Control your legacy
Your estate plan keeps you in control of your money and it provides the framework for who, when, and how your property gets disbursed after your death.
The legacy that you worked hard to obtain can shared in so many ways. You can provide for the disbursement of your estate over time, such as delaying the inheritance until your child is 30 years old. You can disinherit your kids or you can make sure that your children from a former relationship do not get disinherited by the new spouse. You can incentivize your children to complete college or stay sober before their inheritance is disbursed. You can leave everything to charity or to your favorite pet. Your estate plan can be as unique as you are.
In California, your estate plan will almost always include a Revocable Living Trust which enables your estate to avoid probate court proceedings. This not only keeps your personal affairs private but it also saves time and money. Probating an estate in California comes with a big price tag and generally takes more than one year to complete.
Also, there are savings on so-called “death taxes” with estate planning, as compared to the alternative of not doing nothing. An estate plan assists in minimizing taxes, professional fees, and court costs. This is because your estate planning allows for tax planning to minimize taxes such as capital gains taxes, property tax reassessments, and estate taxes (if applicable).
Probate takes a long time
Due to the backlog in our courts, it takes a minimum of nine months for a probate to be completed. However, it is very common for a probate to take one year and in some cases, up to two years, to complete. Delays can generate additional costs, such as bank account fees, maintenance of the property, real estate agent commissions, and property taxes. Having a revocable living trust direct the distribution of the estate will really speed up the distribution of the assets - bottom line, the beneficiaries get their inheritance faster.
Arrange for someone to take care of you
There may be a time in your life when your decision-making capacity is so diminished that someone needs to manage your day-to-day affairs. Having an estate plan will provide your loved ones with a method to have someone to take over your affairs without their having to seek a court-appointed conservatorship. By avoiding a public, open court conservatorship proceeding, your privacy is protected; professional fees are reduced dramatically; court costs are eliminated; and your family has access to the money they need to take care of you without having to seek court approval.
Your estate plan will also provide instructions for health care matters, what to do when you cannot speak for yourself, and end of life issues. This is taken care of through an Advanced Health Care Directive (previously referred to as a Living Will). You will have signed the appropriate documents so that your appointed representative will be able to speak to your medical providers on your behalf if such a time comes.
In addition, an estate plan allows you to decide whom you wish to be appointed as your children's guardian if you have minor children at the time of your death. If your child is left without a surviving parent, your estate planning can eliminate any court battles for custody. You will also decide who is going to manage your children's money and when it is going to be distributed to your children.
Your estate planning process should be created by an attorney because it can be a daunting and emotional undertaking. It is a complex area of law with the possibility of some unpleasant and unintended consequences if your planning is not tailored to your unique requirements. Attorney Shawna Murray will take the time to learn about you and your desires to ensure that your estate planning is personalized for your needs and to keep you in control of the decision making instead of the courts.
Appoint guardians for the kids
A lack of planning can cause a disastrous fallout for some loved ones. If you have planned, your loved ones are relieved of the burden of trying to organize and finalize your affairs after your death because you have an estate plan. Your planning will provide clear directions on how your legacy is to be divided and should prevent fighting about who gets what. The Revocable Living Trust, which is the cornerstone of the estate plan, is harder to contest than a will.
Because a Revocable Living Trust is settled privately, your beneficiaries will be private and they can avoid attracting unsavory characters. When an estate is settled in court, the list of beneficiaries becomes public, and unscrupulous predators often use that public information prey on beneficiaries.
Your estate includes your home, car, bank accounts, retirement accounts, brokerage accounts, digital assets, life insurance, antiques and jewelry, and personal possessions. Creating an estate plan still allows you to keep full control of your property while you are alive and well. Your property remains your own, and unless you choose otherwise, your property will get disbursed only after your death.