What is estate planning?
Estate planning is a process for the easy and efficient distribution and transfer of your home, property and possessions, which encompass your “estate”, after your death, done through legal documents known as a will and living trust. Estate planning also includes a process of planning for personal emergencies in the event of your health and mental incapacity.
What is the goal of estate planning?
The main goal is to ensure that your property will go to the people you want, the way you want, and when you want. You stay in the driver’s seat, and you stay in control as opposed to having a judge decide after your death. Also, it allows you and your loved ones to save as much as possible on taxes, court costs and attorneys' fees upon your death. Lastly, it helps in minimizing conflict and family drama between your loved ones over money, your possessions as well as other important decisions, such as your memorial service or burial.
Who needs estate planning?
● Any person who has a minor child or dependent
If something happens to you and you did not appoint a guardian, a judge will determine who is best fit to take care of your minor child. This process is expensive, it takes time during which your child is left in limbo, and the chosen guardian may not be the person you would have wanted. This can all be avoided if you name a guardian in your will.
● Any person who owns a home or real property
A living trust bypasses probate court, which is often a lengthy, public and expensive process, and passes the real estate down to your chosen beneficiary. Contrary to popular belief, real estate does not pass down to your heirs automatically.
● Any person at all who would like to leave a legacy, keep peace between their family in the future and ensure that the right person receives their personal property and items with sentimental value (rings, awards, diaries)
What is probate?
Probate is a legal process in which a special court administers a deceased person’s estate. During probate, the court resolves any claims against the estate and interprets the deceased person’s will, if there is one, or intentions, if there is no will. Probate generally takes between 15-18 months and costs 3-7% of the total value of your estate.
The only way to avoid probate is to have a living trust in place in addition to a will.
What is the difference between a will and a living trust?
A will is subject to probate court, but a living trust is not.
Does my will or living trust need to be recorded?
No. However, any property put into your living trust must be transferred into the trust name. The real estate property deeds need to be recorded.
If I put my property into a living trust, how is it affected?
As the trustee of your trust, you control the trust property during your lifetime, so you can sell it, refinance it or remove it from your trust altogether. Again, you stay in the driver’s seat, so you derive the benefits of planning ahead without tying up your property during your lifetime.
What happens if I don’t have a will or living trust?
Your property will be transferred according to the laws of California. This process will be time consuming and expensive and again may not follow what you really want.
About Wendy Pizarro Campbell: Wendy serves as a Senior Attorney at California Law Partners, APC and specializes in estate planning and asset protection. For any questions or comments, please contact firstname.lastname@example.org or (619) 320-6065. This article is for general, informational purposes only and does not establish an attorney-client relationship.