ESTATE PLANNING FAQ

What is Probate?

Probate is the legal process of validating a Will, and passing title to your property to your designated beneficiaries. Probate is Court supervised, can be complex, costly and take up to two years to complete. Probate should be avoided.

What is a Will?

A Will is a legal document that specifically addresses the distribution of your assets upon your demise. If you do not have a Will, the State of California will dictate the distribution of your estate and assets, and to whom. The administration of a Will must go through the Court process of Probate. A Will can be amended, modified or revoked during your lifetime.

Do I need a Will?

At the very minimum, everyone should have a Will, so as to express your intentions upon your death, both as to your assets and your wishes after death. If your estate exceeds $150,000.00, you really should have a Will. Few exceptions include assets held in joint tenancy or ownership. Where there is a Will, there is your way!

Should I have a Trust?

If you own real property in your individual name, a trust is a must. Trusts are long term arrangements or contracts wherein you designate a Successor Trustee to hold, manage and distribute your assets after your death. Trusts are generally not subject to Court supervision, and avoid the necessity of Probate.

What if I have Minor Children?

An appointment of a Guardian over your minor children is essential in the event of your death. Proper arrangements should be made to care for your minor children’s person and estate. A properly prepared Estate Plan will address these issues. Guardians must be approved by the Probate Court. 

Do I need a Power of Attorney?

Powers of Attorney for Health Care and Asset Management are critical. If you become incapacitated in any way, your named fiduciary will be able to assist you in making financial decisions, as well as health care decisions. In the event a conservator is required, you are able to pre-designate your fiduciary, who will act on your behalf. The holder of a Power of Attorney is bound by law to act only for your best interests.

How should I hold Title to Real Property?

Once your Trust is set up, title to your real property is transferred into the name of your Trust. Doing so will avoid Probate, and ensure that a married couple will reduce, if not eliminate, any potential capital gain taxes upon the death of one spouse. Property held in joint tenancy will pass to the surviving joint tenant upon your death, but may not qualify for elimination of capital gain taxes if the surviving spouse wants to sell the property. A Trust can eliminate this taxation.

Should I transfer IRAs and 401ks into my Trust?

The simple answer in most cases is no. An IRA or 401k has a designated beneficiary, and upon your death those accounts and monies will be distributed to the named beneficiary. A surviving spouse can "roll over" an IRA or 401k into his or her own account, and continue with the investment and benefits afforded to surviving spouses.

What about Life Insurance and Annuities?

Life Insurance Policies and Annuities have designated beneficiaries as well. Upon your demise, your Life Insurance is paid to the named beneficiary, and passes outside of your estate.

What about my Personal Property?

The distribution of Personal Property that does not have a formal title of ownership, can be accomplished by a General Assignment of Assets, and a written directive to your Successor Trustee to take effect upon your demise. If you have personal property, jewelry, collections, fine art, paintings or other similar assets, a proper beneficiary designation will avoid sibling rivalries, family divisions and needless squabbles. Remember that free money and assets make relatives and family members behave in ways you never thought possible.

Not having an Estate Plan in place prior to your death is costly for your heirs and involves a great amount of time, delay and Court supervision. This places a great burden on your loved ones. Some of the famous people who died without a Will or Estate Plan include:

  1. Abraham Lincoln

  2. Martin Luther King, Jr.

  3. Howard Hughes

  4. Bob Marley

  5. Jimi Hendrix

  6. Prince

Contact us today for your free estate analysis to determine what plan is best for you, your family and your assets. Please keep in mind that we all have a 100% mortality rate, and proper planning now will prevent issues and problems from arising after you are gone. A proper Estate Plan is not only the responsible thing to do, but necessary in the world we live in. Call me today. I will personally take your call and answer your questions.