Regardless of your income, estate planning provides peace of mind by ensuring your wishes are known and that your loved ones are protected no matter what the future holds. The Goralka Law Firm provides personalized estate planning services for clients facing a wide range of circumstances—including parents of young children, blended families, small business owners, and even home owners.
Basic Estate Planning Documents
In its simplest form, an estate plan should include the following documents:
- Will. Your will outlines the distribution of your assets, including items with primarily sentimental value, and chooses someone to serve as the executor of your estate. If you are a parent with minor children, it also lets you name a guardian who can care for them in the event of your death.
- Durable financial power of attorney. If you become ill or injured, this document gives a person the authority to manage your finances. This includes making deposits, paying bills, filing taxes, and managing investments.
- California advance directive. This document combines the living will and durable power of attorney for healthcare. It gives a person the ability to make medical decisions on your behalf and specifies what type of care you wish to receive in an emergency situation.
Using Trusts to Support Estate Planning Goals
A trust is a type of fiduciary arrangement that holds assets on behalf of a beneficiary or beneficiaries. A trust does not take the place of a will, but it can be used to accomplish specific estate planning goals.
Some of the different types of trusts that may be recommended for your estate plan include:
- Revocable living trust. A revocable trust allows you to avoid probate and its related fees, delays, and lack of personal privacy. A trust is useful for those who are self-employed because it can help the business continue to operate in the event of their death or incapacity.
- Beneficiary Controlled Trust. A Beneficiary Controlled Trust can provide the beneficiary the ability to enjoy, control, and manage the inheritance with greater protection from lawsuits, divorce, creditor claims, and estate tax
- IRA inheritance trust. A standalone trust for IRA assets lets the IRA owner and their family enjoy maximum "stretch out" to reduce taxes while providing important asset protection benefits at the same time. It is particularly useful for beneficiaries who are minors, have special medical needs, have developmental disabilities, have troubled marriages, or have high-risk professions where liability is a concern.
- Asset protection trust. When used with limited liability entities such as corporations, limited partnerships, or limited liability companies, asset protection trusts provide greater protection for your personal assets, so they aren't jeopardized by business debts.
- Life insurance trust. Transferring a life insurance policy into an irrevocable trust means that the insurance proceeds are no longer included in the gross estate. The proceeds can then pass to beneficiaries with no estate tax.
- Qualified personal residence trust. This trust can transfer your residence (and future appreciation) to your children to obtain a reduction in potential estate tax. In this type of trust, the owner of the residence can remain on the property for a predetermined period of time with "retained interest" in the house before the interest remaining is transferred to the stated beneficiaries as "remainder interest."
- Medi-Cal protection trust. Medi-Cal is California's version of Medicaid and is typically used to pay for nursing home costs. An irrevocable Medi-Cal protection trust can be used to protect the family home from a Medi-Cal recovery lien.
The Goralka Law Firm provides specialized planning for high-net-worth clients. Our team will work with you to create a master wealth plan that maps out in detail potential lifetime planning vehicles to help you leave a lasting legacy for future generations while reducing applicable gift and estate taxes. Laureate planning services are recommended for clients with a net worth of $10 million or more. This planning will have increased importance if the proposed changes to the income and estate tax system are enacted.
Get Started Today
The earlier you begin the estate planning process, the more options you'll have for protecting your assets, reducing tax liability, and leaving a meaningful legacy for your loved ones. Contact us today to discuss how we can assist with your estate planning needs.