There are a few estate planning misconceptions about which our California readers should be aware. One belief is that estate planning is only for wealthy people. The truth is that any homeowner could probably benefit from estate planning. Another misconception is that estate planning only takes care of events after you die. That is also not quite accurate because health care directives and long-term care planning would take effect prior to one’s death.
There is another estate planning tool which begins working before a person’s death. That is a revocable trust. Simply put, a revocable trust will state what you want done with your assets, such as your home, after your death. It is revocable because you can change, or revoke, it any time prior to your death. After your death it is irrevocable.
There are four main types of revocable trusts you may wish to consider.
- Legacy provisions: If you would like something to remain in the family in perpetuity, such as the family lake home or other property, you could use this type of trust.
- Specific bequests: If you want to give your home to your spouse, your classic car to your daughter and your fishing boat to your son, you can do that.
- Charitable intentions: Give it away now, or give it away later, as the name implies.
- Option provisions: If you want to leave the home to the family, you could give the first option to your spouse and if your spouse doesn’t want it, the home to go to your eldest child and if that child doesn’t want it the home could go to the next eldest child and so on.
With any estate plan one should be well informed and take all financial, taxation and other matters into consideration.
Source: ” U.S. News & World Report, “4 Ways to Include a Home in Your Estate Plans,” Philip Moeller, Aug. 14, 2012
Our Los Angeles law firm represents individuals with a full range of estate planning needs including wills and trusts, including revocable trusts such as those mentioned in this posting.
