What Is Estate Planning?
An estate plan is a compilation of legal documents generally including a revocable living trust, pour-over will, durable power of attorney for financial affairs and an advance health care directive. Who needs an estate plan? Everyone.
We all may be involved in an unexpected accident or suffer from diminished capacity. We all will eventually pass away. Having an estate plan gives you the ability to make decisions regarding who will assist your loved ones during these challenging times.
The Importance Of An Estate Plan:
Every state has different estate planning laws. In the State of California, when a person passes away, if they have more than one hundred fifty thousand dollars ($150,000.00), then these assets are subject to a court process called probate unless they are held in a trust. For this reason, it is better to own real estate as a trust, rather than as an individual.
Finally, having an estate plan enables you to decide who inherits and how inheritances will be distributed.
What Is Probate?
One problem with our probate system in the State of California is that it is an expensive, public process. Once your estate goes through probate, everything about you, your financial affairs, and your beneficiaries becomes public information. This is to ensure that creditors can locate your assets and file claims against your estate. In this modern world of identity theft, keeping your affairs private is critical.
The probate process is costly and time consuming. A typical probate process take about 9-12 months, but if any complications arise, it can go on for years. With a trust, this process is much faster and allows for your loved ones to avoid court costs and higher attorney fees.
In probate, the fees are predetermined in the probate code and based on the value of the estate.
Whether you are trying to avoid probate for your estate or you find yourself needing to initiate probate for a loved one’s estate, our firm can help!
Complying with filing requirements and other formalities is essential for small businesses. We assist our clients in forming and dissolving LLCs and corporations, and we offer guidance on planning for the unexpected in your business by assisting with buy/sell agreements and business succession planning.