What is an Estate?
An estate is simply all of your tangible possessions. At your death, all of your assets transform into your estate. Thus, whether you have personal items with sentimental value or multiple properties and valuable assets, you should prepare documents to ensure that you make the final decisions regarding the disposition of your estate.
What is estate planning?
Estate planning is the process by which you determine to whom your assets will be transferred upon your death to ensure your wishes are fulfilled. A comprehensive estate plan will also address your future needs in case you ever become unable to care for yourself. An estate plan will instruct how and by whom your assets will be managed for your benefit during life and who is authorized to make health care decisions on your behalf should you become unable to make these decisions for yourself.
Who needs estate planning?
Everyone. Estate planning is important for any person who owns real estate or has assets with a total value of $100,000. An estate plan is also vital for people with minor children, children from different marriages, disabled heirs, and those couples who choose not to get married or are not allowed to get married yet still want the same rights and protection afforded to married couples.
What happens if I do not plan?
Without an estate plan in place, the court will appoint someone to handle your assets and personal care if you are found to be incapable of making these decisions for yourself. At death, your assets will be distributed to your heirs according to a set of laws called “intestate succession.” According to these laws your property will be distributed to the closest living members of your family, but they may not be your choice of heirs. An estate plan gives you greater control over who will inherit your assets.
What is probate?
Probate is the court process of distributing your property. Without a will in place, your assets are distributed according to “intestate succession”. With a will your assets are distributed according to your instructions, as long as no one is successful at contesting your wishes. Probate is a public affair, thus even with a will in place the value of your assets and the identity of your beneficiaries will become a public record.
Is probate expensive and time consuming?
Yes. A typical probate can take 9 months to a year. A complicated estate can take more than a year to complete. In California, lawyer’s fees and executor’s commissions are based on a statutory fee schedule, thus probate may cost more than the management and distribution of a comparable estate under a living trust.
How can probate be avoided?
Probate can be avoided by having a properly drafted and executed trust in place. When a living trust is established, you designate a trustee to handle your affairs and distribute your property according to your wishes. Bypassing probate with a trust ensures that property is distributed more quickly, less expensively, and in private.