Estate Planning San Diego

An estate plan is a valuable tool that individuals use to plan for their family’s future and ensure that their assets are handled according to their wishes. When someone sets out to create their estate plan, however, they typically have a lot of questions they need answers to before they begin. If you are ready to start the estate planning process, consider the following common questions most individuals share.

What Will Happen to My Assets If I Don’t Create a Will?

When an individual passes away without a will, it is known as dying “intestate,” and their estate is subject to a sometimes long and complex process called probate. The state of California has intestacy legislation that provides direction for the deceased’s property to be divided amongst their living relatives, based on a hierarchy of sorts. If the person was married with no children, the entire estate is given to their spouse. If they were married and had children, their spouse is given all of their community property and half of their separate property. The other half of the separate property is then divided among their children.

For an individual who was unmarried and had no children, the probate court gives their property to their surviving parents. In cases where their parents have already passed, the property goes to their siblings.

What Is Community Property in California?

In the state of California, the community property doctrine applies to couples who are married. It states that all assets the couple obtained while they were married are owned equally by each of them, although there are a few exceptions.

Is It Better to Have a Will or a Living Trust?

It is important to consider one’s specific circumstances and goals to determine which one of these plans is better. Every situation is unique, and the reasons for choosing one plan over another may be tax-driven, personal, or financial. In many cases, a will can provide tax advantages, just as a living trust does. However, most individuals make this decision based on whether they want their estate to be subject to the probate process or not.

What Are the Advantages of Creating a Living Trust Compared to a Will?

The main reason individuals choose to have a living trust is that it helps their loved ones avoid dealing with the courts and the probate administration process. With a trust, a successor trustee is tasked with overseeing the management and distribution of the individual’s assets and property, as opposed to a court-appointed executor when there is a will. It is important to note that although some individuals prefer avoiding court-directed administration, it is valuable in some circumstances because it provides certain safeguards that trust administration does not.

In What Ways Is a Will Preferable to a Living Trust?

When the individual creating the living trust or will has concerns about being able to name a trustee who is both responsible enough and qualified to oversee the management and distribution of their assets and property without help from the courts, they may prefer a will. The probate court system is very structured, and it provides an enforceable way for a person’s beneficiaries and heirs to be sure things are done fairly during the estate administration. Probate court also works under strict rules if any beneficiaries believe the executor has acted improperly and needs to be challenged.

Are There Costs Involved With Administering a Trust?

Even though a living trust will typically enable the beneficiaries to avoid probate court, there are still costs associated with administering the trust. The successor trustee who oversees the management and distribution of assets in the trust is entitled to charge trustee fees. Trustees who are family members will often waive these fees, although some decide it is fair for them to be compensated for the effort they put into the administration of the trust.

Once a person begins handling this task, they realize it can be time-consuming and involve certain challenges they didn’t expect. In addition to the trustee fees, attorneys and accountants are often needed. They ensure all the beneficiaries have been given just and fair shares of the individual’s property and assets and that everything has been distributed according to existing laws and the plan set forth in the trust documents. These professionals also need to be compensated for their time and effort.

Can the Terms of a Trust Be Changed?

In the state of California, an individual may create an irrevocable or a revocable trust, and the type they choose determines whether the trust is set in stone. If the individual chooses an irrevocable trust, they are not able to change the terms. A revocable trust allows them to change the terms as they see fit or terminate the trust at any time.

Every situation is unique, and individuals have their reasons for choosing one type of trust over the other. However, many people opt for a revocable trust for the flexibility it allows in the event of major life events, such as divorce.

Are There Estate Taxes in California?

The state of California does not impose estate taxes on its residents. When an individual has a large estate, however, they may need to be concerned about federally imposed estate taxes. For instance, estates valued at $11.4 million or more were subject to federal estate taxes in 2019. The next year, estates valued at more than $11.58 million faced these taxes. Keep in mind that an estate includes real estate as well as financial investments and savings, so the value of an individual’s real estate could put their estate in this bracket even if they don’t expect it.

Can You Make Provisions for Your Pets in Your Estate Plan?

Many individuals consider their pets to be part of the family and wish to provide for them just as they would for their children. With a living trust, an individual can provide for their pets by setting aside funds to cover the cost of their care and name a person to take care of them. In some cases, an individual may wish to include a provision in their trust for their favorite non-profit organizations or pet shelters.

A Skilled Attorney Can Help You Create the Perfect Estate Plan

Every individual has a specific set of circumstances that affects their wishes for their estate, and making decisions about their plan can be complicated. The team of legal professionals at Paul V.L. Campo Attorney at Law has over three decades of experience in assisting clients with these important matters. We also have a reputation for handling our clients’ needs with compassion and attention to detail. Visit our website today to see how we can help you.