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Estate Planning

What Is Estate Planning?

At its most basic level, estate planning is deciding who you want to receive your ‘stuff’ when you pass away. Stuff includes things like your personal property (your antiques, your clothes, your house) as well as your bank accounts, stocks, bonds and other investments. The documents you need in your estate plan depend largely on your family situation, your stuff and exactly what you want to happen to all this ‘stuff.’ Estate planning can be as straightforward or as complex as you like. A good estate plan will make sure that the right people get the right ‘stuff’ at the least cost and in the fastest way possible.

I Don’t Consider Myself Wealthy. Do I Need Estate Planning?

Everyone should have some sort of estate plan. Not everyone needs a complex estate plan though. If you don’t own real estate, don’t have children, and the value of your ‘stuff’ is less than $150,000, you likely don’t need a living trust. But everyone who owns stuff should at least have a will, a Power of Attorney, and a Living Will (also called an Advanced Health Care Directive).

If you have a lot of ‘stuff’, have a blended family, have children or own real estate, you will want to have a complete estate plan that deals with all your stuff and takes into account how to transfer your stuff to whomever you want in the fastest and least costly way possible.

Why Is Estate Planning Important?

Estate planning helps you protect your stuff, pass that stuff to whomever you want, and helps to lessen any chance of arguments about your stuff. In other words, it helps you to:

  • Provide for your heirs
  • Protect your assets
  • Avoid family disputes
  • Gain peace of mind

What makes up a complete estate plan?

A complete estate plan normally includes:

What Does The Estate Planning Process Include?

The estate planning process is straightforward. The first step is a meeting with you to discuss you, your family situation, your stuff and what thoughts you have about whom you want to give your stuff to and under what conditions. At the end of the first meeting, you will have an idea of which estate planning documents you will likely need as well as our cost for helping you through the process.

Once you have signed a fee agreement, we will send you a form that you can fill out either by hand or on your computer to provide us with all the information we need. When we get the form from you, we will create a first draft of your estate plan.

We will send you a draft of your estate plan for you to review, highlighting specific sections that need your attention and a close reading. Don’t worry, we will help you through this!

Once you have reviewed the draft of your estate plan, we will set up a meeting with you so that we can sign the documents, notarize everything and begin the process of funding your trust.

Once My Estate Plan Is Completed, Am I Done?

Signing and notarizing your estate plan is not the last step. If you have created a living trust, you need to transfer your stuff into this trust while you are living. This is usually not a very difficult process but one that routinely gets left hanging. Unlike other firms, our flat fee service to create your estate plan INCLUDES our full assistance in transferring your stuff to your living trust.

Where should I store my estate planning documents?

It’s important to know where your original, fully signed and notarized estate plan is. It’s also important to let someone close to you know where you have stored it and how they can access it if needed. A safe deposit box at the bank is one option. You can keep your estate plan at home in a fireproof safe, too. Just remember – the original is what’s most important.

Should My Life Insurance Policy Name My Trust As The Beneficiary?

For most people, your life insurance policy can directly name a person or multiple people to receive the benefits. That doesn’t mean you can’t name your living trust as a beneficiary. If this is something you want to do, you should discuss it with us so that we can make sure that the right wording is in your trust so that signals don’t get crossed. We want to make sure your entire estate plan and all the other stuff you have is all moving together in the same direction so there are no hiccups or confusions later.

What Is Probate?

You can find many different explanations and legal descriptions of what probate is. There is a simple way to think about the probate process. Let’s say your best friend has $2 million she wants to leave you when she’s gone. The $2 million is in the form of a house, a bank checking account, Apple stock and a car. All of these things were in your friend’s name. You know your friend wanted to leave it to you because she had a valid will that said so. How do you get all this stuff into your name? Probate.

The probate process is basically the court supervising the valuation of all your stuff, determining what you owed when you died, and then deciding who gets what. It’s a lengthy process and quite expensive. It’s best to avoid this process if at all possible. We can help you do that.

Will My Beneficiaries Have To Pay Estate Tax?

Estate tax is a tax that is levied on people who’s stuff is worth more than $5.43 million (for 2015). For a married couple, estate tax applies if the total estate (all their stuff) is worth more than $10.86 million (for 2015). These amounts change every year. And you never know what can happen with the estate tax limits because California sets its estate tax limits to match the federal limits. So if the federal estate tax limit changes, so will California’s. For most families, estate tax isn’t much of an issue. However, for the families who have a larger estate, it’s important to plan for estate tax considerations so that your beneficiaries aren’t caught unaware of this potentially big tax bill.

Will My Beneficiaries Have To Pay An Inheritance Tax?

Inheritance tax is a tax that is charged to those who receive your stuff after you pass away. There are only six states that currently impose an inheritance tax. California is not one of these states. However if you own property in one of the six inheritance tax states or lived in one of those six states at the time of your death, your beneficiaries will likely get a tax bill or at least have to file a return of some sort.

Why Shouldn’t I Just Do My Estate Plan Myself?

There are a lot of resources available to you online and through do-it-yourself websites, software and books. Many of these can be used at a very low cost, often a fraction of what an attorney’s legal fees would be. But beware the pitfalls of a do-it-yourself approach to estate planning.

First and foremost, any errors or inadvertent oversights will likely not be spotted until it’s too late. Because no matter how you do your estate plan – through a qualified lawyer or through a website – it can’t be changed once you’re gone. So you’re stuck with whatever is written on the form you filled in online.

More importantly, if you want to make sure that your assets are going to get to your family or friends or favorite charity with the least amount of hassle, an attorney can advise you on how best to do that with the least delay and lowest cost to your beneficiaries. There are complex laws in the state of California that apply to how you can distribute your stuff, especially if you are married. An attorney can tell you what works and what doesn’t work.

If you have minor children or family conflict of any kind, an attorney can help you plan to address your concerns before problems start.

There are many reasons why a qualified attorney is your best option. Find one you trust and like, someone who doesn’t talk down to you and makes you feel comfortable, and answers all your questions. Come and talk to us today!

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