What is Estate Planning?

January 20, 2022

Estate planning involves an orderly strategy and your instructions of how to distribute your assets to your loved ones after your death and how to manage your assets in the event of your disability. Even though, any adult with sound of mind, has a right to dispose of his/her assets in any way he/she wishes (with the exception of disinheriting your spouse completely in California); However, if there is no estate plan done by the owner of assets during his/her lifetime, then the task of disposing the assets and distributions of those assets among the heirs (beneficiaries) become an arduous task of the court system (probate court proceedings). So if you wish to make your own decisions as to who should receive which of your assets or to what extent, you can accomplish that by creating an "estate plan."

What does an estate plan accomplish?

Complete control of your assets, not only during your lifetime when you are fully capable of making your own decisions, but also during your disability as well as after your death and the manner of distribution of your assets among your loved ones.

In short, you decide whom, when, how, how much, and by what limitations or conditions, your assets should be distributed to your loved ones, after your passing. Specifically, a well-designed estate plan should bring about the following advantages and benefits:

  • Identifying your personal and family goals and objectives;
  • Collecting all your assets in an organized and centralized manner inside your estate plan;
  • Creating and promoting family harmony;
  • Eliminate all unknown questions in your mind that keep you awake at night - all the "what ifs"; knowing that you have resolved them in a written, legal and enforceable manner;
  • Having a legacy not just assets, properties and wealth;
  • Control the manner in which your loved ones will use and enjoy your assets in the future;
  • Build in positive "incentives" for your loved ones to better their lives;
  • Protect your assets for your loved ones;
  • Divorce protection for your loved ones;
  • Be a positive example for the future generations!

What does my estate planning include?

As a U.S. Citizen, your estate includes anything and everything you own, in whatever form, anywhere, including all your real estate, businesses, your retirement accounts, all your bank accounts, all your life insurance policies, stocks, bonds, and mutual funds, your partnerships, personal tangible property, all debts owed to you, etc.

An "Estate Plan" generally includes:

  • Revocable Living Trust, which is usually the most basic of an estate plan. "Revocable" because you need to have the flexibility to change your mind about the decisions your currently make in your estate plan. You need to be able to "amend" your plan and/or revoke an earlier estate plan or create a brand new one in the future if you wish.
  • Will, is also needed in an estate plan. Certain objectives are accomplished in a Will such as appointment of Guardian for your children. The Will you need to have is in conjunction with your Revocable Living Trust; it is not a simple Will; rather, a special type of a Will that should be capable of "pouring" an asset that may have inadvertently been left out of your Living Trust, into your Trust, even after your passing. This would avoid the probate process altogether.
  • Disability Planning, is also a part of your estate planning. There are two types of disability in California: Financial Disability Planning and Medical/Health Disability Planning. In other words, if something happens to you (other than death that renders you or your spouse "incapacitated," who can make financial and medical decisions on your behalf while you are still alive?

An "Estate Plan" answers the following questions:

  • Who will have authority over your business affairs, financial institutions, your partnerships, or your legal entities, such as corporations, limited liability companies, or limited partnerships?
  • Who will have legal authority to obtain your medically protected confidential records and information during your incapacity and who can make medical decisions (including life support medical procedures and treatments) for you when you are incapacitated and unable to make those decisions for yourself?

Ultimately, estate planning is too important to put off any longer. Contact our office today at (310) 843-9292 for more information on how to get started!



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