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Estate Planning Services

Why You Need an Estate Plan

1. To avoid probate.

     In California, if you have real and personal property valued at more than $184,500 (with no deduction for loans), and the property is not in trust or another legal vehicle (e.g., a limited liability company), that property and any other estate property will likely need to go through a formal probate at your death.  A formal probate is generally a lot more expensive than a trust administration because of the statutory fees involved for both the attorney and the executor.  As an example, if a probate estate (real and personal property) has a fair market value of $400,000, probate fees, not including costs (court filing fee, publication, appraisal fees, etc.) would be $11,000. Both the attorney and executor would be entitled to request those fees meaning the total fees in this example could be $22,000.  On the other hand, administering a trust is usually based on hourly rates (although there are some attorneys who charge a percentage or flat rate), which is usually quite a bit less than probate fees and costs.

2. To avoid confusion and conflicts among your loved ones.

     Without a clear, written plan, your heirs may argue about how your affairs should handled if you become disabled or about how your assets should be distributed at your death.  Conflicts may arise about any verbal statements or promises you made while alive and with capacity.  A good estate plan will address both situations - management of your affairs if you become incapacitated and distribution of your assets at your death - to avoid confusion and conflicts.

3. To protect beneficiaries.

     Some beneficiaries need extra planning.  These situations include when a beneficiary is a minor and can't receive an outright distribution; when a beneficiary is disabled and an outright distribution would jeopardize their public benefits; when a beneficiary has a substance abuse problem and an outright distribution would exacerbate the problem; when a beneficiary has credit problems and an outright distribution would go to creditors rather than the beneficiary; or when a beneficiary simply lacks the capacity to manage his or her money.  In these types of situations, your plan can be tailored to protect your beneficiary, usually by keeping the funds in trust, so that distributions can help rather than ultimately hinder him or her.

4. To avoid estate taxes.

     In the past, this reason was more important than today because in 2024 a person can die with an estate valued at $13.61 million ("lifetime exemption") without paying any estate tax.  (However, unless Congress acts, after 2025 that amount is expected to drop to $5 million as adjusted for inflation (around $7 million in 2026.)  Because most estates, even combined estates, are well under $7 million, avoiding estate taxes is no longer a top reason to create an estate plan.  However, most trusts for married couples will have a safety net provision so that each spouse can take advantage of the lifetime exemption rather than the surviving spouse having only one exemption after the death of the deceased spouse.  In addition, a surviving spouse can elect to use a deceased spouse's unused exclusion if a federal estate tax return is filed. 

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Benjamin Franklin once said, "In this world nothing can be said to be certain except death and taxes."

     Even though it is not pleasant, most of us dutifully file and pay our taxes every year.  However as far as preparing for the certainty of death, most of us don't plan for that inevitability, or the possibility that we will become incapacitated.

     In a recent survey more than 50% of Americans thought that estate planning was at least somewhat important, but only 33% had a will or living trust. When asked why they didn’t have a will, 1 out of 3 respondents believed they didn’t have enough assets to leave behind (2022 Wills and Estate Planning Study,

     There are many reasons and excuses given for why people haven't done any estate planning.  Here are some of them and why they don't make sense in the long run.

Top Reasons and Excuses for Not Doing Estate Planning:

1.  I don't want to think about becoming incapacitated or dying - it's too depressing.

     Agreed, there are probably thousands of other more enjoyable subjects to think about, but if you don't think about it and at least have a basic plan, then the decisions about what happens to you if you become incapacitated or when you die will be made by others or by state laws.  So, even though it may be depressing to think about, there is at least some comfort in knowing that you have planned for your surviving family members if you become incapacitated or when you die.

2.  I'm too young to deal with an estate plan; it's only important once you reach retirement age.

     An estate plan is much more than designating who gets your assets when you die.  It includes non-monetary instructions such as an advance health care directive which lays out your wishes for medical treatment (or withdrawal of treatment) if you are incapacitated.  A famous example of what could happen without a directive is Terry Schiavo, a Florida woman who was in a persistent vegetative state from 1990 to 2005 because of a legal dispute between her husband, who wanted to withdraw life support, and her parents and family, who wanted to keep her alive.  If she had a properly written directive, years of court battles and years of being kept alive with no hope of recovery could have been avoided.


3.  I don't have a large enough estate for an estate plan.

     As seen in Schiavo case, estate planning involves much more than just disposing of your assets.  In addition to an advance health care directive, an estate plan should have a durable power of attorney where an agent is appointed to handle your financial affairs in the event you are unable to do so.  With regard to a will and trust, even though you might feel you have a small estate, it is still a vehicle for you to direct who will receive your various assets including items of sentimental, rather than economic, value.

4.  I don't have the money to pay for estate planning: it's too expensive and I'm barely making ends meet as it is.

     True, going to an attorney to prepare a proper estate plan will probably cost somewhere between $2,000 and $3,000 depending upon the size and complexity of your estate and your beneficiaries. For people that own real property in California, a trust is almost always needed to avoid probate.  If there is no trust or other "vehicle" to move that property out of the decedent's estate, a full formal probate is required which will likely cost quite a bit more than the cost of planning in advance to avoid probate.  

     Note that if a person has limited resources and does not own real property, there are cheaper options such as legal service clinics which may provide basic documents in the event of disability (advance health care directive and financial power of attorney) and at death (a simple will).

5.  I don't like the idea of discussing my finances and personal affairs with an attorney.

     Attorneys are required to keep all client information confidential.  California has one of the strictest confidentiality requirements in the nation.  The law here requires attorneys to "maintain inviolate the confidence, and at every peril to himself or herself, to preserve the secrets of" the client.  If a person still decides he or she doesn't want to confide in an attorney and dies without an estate plan, there will be no privacy at all if the estate goes through probate because probate proceedings are a matter of public record.  In contrast, a trust administration can be kept private and confidential among the family and beneficiaries of the decedent.


6.  I don't have time to deal with it now; I'll deal with it later when I have more time.

     Life is busy. As mentioned, there are thousands of other things to think about than estate planning. But the consequences of not setting aside the time to think about it and plan for the future of your family will almost always involve substantially more time (and money) on the back end, either by managing your affairs through a court ordered conservatorship if you become incapacitated, or by probating your estate if you die with no plan.


7.  My spouse and I can't agree on what we want to do.  It's more important to keep peace in our marriage than to do an estate plan right now.

     This excuse comes up a lot in blended families where it is the second or third marriage for at least one of the spouses and there are children from prior marriages.  Often, the parent of the child from a prior relationship will want to provide for that child, but there is confusion or disagreement about how to provide for both that child and any children of the current marriage.  In addition, there may be separate property and community property issues which need to be addressed.  Although blended family planning is often more complicated than a one marriage family, it is still very important to resolve issues and to prepare a comprehensive estate plan.

8.  One of our children is irresponsible with money, is a substance abuser, or has special needs, and we don't know how to be fair to that child and our other children.

     Not all children are in the same situation and therefore an estate plan should not always treat all children the same.  A trust is a very useful vehicle to provide for outright distributions to your children who are able to handle and manage assets, while keeping in trust assets for the benefit of your other children who may have special needs or who may be irresponsible in managing their affairs.  In those situations, the trustee can provide for children without jeopardizing their inheritance or benefits they may be receiving from governmental agencies.

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   In summary, remember that death is a certainty for all of us.  If you plan well, your loved ones will benefit from distributions from your estate and will likely remember you fondly. Conversely, if you plan poorly or not at all, your loved ones will suffer from delayed or reduced distributions and will likely not think of you as fondly as they would have had you planned well.

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