Newman Law Group

Tustin Estate Planning Law Blog

Family meetings can prevent probate battles by children

Family conflict is unfortunately a fact of life that exists in California and everywhere else. It can be a bitter dynamic when it erupts in the context of probate of a deceased parent's estate. Probate contests not only may drain the estate of funds, but they also contribute to bad feelings among family members that can last for a long time.

When an aging parent is thinking about how to divide his or her estate, issues of the different needs and desires of the children often interfere with an easy decision. The parent often brings these considerations up with an estate planning attorney for assistance in resolving them. The advice to the parent will likely be to have a family meeting or otherwise confront the potential complications now rather than letting them manifest in full bloom after one's death.

Appointment of a strong executor protects the heirs and assets

There are several options that an individual or married couple residing in California may choose when deciding who to appoint in the will as a personal representative of the after-death estate. The first thing that people generally try to do is to appoint a trusted friend or family member to manage the estate and make the ultimate distributions to the heirs. In the case of a husband and wife with mutual wills, they will generally appoint each other as personal representatives, with an alternative who will act if both spouses die within a short time of each other.

The choosing of a family member or trusted friend may not work for several reasons, including death of the person or a personal squabble with the potential choice. There may also be a fear of appointing a relative who is known to have difficulties with his own financial affairs. Where the choice of a family member or other individual is not possible or feasible, there are other options that may be chosen.

Estate planning provides asset protection for one's heirs

In California and elsewhere, the process of estate planning serves several useful purposes. One of the most important is the protection of assets on behalf of one's selected heirs. Having everything in order at one's death will prevent unnecessary family squabbles and monetary expenses and will assure that the maximum value of assets will go to the family members and friends that the maker chooses.

Without an estate plan, one's death is a license for the state to move in and prescribe all of the rules for disposition of one's assets, regardless of what the decedent may have wished or preferred. With an estate plan, each heir will be provided for in the way determined most desirable by the decedent. Making these determinations during life, preferably at an early age, will thus assure a smooth and efficient passage of a decedent's assets.

Estate planning may use beneficiary designation to avoid probate

Avoiding probate is a popular subject in California and elsewhere. It is often blogged about online and discussed in general by persons contemplating or in the process of putting together estate planning components. Some people prefer to have their heirs avoid the time-consuming and public nature of the probate process.

One way to avoid probate on some assets is by filling out beneficiary forms on life insurance policies. This will cause payment of the death proceeds to go directly to the designated beneficiary and not to the probate estate. Such proceeds will escape probate treatment.

Avoiding probate may be an effective estate planning goal

Many people who go through estate planning in California express the desire to avoid the probate process. What does that mean? Probate is the legal process of distributing one's assets after death, either pursuant to the instructions in one's will or without a will. Avoiding probate is not currently done to lessen the tax burden because most people are exempt from federal estate taxes under the current laws.

The main reason to avoid probate is to have one's heirs save months of time waiting for the assets to be liquidated or otherwise prepared for distribution, filling out considerable paper work, avoiding public scrutiny and reducing the cost of legal fees. Many assets can be set up to pass automatically upon death. This requires titling the asset in the name of the decedent and the surviving heir, and designating that the right of survivorship applies.

Wills and pet trusts allow owners to provide for beloved pets

For many people throughout the country, including here in California, there is nothing more important than the well-being of their beloved pets. The thought of one's pets being dropped off at a public shelter upon the owner's death is anathema to the great majority of pet owners. That is why providing for pets in wills and other estate planning documents can deliver precious peace of mind to the individuals and couples who own pets.

If a situation occurs where planning was not done, one can only hope that the person given the task will have the good sense to use a no-kill shelter. However, even that less than optimal choice cannot be assured without estate planning documents making it very clear what should be done. Most people who take the time to plan will likely choose to have a family member or close friend adopt the surviving pet.

Asset protection looms as a major goal of estate planning

In California and throughout the country, estate planning is a process of preparing for future eventualities in a way that protects one's family and dearest friends from inconvenience and even loss of one's assets. The use of various trusts, a will, power of attorney and health care directives form the core of asset protection. By being able to designate the preferred family and friends for asset inheritance and those best qualified to manage the necessary procedures on one's behalf, the individual is able also to assure that his/her wishes will be followed.

There are many questions involved in the estate planning context. One of them is what to do if one becomes incapacitated and unable to handle his/her affairs in the future. Who will handle the assets, health care decisions, day-to-day management of purchases and expenditures, keeping one's family members protected and financially secure? This choice is made during the estate planning procedure.

Estate planning uses portability to remove federal estate tax

One important fact about federal estate taxes in California and nationwide is that a decedent has a $5.45 million gift and estate tax exemption at death. This generally excludes those in the middle class of the economy from incurring a federal estate tax, and generally eliminates the issue from their estate planning considerations. However, more and more people are facing the potential of being wealthy enough at death to want to plan correctly for the possibility of a federal estate tax at death.

In prior years and decades, a federal estate tax was more prevalent because the exemptions were lower. The current exemption amount came after gradual increases over the years and was passed in 2010. The tax law passed that year also created a vital provision called portability.

Wills may be constructed to fit many familial situations

The prospect of a married couple dying simultaneously or near to each other, such as in an accident, is slim but it does happen. An estate planning attorney in California or elsewhere will consider that prospect when making mutual wills for a couple. The provision becomes important especially where there are young children to be considered.

The standard clause for this is a survivorship clause in each will, which provides for the economic and personal care of the minor children if the spouses die within 30 or 60 days of each other. In that event, the guardian or trustee of the monetary assets is designated and the terms to guide the trustee are established. The testators also appoint a guardian of the person of the children where both parents are deceased.

Trusts can be beneficial way to transfer assets

Estate planning is often assumed to be something that only wealthy individuals need to do. However, this assumption is simply not true. For some California families, estate planning can be as simple as creating a will; for others, trusts are the preferred method when it comes to how to transfer assets.

Establishing a trust can be a fairly simple thing to do. First, assets are transferred to the trustee. This trustee then manages the assets on behalf of the beneficiary. Finally, the trustee manages the assets and then distributes them to the beneficiaries based upon the grantor's instructions.