consult a professional will-writing service if you are not confident in writing a will.
You can call a financial advisor and an attorney to discuss how you intend to divide the estate among your heirs and get help making a comprehensive plan.
The financial planner will help you throughout the process until it is time to execute the will. They will assist you in designing a plan that aligns with your wishes.
An estate planning attorney can help you create the legal documents you would need for your estate plan and discuss state tax laws that apply.
5. Select a reliable executor
The executor is the person who will manage the execution of your will after your demise, handle the probate, collect assets, pay off debts, and oversee the distribution of property as per the will. In short, this will be your representative.
Therefore, you must select someone trustworthy, reliable, dependable, honest, and conscientious. It is also important that the executor is mature and can make peace if the need arises.
The executor must invest much time and energy in listing banks, accounts, brokerage, court visits, and more. Make sure that the executor you select is willing to do this and knows the responsibility that comes with it.
6. Review your estate plan regularly
Your job doesn’t end when you have drafted a comprehensive will have put it away to collect dust for the years to come. You must make sure it is as updated as can be when the time for execution does come.
With time, things change, even the condition of your estate; to ensure that everything in your ownership is dealt with and that your will truly reflects your wishes, you must keep updating it at least every 3-5 years. It is all the more important when some major life change happens
Over time your beneficiaries list might modify because of changes like marriage, divorce, the birth of grandchildren, etc. Similarly, laws that govern wills and estates might change with time. This is a crucial step to ensure that your loved ones stay protected and that the distribution of assets is as just as possible.
Asset division following your demise is a nerve-wracking duty that many realize only as death approaches. However, life is unpredictable, and you are never too young to write a will.
To ensure that your assets are divided justly after passing, write a comprehensive will, communicate this to your heirs, include everything, even the intangibles, select a reliable executor, consult professionals, and review your will regularly.
Make the right choices today so that your heirs can live in peace in the future.