Few people want to leave their heirs with a paperwork disaster, but that’s what happens when there’s no estate plan. According to the article “The importance of creating an estate road map for your heirs” from Grand Rapids Business Journal, an estate plan usually involves a will, a durable power of attorney for financial decisions, a health care directive for medical decisions, and often, a trust.

An estate plan also involves making sure assets are titled correctly and beneficiary designations for assets are coordinated with these documents, so assets pass to the people of your choosing in an efficient manner.

It’s always better if this information is gathered together and put in a location that is known to trusted family members.

Another step to consider is leaving a personalized letter of instructions to your spouse or other family members. The letter can be used to explain why you distributed your assets the way you did or guide them on what you’d like them to do with your estate regarding the assets. This is not a legally enforceable document, but it may provide your family members with a level of understanding not otherwise explained in your will.

For most people, retirement accounts, real estate, bank and investment accounts, cars and maybe pensions are the total sum of their estate. If your estate is larger or more complex, i.e., you own a business or a large real estate portfolio, your estate plan may be more complex.

Step-by-step instructions regarding each asset may be helpful for your heirs, including contact information for each asset. They will also find it helpful to have a list of your professional team: your estate planning attorney, financial advisor and accountant.

For certain accounts, instructions may need to be very specific. For a retirement plan, if your spouse survives you, they’ll need to know about rolling the funds into an inherited spousal IRA and naming beneficiaries. Your estate planning attorney can help your surviving spouse avoid any expensive mistakes.

If you own a business, there will be need for more guidance. A succession plan should be set up long in advance of your retirement, so that family members who are active in the business will be able to see it continue, if that is your goal. If the family does not want to run the business, they’ll need to know who to contact to ensure that it maintains its value after your passing, so it can be sold for a healthy profit.

Attorneys and accountants will definitely be able to help your family after your passing, but if you own a business, you know it better than anyone else. Just as you have a business plan for various contingencies, you need to have a plan in the event of your untimely passing. This is lacking for many family-owned businesses, and it often does not end well for the family or the business.

The more detailed the directions you can leave for your family, the better off everyone will be. Having a good estate plan is an act of great kindness to those you love.

One of the main goals of our law practice is to help families like your plan for safe, problem free, and successful transfer of assets to the next generation.  Call our office today to schedule a time for us to review your estate plan and identify the best strategies for you and your family to ensure your legacy of love and financial security.  Our office is located in Santa Ana, CA but we serve all of California including Irvine, Orange, Tustin, Newport Beach, and Anaheim.

For more information and articles on estate planning, probate, trust law, and business planning, please visit our website and subscribe to our monthly e-newsletter.

Reference: Grand Rapids Business Journal (October 31, 2019) “The importance of creating an estate road map for your heirs”