A Matter of Life & Death

THE NIGHTMARE YOU MAY BE LEAVING YOUR FAMILY AND WHAT YOU CAN DO TO AVOID IT

In California, you generally have the foIIowing two options regard ing your estate: (1) you IeI the government decide what happens to your assets (in which case, costly probate is usually involved); or (2) you take full control of what happens to your assets (and avoid costly probate entirely).

In the following, I address the most common questions that I receive as an estate planning lawyer.

How much is probate and why do I want to avoid it?

The cost of probate is set by statute in California under Probate code § 10810 and is based on your gross estate (which could equate toa small fortune). This statutory fee is payable to your personal representative as well as to the attorney. Aside from the actual cost of probate, the length of time to administer and close probate usually takes overa year but can take multipIe years in some circumstances.

If you have no plan, you’ll have no say and the gov’ernment will decide on your behalf

Failure to plan means your estate will default to the California plan under the Probate Code. Even if you had certain independent authority to administer a decedent’s estate, the court must approve certain transactions including the estate’s final distribution.

Said differently, your family will be at the mercy of the court.

I have a will. Isn’t that enough?

Most people believe a will is the answer, but unfortunately a will alone does not avoid probate. A will allows you to control how your property is distributed but the will still needs to be probated. Another important aspect about wills you should keep in mind, is that wills are only effective after your death. If you become incapacitated, your will provides no protection with respect to your financial affairs or medical decisions.

So, in addition to a will, what else do you recommend?

A trust. Even witha small estate, a trust helps you avoid the headache and non-confidential process of probate. A trust allows for planning during incapacity and gives immediate control of your trust assets to your successor trustee. A trust also allows you to maintain control over your property and distribution to your family. Families with young children may not want their children to inherit their share of the estate at 18. A trust allows parents to control the distribution to their respective spouse or children for a sum of years or age of the beneficiary.

Setting Up a Trust is Faster, Easier and More Affordable Than Most People Think

Is it difficult and time consuming to set upa trust?

Getting a trust set up can be completed in just a few short weeks and requires very little time on your part but there are a few traps you will want to avoid when considering your options.

What are the traps I should avoid when setting up my trust?

It can be tempting to use an inexpensive website to generate a seemingly “simple” trust for your estate plan. Over the years, we have worked with countless clients that have gone this route. Without fail, these plans are almost never in line with our clients’ actual goals or expectations and can have significant negative tax implications or other unforeseen liabilities. This is often due to a question within the generic online questionnaire either not being fully understood, answered incorrectly, or an important question was simply never posed.

What is the safest way to set up my trust?

Using an estate planning attorney.

Does it matter what attorney I hire?

Yes! The majority of attorneys that provide bargain planning set up cookie-cutter products with the sole goal of avoiding probate. This is obviously a start but almost always falls short of our clients’ expectations. Often, corners are cut relating to taxes, as set allocation, succession, child guardianship, and more intimate legacy planning.

What makes you different?

LS Carlson Law understands that there i s no “one-size- fits-al I” approach to estate planning. Your assets, children, wishes, and needs are unique to your situation, which is why it is critical to devise a plan specific to your circumstances. Getting this wrong could unravel your objectives and be extremely costly. We also understand needs change over the years and are active in making sure your plan remains in line with your current goals. Our team also works to minimize tax exposure and knows what it takes to minimize your liability both now and upon any asset transfer. Simple or complex, we will ensure your estate plan holds up when it matters most.

How do I consult with you?

Easy — simply call our office and schedule a complimenatry consultation with me. During this meeting, I can determine what plan is best for you and your family.

ABOUT THE AUTHOR

Linda Honey Esq. isa California- based attorney who practices exclusively in the area of trusts, wills , estate planning, and succession planning with special expertise in advising high net worth individuals and administering taxable estates, including the preparation and review of estate tax returns. Ms.

Honey has an LL.M in Taxation and has drafted, planned, and administered various irrevocable trusts, such as special needs trusts, charitable remainder trusts, intentionally defective grantor trusts, GST trusts, and irrevocable life insurance trusts. She currently heads the Estate Planning division at LS Carlson Law, PC,a law firm headquartered in Aliso Viejo.

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