Estate Planning

The foundation for most estate plans is a revocable living trust–a living trust that transfers your property into a trust for your benefit during your lifetime and, after your death, to your loved ones.  There are a number of benefits to a revocable living trust.

One major benefit is that these assets will stay out of probate, which can save your heirs time and money.  Probate is the court-supervised administration of your estate which occurs when the assets of the estate are not in a living trust.  Probate usually takes a minimum of 6 months, with a year being the more average time.  In addition to court costs (filing fees, court-ordered appraisals, newspaper publication costs, and so on), statute provides for a fee to the executor or administrator of the estate (known as the personal representative of the estate) and his or her attorney.  This fee is determined by the size of the estate and is due to both the attorney and the personal representative.  Depending on the size of the estate and whether the personal representative waives or forgoes his or her fee, this can be from 2% to 5% of the total estate, before deducting for debts or mortgages.

Another major benefit of a revocable living trust occurs in the event you become unable to manage your financial affairs due to accident, illness, or infirmity.  Without a living trust, your assets could be subject to what’s sometimes known as a “living” probate, as opposed to a “death” probate.  Powers of attorney have traditionally been relied upon to provide for situations like this.  However, if the person or persons you’ve named as your power of attorney are either unable (through their own disability or death) or unwilling to so act, there is no one legally empowered to sign on your behalf.  In such situations, the living probate (known in California as a conservatorship) is the only legal option.  As in a death probate, time, money, and privacy are lost, a loss that could have been avoided with proper planning.

A third rarely-discussed benefit of a living trust-based estate plan is the opportunity to leave detailed, loving instructions and plans for one’s loved ones.  It’s rare to see this level of detail and care in documents that lawyers know will become part of a public record in a probate proceeding.  Special circumstances are best addressed in this kind of estate plan.

Lastly, and most importantly, this kind of planning confers peace of mind.  Have you had a nagging feeling that lots of loose ends would affect your loved ones if you weren’t around?  Have you avoided thinking about and planning for that eventuality?  What would it be worth to you to know that those you care about are taken care of by loving, thoughtful planning done by you?  That is a value beyond money.  I’d like to help you achieve that.  Please, give me a call or send me an e-mail.  I’d be honored to help you.