Estate Planning – Common Questions and Answers
What is Estate Planning? Depending on your situation, Estate Planning
can involve many different facets, including writing a will, avoiding
probate, arranging for care of minor children, saving on estate taxes or
preserving assets for children from a prior marriage. An Estate Plan
should be tailored to your unique needs.
Who Should Have an Estate Plan? The following types of people
should strongly consider putting together an Estate Plan: (1) owners of
any real property (especially those with real property in more than one
state); (2) parents with minor children (especially children with special
needs); (3) married persons with children from a prior marriage;
(4) married couples with estates (including life insurance proceeds)
exceeding $2 million; and (5) individuals with a serious illness.
What is Probate? It is a legal process that involves: (1) filing the
deceased person’s will with the Court and proving it to be valid,
(2) identifying, gathering and appraising the deceased person’s assets,
(3) paying off the deceased person’s debts and any estate tax due, and
(4) distributing what’s left in the deceased person’s estate according to
the will. A typical Probate takes up to a year or more and could cost a
considerable amount in Probate fees and costs.
What if there is No Will? Generally, if the deceased person did not
leave a Will (or if it is proved invalid) and the deceased person did not
leave property another way, like through a Living Trust or joint tenancy,
the estate must still go through Probate. In this case, the Court would
divide the property according to California’s intestate succession laws.
What is a Living Trust? A Living Trust (also known as a Revocable
Trust) is a legal entity you create and that you will transfer some or most
of your property into. You remain in control over all your property while
you are alive, and at your death, it will pass on to your designated
beneficiaries. A Living Trust is often at the heart of a good Estate Plan
and is one of the most common mechanisms used to avoid Probate.
What Methods are Available to Avoid Probate? The following are the
most common methods used to avoid probate: (1) Living Trust, (2) Joint
Tenancy, (3) Community Property with Right of Survivorship, (4) “Pay-On-
Death” Designations (used for bank accounts and stock accounts), and
(5) Beneficiary Designations (used for life insurance and retirement
accounts). There are distinct advantages and disadvantages with each
method, and thus, it is recommended that you consult with an estate
planning professional to discuss your overall situation and particular
needs.
What is Estate Planning? Depending on your situation, Estate Planning
can involve many different facets, including writing a will, avoiding
probate, arranging for care of minor children, saving on estate taxes or
preserving assets for children from a prior marriage. An Estate Plan
should be tailored to your unique needs.
Who Should Have an Estate Plan? The following types of people
should strongly consider putting together an Estate Plan: (1) owners of
any real property (especially those with real property in more than one
state); (2) parents with minor children (especially children with special
needs); (3) married persons with children from a prior marriage;
(4) married couples with estates (including life insurance proceeds)
exceeding $2 million; and (5) individuals with a serious illness.
What is Probate? It is a legal process that involves: (1) filing the
deceased person’s will with the Court and proving it to be valid,
(2) identifying, gathering and appraising the deceased person’s assets,
(3) paying off the deceased person’s debts and any estate tax due, and
(4) distributing what’s left in the deceased person’s estate according to
the will. A typical Probate takes up to a year or more and could cost a
considerable amount in Probate fees and costs.
What if there is No Will? Generally, if the deceased person did not
leave a Will (or if it is proved invalid) and the deceased person did not
leave property another way, like through a Living Trust or joint tenancy,
the estate must still go through Probate. In this case, the Court would
divide the property according to California’s intestate succession laws.
What is a Living Trust? A Living Trust (also known as a Revocable
Trust) is a legal entity you create and that you will transfer some or most
of your property into. You remain in control over all your property while
you are alive, and at your death, it will pass on to your designated
beneficiaries. A Living Trust is often at the heart of a good Estate Plan
and is one of the most common mechanisms used to avoid Probate.
What Methods are Available to Avoid Probate? The following are the
most common methods used to avoid probate: (1) Living Trust, (2) Joint
Tenancy, (3) Community Property with Right of Survivorship, (4) “Pay-On-
Death” Designations (used for bank accounts and stock accounts), and
(5) Beneficiary Designations (used for life insurance and retirement
accounts). There are distinct advantages and disadvantages with each
method, and thus, it is recommended that you consult with an estate
planning professional to discuss your overall situation and particular
needs.