Many people think that creating an estate plan only involves writing a last will. While this document can ensure that their assets can be passed down to their heirs upon their passing, there are other estate planning tools that individuals can utilize to enhance their legacy and wealth protection.
Transfer-on-death deeds
Under California law, homeowners who are aged 18 and above, and are mentally competent can create a transfer-on-death (TOD) deed for their real property. This legal tool ensures a seamless transfer of their property to their beneficiaries without the need for probate.
Since TOD deeds only take effect upon the owner’s death, they retain ownership and control of their properties during their lifetime. This means that their beneficiaries cannot sell or rent their property while they are still alive.
Living trust
Establishing a living trust, such as a revocable trust, can help individuals transfer ownership of their assets into a trust while having the flexibility to amend or revoke their document while they are still of sound mind.
Unlike a will that becomes public upon the owner’s death, the details of a trust remain private. Since the assets under a trust already have designated beneficiaries, their asset distribution process can proceed without probate.
Durable power of attorney
With a durable power of attorney, the owner or “principal” can appoint an agent who can represent them if they become incapacitated. Under the document’s legal authority, the agent has power to manage their finances or make health care decisions on their behalf.
For example, a durable financial power of attorney can give the agent access and control over the principal’s bank accounts, investments and financial transactions. They will also be responsible for their unpaid bills and their tax returns.
Since individuals have unique goals for the future, they can personalize their estate plan with a skilled lawyer who can help them make informed decisions and ensure that their documents align with their specific needs and lifestyle.