How Disability May Look...
Let's talk about what happens if you become disabled without an estate plan.
What Is Disability?
A disability means that you’re physically or mentally unable to take care of yourself and make your own medical decisions. This may happen if you’re in a coma because of an accident, or develop dementia or Alzheimer’s.
Can Your Family Take Care Of You?
You might be thinking that your spouse and your children would be able to take care of you and manage your money if that happened. But even if they wanted to, they might not be allowed to. You see, the law sometimes acts as a double edged sword. They are set up to protect your private information and prevent bad people from taking advantage of you. But that means no one but you, not even your spouse, can access your private information and act on your behalf unless you give them permission to do so.
...Not Unless They Ask A Judge For Permission.
The law can prevent your own family from taking care of you or managing your money unless they go to court and ask the judge for permission to do so. This court proceeding is called a “conservatorship.” That’s right, someone you love will need to spend time and money in court just to be able to take care of you when you’re disabled.
The good news is, you can do something today to make it easy for the ones you trust to take care of you and manage your money so that you can live comfortably without the expense and headache of a conservatorship. The answer is by creating an estate plan.
How Death May Look...
So now that we’ve covered what you and your family could potentially go through if you become disabled without an estate plan, let’s talk about what would happen when something more serious occurs – when you pass away.
Your Family Will Have No Substitute For Your Income.
Before I dive into inheritances and who gets what, I want to focus on something more important. And that’s making sure your loved ones will be able to take care of themselves financially if something happened to you tomorrow. Without proper planning, your spouse might not be able to continue paying the mortgage without your income, forcing him or her to sell the family home. Also, your children might not be able to afford college, which may or may not be a bad thing given the lack of jobs for new college graduates these days.
Probate? No One Has Time Or Money For That...
And let’s not forget the court proceeding called probate. If you own a few things at the time of death, such as money in your bank account and real estate, your family will have to spend a lot of time and money in probate court just to collect those assets. The entire probate process can take a year or even two years if your family fights over who should get what.
Probate is very expensive. That’s because your family will need to hire a probate attorney and the court will appoint a personal representative to handle the probate proceedings. The fees for the probate attorney and personal representative are set by law and based on a percentage of the value of your assets. For example, if your assets are worth $1,000,000, then the attorney and the personal representative will each be entitled to receive $23,000. That’s a total of $46,000 plus other court fees that your family won’t be able to get from you. And the attorney’s fees will only increase if your family fights over your assets.
Inheritance? What Inheritance?
Also, you won’t be able to control who inherits your assets. If you don’t have an estate plan, the probate judge will decide who gets what with the help of California law. And a lot of times, California law doesn’t take into consideration your unique situation.
Imagine you have a child who has abandoned you and can’t stand to see your face. That child will receive just as much as your other child who adores you and takes care of you. What about the father who left you and your mom? He could receive as much as your mom who raised you all by herself. And what if you want some of your money to go to your boyfriend, your girlfriend, or your best friend, or that charity that you support? They'll get nothing under California law.
There Goes Your Money...
As for your adult children who stand to inherit your money, they’ll receive everything in one lump sum payment at the end of the probate proceedings. And they’ll be free to spend every cent of your money the day they receive it. That’s not good right?
Foster Care. Is That The Best Your Kids Deserve?
Most important, what’s going to happen to your little ones – your six-year-old girl or your 10-year-old son? Who’s going to raise your young kids if something happened to both you and your spouse at the same time? They might end up in foster care.
WANT TO LEARN MORE?
Now that I’ve introduced you to the problems you and your family will likely face if you become disabled or pass away without an estate plan, let me show you exactly how an estate plan can protect your family.
Are you excited to learn more? I can’t wait to show you.
See you in the future.
- Edmund, Los Angeles Wills & Trusts Lawyer