Newman Law Group

Tustin Estate Planning Law Blog

Trust administration involves working with multiple people

A person's estate plan often relies on other people to ensure that the correct steps are taken to administer the remaining assets. Many California residents choose to use trusts as part of their plans, and they need to appoint trustees to handle the trust administration process. Choosing the right person can be difficult as trustees have a lot of responsibilities to handle.

One important aspect to consider is that the trustee will have to work with various people during the administration process. He or she will need to have contact with current beneficiaries and may need to work with remainder beneficiaries as well. Additionally, the trustee will have to make regular reports to the court and the beneficiaries to show how the trust is doing.

Executors will need to marshal estate assets

The death of a loved one is a life-changing event for surviving family members. It can be a challenging experience for a number of reasons, and the executor of the estate will likely have many challenges to face in addition to handling his or her personal feelings. Settling a California estate takes a lot of work, and the executor will need to pay close attention to estate assets in particular.

Unfortunately, it is not always easy to protect the assets of an estate. Some family members may think they can simply take what they want without waiting for formal probate proceedings to end, and if items go missing, serious issues could arise. As a result, the executor needs to ensure that the assets are protected, which could include changing the locks on a home or other storage area and inventorying the assets to make sure everything is accounted for.

Wills, other planning documents can provide useful instructions

Many events in life are better navigated when instructions are available. For particularly difficult times in life, those instructions can seem like a gift to lessen stress and help individuals through a trying period. Wills and other estate planning documents can provide useful instructions to California families who need that information and help after the passing of a loved one.

An estate plan can help surviving loved ones find a sense of purpose by giving them specific duties and jobs. Not every job is active, such as being a beneficiary who receives assets from the estate, but some jobs have important tasks to accomplish. For instance, the executor of the estate will need to tackle a number of responsibilities, and putting someone in charge who can handle those responsibilities and providing that person with instruction could bring at least a bit of relief.

Estate planning tips to avoid probate

Estate planning is often thought of as something only wealthy families need. However, every family should have a strategy in place to make the transition of assets smoother and less stressful for loved ones. One big reason to have an estate plan is to minimize the risk of assets winding up in probate court. Probate is an expensive process that can take many months to complete. Here's how families in California can avoid having assets locked up in the probate process.

Basically, probate is the process of settling an estate. The probate process usually takes anywhere from six to nine months, but may take longer in some cases as the probate process varies from state to state. However, there are ways that this process can be avoided altogether. The best ways to avoid probate are through an initial form of ownership or with a living trust.

Make a list of assets to include when estate planning

Making the decision to create an estate plan is one that most people will not regret. In fact, estate planning can better ensure that California residents are able to express their end-of-life and wishes to their family members in a legally-binding way. One of the easier places to start with this process is to consider the assets to include.

Valuable assets often come to mind when individuals begin thinking about how they want to distribute their property. Certainly, assets like real estate and vehicles are important to consider, but it is important not to overlook other smaller, sentimental items. Personal property like books, furniture and jewelry are all important assets to keep in mind when estate planning. Remembering to include them could prevent family members from potentially fighting over them later.

Wills are important to consider for anyone with an estate

If California residents own any assets, they have an estate. As a result, they can benefit from creating an estate plan that would allow them to express their wishes for various estate-related matters. Wills and other documents can work together to create a unique and tailored plan for anyone.

Though estate plans are beneficial, one recent survey showed that 25% fewer adults had a will in 2020 than in 2017. Unfortunately, this means that more adults may be leaving their estates up to chance in terms of how their assets will be distributed and who will be in charge of important matters. In fact, without estate planning documents, state laws will dictate how an estate is settled, which may not be in line with someone's personal wishes.

Health care directives are a useful safeguard

An unexpected illness or injury could easily leave anyone in a difficult situation. In some cases, health conditions can leave a person unable to express his or her wishes for care, and someone else must do so. The idea of leaving these decisions in the hands of another can certainly seem scary, but fortunately, California residents can create health care directives for this purpose.

A health care directive is a way for individuals to provide instructions for care for certain scenarios. For example, if a person is in a likely terminal situation, he or she may not want any resuscitation efforts made or may not want to be left on life support. This information can be placed in an advance directive so that loved ones can know what the person wants.

If trust administration goes awry, trustees may be responsible

One of the important steps of estate planning is appointing trusted people to important roles. For instance, California residents want to ensure that they choose responsible parties to act as executors and trustees. These parties are in charge of handling probate and trust administration, and if something is not handled correctly, the person in charge could face trouble.

First, utilizing a trust as part of an estate plan is a smart step. It can help better protect assets and allow the grantor to have more control over asset distribution after his or her passing. However, the trustee will be the person who manages those assets and follows the grantor's instructions for distribution. If the trustee does not follow those instructions or otherwise violates the fiduciary duty of this role, he or she could be held legally responsible for any problems that arise.

Consider reducing estate taxes when planning

When many California residents think of their end-of-life wishes, they consider who they want to receive certain assets. However, it is important to go beyond that line of thinking when estate planning. For example, it is often a smart move for parties to consider reducing estate taxes, which could leave more assets for loved ones.

Though many estates are exempt from having to file an estate tax return, there are many that still need to consider this measure. As of 2020, estates with combined gross assets and prior taxable gifts that total more than $11,580,000 will need to file an estate tax return. Fortunately, parties can think ahead and consider what is included in their taxable estate and what steps they could take to reduce their taxes.

Power of attorney agent cannot collect Social Security payments

When creating an estate plan, California residents will need to appoint trusted people to various roles. One important role to consider is who to appoint as a financial power of attorney agent. However, this is not the only finance-related role that individuals need to fill when planning ahead.

While a financial POA agent can handle a number of financial-related matters, he or she cannot handle everything. In fact, if a person becomes incapacitated and needs someone to collect Social Security payments on his or her behalf, the POA agent does not automatically have the power to do that. The Social Security Administration does not recognize the power given to a POA agent and instead requires a separate designation to be made with the SSA.