Estate Law 101: Estate Planning Basics

When you hear the term “estate planning” thoughts of sprawling estates with lush gardens and water features come to mind. But that isn’t at all a reality. The reality is, you don’t have to have to be a millionaire to need estate planning legal services

So what is an estate and what is estate planning? An estate is defined by any money, property, and assets that a particular person owns, especially at the time of death. Estate planning entails legally protecting your assets in the event something happens to you. Whether you pass away or become incapacitated, it is wise to have your estate in order and your beneficiaries clearly listed. 

An estate plan is designed to afford continued financial flexibility and protections to the individual prior to death, but also functions to preserve their wealth until it is dispersed to the intended beneficiaries. This includes the overarching goal to ensure that any heirs or recipients receive assets in a way that minimizes the future burden of estate taxes, gift taxes, and income taxes. 

If you think you are in need of a Los Angeles estate planning attorney to help you navigate the complicated waters of creating a legally binding estate plan, trust, or will, you’ve come to the right place. Let’s go over estate planning basics and why understanding them is so important for your family’s future, no matter how healthy or wealthy you may be.  

Estate Law 101: Estate Planning Basics

We’re here to give you an overview of estate planning basics so you can better understand what is in an estate and what needs to be covered in your estate plan before hiring a lawyer. After all, knowledge is power, and when you create a comprehensive estate plan you’ll want to make sure you leave nothing on the table. 

1. Take an Inventory of All Assets 

Estate planning includes both tangible and intangible assets. You may be surprised how wealthy you truly are if you simply know what to look for.

Tangible assets that may be included in an estate plan:
  • Homes, property, land, real estate 
  • All motorized vehicles. Which include cars, boats, motorcycles, scooters, etc.  
  • Any collectibles like art, coins, antiques, paintings, baseball cards 
  • Any personal possessions or keepsakes, including heirlooms and jewelry
 Intangible assets that may be included in an estate plan:
  • All checking, savings, deposit accounts, business accounts  
  • Stocks, bonds, crypto accounts, and mutual funds 
  • Retirement accounts, such as 401k plans, and retirement savings accounts
  • Life insurance policies
  • Health savings accounts

Once you’ve completed taking an inventory of all tangible and intangible assets, you’ll need to get a reasonable estimate of their individual and collective value. Include recent appraisals of property or valuable items like jewelry, collectibles, and artwork. 

Remember that some items may hold more sentimental value rather than monetary value. Consider what family members would value them the most before outlining the items and terms of ownership in your estate plan. This will ensure that certain possessions are being allocated evenly and fairly to the people you love.  

 2. Take Into Account Your Family’s Needs and How to Protect Them

Now that you have a detailed overview of what is in your estate, it’s time to think about how to protect your family after your passing or if you become incapacitated. 

  • Life Insurance Policies – When it comes to your life insurance policy, you may be surprised to learn that the amount of life insurance you require depends on a number of factors. These factors include current marital status and whether or not it requires dual incomes. Life Insurance can become even more important if there are children in need, children or next of kin that have disabilities, and even college tuition bills due in the future. 
  • Guardianship – If you want to make sure that your loved ones are cared for after death, it’s a good idea to establish guardianship if minors or an elderly relative is involved. You can choose the person who will watch over them and look out for their best interests in life. This may help your living family avoid going through costly family court hearings that could deplete your estates’ assets.

3. Establish Firm Legal Directives

A very important element of estate planning basics and any comprehensive estate plan should always include detailed legal directives. 

  • Irrevocable or Revocable Trust – Having a living trust established is a great way to control your assets and avoid probate court. It takes a seasoned professional, however, to ensure your living trust is airtight and in full compliance with the latest legal standards. An experienced Los Angeles trust attorney can help you create a legally binding living trust to designate certain assets and monies to be allocated to individual beneficiaries at the time of death or being incapacitated. Remember that when creating an irrevocable trust, it cannot be altered, changed, or revoked even by its creator.
  • Living Will And Medical Care Directive – Few people know that a living will and medical care directive are essentially the same things. These documents outline what kind of medical treatment you wish to receive if you become incapacitated and are unable to be your own advocate. This way, our families can make sure that all wishes related to medically necessary treatments are carried out properly without any hassle or worry.
  • Durable Power of Attorney – When you’re unable to make decisions about your finances and assets, a durable financial power of attorney can provide the means for someone else, like a trusted friend or family member, to act on those wishes and outlined preferences. This legal document gives them access and control over all aspects of your finances and any related activity in situations when you are unable to. It may include duties such as paying taxes, managing assets, and paying bills.
  • Limited Power of Attorney – If the thought of handing over power to one omnipotent entity or person isn’t in line with your wishes, you can choose to implement a limited power of attorney. Power of attorney is a very serious matter and should be taken seriously. As the name suggests, limited power of attorney imposes limits on the powers of the person you named to control important financial decisions in your absence.

 4. List Your Beneficiaries

Accurately listing your beneficiaries is a vital part of crafting a rock-solid estate plan. Although your last will and testament may outline your wishes for medical care and disbursement of assets, it needs to be even more detailed.  

  • Retirement and Life Insurance Accounts – It’s important to check your retirement and insurance accounts as they likely have beneficiaries already listed in those documents and can potentially legally outweigh your will. These designations should be updated accordingly with each passing year, or at least every decade as needed.
  • Double Check For Forgotten Beneficiaries – Over the years, it may be easy to forget the people who are named on your policies and accounts. Make sure they’re still beneficiaries or have been taken off policies due to divorce or a break-up. If, for example, one person was designated as beneficiary when he or she got married but now has remarried, they should be taken off your estate, living will, and/or removed as power of attorney. 
  • Never Leave Beneficiaries Section Blank – If this section is somehow left blank, the state will decide how to distribute your assets and wealth based on state law. A good rule of thumb is to not just name primary beneficiaries but name contingent beneficiaries, or backup beneficiaries. 

5. Always Plan to Reassess Your Estate Plan

Life happens, plans change, the people in our lives change. And so should your estate plan when life takes unexpected turns. That isn’t to say that you should up and change your estate plan on a whim. But in the event of divorce, change in relationship status, or a new family member like a baby enters the picture, make sure you reassess your estate plan on a yearly basis so you and your loved ones are financially protected if the unexpected happens.


At OakTree Law, our Los Angeles estate planning attorneys will assess your unique financial situation and determine the best course of action to protect your assets in the event of your untimely passing. We fully understand the complexities of estate planning and the most current laws and regulations. Request a free evaluation online or call 888-348-2609 to get started.