Both estate planning and probate are complex but important processes that address critical end-of-life concerns. Most individuals can benefit from working with an attorney as they make their way through these key ventures.
At some point, often during later life, most people find it important to consider how their estate will be divided among beneficiaries following their death. If you fail to create a clear plan and outline it in a legally binding document, there is no way to guarantee that your property will be given to the parties you planned to receive it—even if you made an unofficial agreement with your beneficiaries. The only way to ensure that your assets such as real estate, bank and/or brokerage accounts, and personal property belongings end up in the right hands with minimal or no intervention from a probate court is to navigate the estate planning process.
Aside from designating the recipients of your estate, a number of other variables can be assessed during the estate planning process. For example, who you designate as the executor of your will or the successor trustee under your trust is an important decision since that person will be in charge of following the instructions in your estate plan after your death. The person you designate as the guardian of your minor children if something were to happen to you is an important consideration as well. Taxes are another important factor to consider, too. Many people create estate plans that either minimize or eliminate the taxes their beneficiaries face during the administration process. Ultimately, however, the overall goal of an estate plan can vary from person to person. This goal can be extremely simple or fairly complex, depending upon your circumstances and the nature of your assets.
Several documents and designations can be included in the estate planning process, depending upon your needs. Some of the most common devices are:
Wills are among the most common vehicles for estate planning. They are perhaps the simplest way for an individual to plan for the division of their estate following their death.
A will must clearly and concisely outline both an executor and beneficiaries. As a result, it is crucial to carefully complete the will creation process to avoid issues during the administration of the estate and asset distribution that may put undue stress on your beneficiaries and executor.
To ensure that the estate distribution process goes as smoothly as possible, consider working with an experienced estate planning attorney to create your will. Your lawyer will be familiar with the laws surrounding wills and asset distribution and can inform you regarding whether a will is right for you and the correct language necessary to craft your will. With their guidance, you can avoid any errors that would compromise the legal viability of your will or potentially subject your estate to probate.
Most individuals create both a trust and a will in connection with a complete estate plan. Trusts enable you to exert control over your assets before and after your death and allow for management of your assets in the event of your mental incapacity.
Trusts fall into two general categories—revocable, or living, trusts may be changed before your passing. Irrevocable trusts cannot be altered after their creation. However, these are far from the only types of trust available.
Many individuals favor trusts because they provide increased control over the disposition and management of their assets. There are even specific trust provisions that allow you to manage your wealth for several generations. Another reason trusts are favored by some is that they often allow beneficiaries to skip the probate process altogether, provided that the trust is properly funded.
As of January 1, 2020, the threshold amount for probate in California is $166,250. If a decedent’s estate exceeds the threshold amount (excluding: any assets held in trust, assets passing by joint tenancy, and assets passing by beneficiary designation forms), the decedent’s will may be subject to probate. Some other common reasons beneficiaries are faced with probate court and probate litigation include the following:
All of the issues above can require intervention by a probate court, often through a petition filed by a beneficiary or other interested party. After filing, a hearing on the petition is set by the court, the petition is served and notice of a hearing on the petition is provided to all required parties. The parties then have an opportunity to object to the petition in writing and at the hearing and then a decision is made by the judge, sometimes after a trial.
Depending upon the complexity of the estate and whether the individual engaged in adequate estate planning, the amount of time trust administration and probate takes can vary. Generally, the full process can take somewhere between nine and eighteen months to complete. In some instances, however, probate can take much longer.
Creating a living trust before your death may allow beneficiaries to skip the probate process entirely. In addition, if assets were held in joint tenancy with another individual, or if beneficiary designation forms are on file with financial institutions stating who is to inherit assets on death, probate may not be necessary.
Finally, if the total value of the estate is low enough (under $166,250 for California residents), probate may not be necessary.
To ensure that the estate planning process occurs smoothly and without time-consuming or costly errors, it’s important to consult with an attorney. Neglecting to review or create your will and trust with a lawyer is a risky decision. Even a small mistake in the document can cause unnecessary strain on your beneficiaries or call your intent into question. Your attorney can ensure each of your estate planning documents are legally enforceable documents which clearly reflect your intentions regarding the distribution of your estate following your death and the individuals who you’ve tasked with administering your estate.
If you are looking to create an estate plan or anticipate navigating probate court in the Laguna Beach, CA area, Davis Toft Law can handle all your estate planning and trust administration needs. We have been providing skilled legal services to Californians since 2001. For more information or to schedule a consultation, get in touch with our office today.