Frequently Asked Questions
Why are living trusts such popular estate planning tools?
Living trusts are popular because they:
are flexible
are easy to amend
avoid the costs, delays and public nature of probate
avoid the costs, delays and public nature of conservatorships
can be set up to minimize or eliminate estate taxes
What is probate?
Probate is a court-supervised process. The purpose of probate is to transfer assets held by a decedent to either:
The beneficiaries of the decedent's will, or
If there is no will, to the decedent's closest relatives ("heirs")
In California, probate is generally necessary when a decedent dies owning over $100,000 in assets, EXCEPT:
Assets owned by a living trust
Assets owned in joint tenancy
Bank and security accounts held in TOD, POD or ITF form
Life insurance proceeds
Retirement accounts, including 401Ks and IRAs
How long does Probate Take?
Probate is a process which has built in time periods which stretch the probate for a typical estate to approximately 7 months at minimum. However, there are some procedures which can be completed in a shorter period of time.
Can an Executor or Administrator of an Estate Sell Property before the Probate is Completed?
Yes – providing certain requirements have been satisfied.
What is a conservatorship?
A conservatorship is a court-supervised process. The purpose of a conservatorship is to appoint a person to be responsible for your care and for the management of your estate if you are unable to do so yourself.
In California, conservatorships can be avoided with a good estate plan that includes:
A properly funded and carefully drafted living trust
An Advance Health Care Directive and HIPAA
What are estate taxes?
The Federal Taxation on the transfer of wealth is done through a combination of the “gift tax” and the “estate tax”. The gift tax applies to life time gifts and the estate tax applies to assets owned at death. Currently, estate taxes are imposed on estates valued at over $2 million (Note: You must include in this calculation the value of all taxable life time gifts). In the year 2009, the amount that can pass free of estate taxes will increase to $3.5 million. In the year 2010, the estate tax will disappear completely. It is predicted that Congress will reenact the current estate tax schedule after 2010, and it will revert to $1 million in 2011.
Estate taxes are not imposed on assets passing to:
The surviving spouse
Qualified charitable organizations
Proper estate planning can substantially minimize, and often eliminate, estate taxes for children and other beneficiaries.
What is the procedure for having a living trust prepared?
Schedule a consultation with our office
Receive a firm quote on total costs and fees after the consultation
Complete the estate planning client worksheet
Review the draft of the documents prepared for you and provide us with any comments or changes.
Schedule a signing appointment
Sign documents
Review your estate plan with us every few years
Update/amend your estate plan when needed such as when major life changes occur
Contact us today for a free initial telephone or e-mail consultation.
ESTATE PLANNING WORKSHEET
Our standard worksheet and questionnaire is available to download here.