Estate Planning

Estate planning involves three general considerations.  First, you should provide directions so that after your death your assets will be distributed to persons or institutions you have selected – your spouse, children, favorite charities, and so forth.  Second, careful planning will reduce the costs associated with transferring your assets, particularly taxes and attorney’s fees.  Finally, your estate plan should provide a mechanism for individuals of your choosing to manage your financial and medical affairs if you were to become incapacitated for a period of time before your death.  A well thought out and prepared estate plan provides for the orderly transfer and efficient management of your assets upon incapacity and death.

Properly created and executed estate plans can produce significant savings in taxes, legal fees, and court costs when the need arises.  Estate planning documents include, but are not limited to, a Living (Inter Vivos) Trust, a Will, and Durable Powers of Attorney for both health care and financial decision making.  Estate plans are far from “one size fits all” and Mr. Rank, a certified specialist in estate planning, trust and probate law, as certified by the State Bar of California, Board of Legal Specialization, will counsel you on the advantages and disadvantages of the many options available so that the documents are tailored to your specific needs.

Nearly everyone has an estate, regardless of how large or modest.  An estate is comprised of all of your possessions – your home, other real estate, bank accounts, investments, business interests, life insurance, IRAs, annuities, 401(k)s and other retirement accounts, group death benefits, motor vehicles, personal possessions, family heirlooms, and more.  An estate plan allows you to specify how these assets are distributed to your loved ones upon your death.  In addition to stating whom you want to benefit from your estate, you can provide instructions as to what particular assets selected beneficiaries are to receive, and how you want them to receive their inheritances (outright, over time, and at what age).

A good estate plan is much more than deciding what individuals are to share in your estate after your death.  An estate plan should also:

• Include instructions for your care if you become disabled before you die.
• Name a guardian for minor children.
• Provide for family members with special needs without disrupting government benefits.
• Provide for loved ones who might be irresponsible with money or who may need future protection from creditors or divorce.
• Provide ample liquidity at your death.
• Address long-term care issues in case of an extended illness or injury.
• Provide for the transfer of your business at your retirement, disability, or death.
• Minimize taxes, court costs, and legal fees.

Estate planning documents should be integrated; that is, the documents should be designed to work together.  For example, California law prohibits individuals acting on behalf of another under a power of attorney to take actions with respect to the other’s trust (estate plan) unless both the power of attorney and the individual’s trust authorize such actions and grant the requisite powers.

Estate planning is really an ongoing process, and not a one-time event. Your plan should be reviewed and updated as your family and financial situations change over your lifetime, and to make certain that the plan is in compliance with any changes in the law.

If you have no estate plan in place at the time of your death, your assets will be distributed according to the probate laws in your state.  Oftentimes this results in an estate distribution that does not reflect the decedent’s relationships and wishes.  The fees and costs associated with a probate proceeding are generally much more costly than those for administering a trust after death, leaving less for your loved ones.