Estate planning is for everyone. From simple wills and powers of attorney to living trusts and estate plans, the choice is yours, but estate planning is essential and not “one size fits all”. Every person is different, every life situation is different. The reality is, we all have an estate plan, the State of California’s or one that you create and control.
For those who do not create their own estate plan, the State of California has one in place for you. It’s called probate and generally, if your gross assets exceed $166,250, your estate will be subject to probate. Probate is a legal process overseen by the probate court that allows for the distribution of your property upon your death whether you have a will or not.
If you have a valid will in place, the court will oversee the distribution of property according to the terms that you have identified in your will. If you don’t have a will, the court will oversee the distribution of your property under the terms of the California Probate Code. Either way, probate is a long, expensive and public process.
An excellent option for many is a revocable living trust as part of their overall estate plan. A revocable living trust shortens the time it takes to distribute your property by months and often years at much less than the cost of probate. The distribution of your assets through a revocable living trust remains private rather than opening the terms to public scrutiny.
During your lifetime (and while you have capacity), your revocable living trust can be revoked or amended whenever you change your mind, or if your personal life situation changes. Further, proper estate planning can defer or even eliminate taxes for your family and loved ones – another plus! Proper estate plans also utilize durable powers of attorney for financial affairs and health care considerations.
Durable Powers of Attorney for Financial Affairs and Advance Health Care Directives allow you to name agents to act on your behalf, under terms identified by you, should you not have the capacity to act.
As important as it is to protect your family and loved ones through the effective distribution of your property at your death, it is vital that you ensure YOU are provided for during your lifetime in the event of incapacity.