+ Who needs an estate plan?

Anyone over the age of 18. Even if you have zero assets, everyone can benefit from having a power of attorney and health care directives. Having no plan at all is also a plan. If you do nothing, your family will have to go through at least 12 months of probate and it will cost them at minimum 6% of the value of your estate. Small estates can be handled with focused care, and in the case of large estates, planning can reduce costs and ensure debts are carried out without mishandling. Without estate planning, a judge will appoint someone to handle your estate who may or may not be prepared to handle it correctly.

+ What is an estate plan?

An estate plan is a gift to the people you love the most. It provides security for your loved ones and gives you the certainty that your property will be passed on the way you want it to be. Generally, an estate plan will be comprised of a will, trust, powers of attorney, and medical directives.

Estate planning addresses how your assets are managed and who will manage them if you are unable to manage them yourself. It can also determine the circumstances under which to distribute your assets, as well as how and to whom they are distributed. Estate planning can also help in managing how your health care decisions are made and who makes them in situations where you cannot do so yourself.

+ What is a trust?

A trust is a legal document that acts much like a will by documenting how you want your affairs handled after you pass away. Trusts are placed in the control of a person or entity, known as a "trustee," who is in charge of handling the property according to your wishes. Please note, there are various types of trusts, each of which has its own requirements and benefits.

+ What powers does a trustee have?

A trustee will have the duties designated in the trust, as well as statutory duties that are required by law. There are several statutory duties applicable to trustees to ensure that they are carrying out the trust in the manner you wish.

+ What can be used to fund a trust?

Trusts can be funded by cash, vehicles, stock portfolios, investments, real estate, and valuable family heirlooms.

+ What is a power of attorney?

A power of attorney is a legal document that grants one person the authority to make decisions on someone else’s behalf. The extent of that authority can be defined within the document. A power of attorney can be used to allow someone to do things like make decisions on your behalf regarding medical care or end-of-life care, manage your finances in the event that you are incapacitated, sign a document on your behalf, manage property or sell real estate on your behalf, and collect debts or handle business transactions on your behalf.

+ What is a will?

A will is a legal document that names executors, guardians, and individuals who receive your assets. Though some assets are exempt, the majority of assets may be subject to the conditions you lay out in a will. Exemptions such as co-owned assets would pass directly to surviving co-owners and beneficiaries regardless of will instructions.

+ What happens if you die without a will?

When a person passes without a will or will substitute, their entire estate must pass through the probate process. The lack of a will requires a decedent's estate to be distributed according to the intestacy statutes rather than being distributed according to their wishes.

+ What is probate?

Probate is the court process of determining the rights and obligations of a person's legal matters and finances after they die, including debt resolution and the clearing of titles. This must all be accomplished before a single relative or heir can receive any part of the decedent's property. This process can be avoided with proper estate planning.

+ How long is the probate process?

The length of the probate process depends upon the complexity of the estate. One must take into account the required periods of time, such as a four-month creditor's claims period, as well as the availability of court dates, and any other problems that may arise along the way. In California, probate can take up to 12-24 months.

+ Are there other ways to leave property besides a will?

Certain kinds of assets can be transferred directly to named beneficiaries by other means. These can be handled by living trusts and other alternative legal documents and procedures. Some of the assets eligible for transfer include:

• Life insurance benefits
• Pay on death assets
• Retirement plans, including IRA and 401(k)
• Trustee bank accounts
• Transfer on death securities accounts

+ What if I am unable to take care of myself?

Estate planning can account for situations where individuals are no longer able to take care of themselves and make decisions without assistance. For these circumstances, documents like power of attorney allow you to give another person the right and authority to act on your behalf. You may limit authority to special circumstances or expand as generally as you like.

+ Will I have to pay an estate tax or death tax?

Currently, California does not have an estate tax. Residents are, however, subject to the federal estate tax. Though the federal estate tax exemption fluctuates frequently, the current exemption is $11.4 million for individuals and $22.8 million for married couples. If your estate is worth anywhere near this amount, it is worth investing in estate tax planning services to maximize your tax shelter from transfer taxes.

+ What is the difference between a conservatorship and a guardianship?

California distinguishes between conservatorship and guardianship. Guardianship involves minor children, while conservatorship involves a disabled or incapacitated adult. A legal guardian has the right and responsibility to care for a child as a parent would – they assume both legal and physical custody. In a conservatorship, an adult can be named the conservator of another adult who cannot care for themselves or manage their finances alone.

+ How often should I update my estate plan?

It is a good idea to review your estate plan every three to five years. We recommend sitting down with your estate planning attorney and discussing any life changes you have experienced since last updating your documents. Amend your estate plan any time you undergo a major life experience, such as marriage, divorce, or the birth of a child. If you need to make any changes, you can file a codicil to your will, which replaces clauses in your existing will with new ones.