I will talk about the third option first. You might say, ʺnot doing anything is not planning my estate,ʺ but it is. By not doing anything you are planning for your estate to go by the laws of intestacy under the California Probate Code. This means that the Judge will use the Probate Code to decide how your estate to be distributed. This is not necessarily a bad thing but it might not be what you wanted. I am not going into the laws of intestacy here but will do so in another post. Sometimes what plays out is sad and could have easily been prevented by doing a simple will or trust.
Normally, when planning your estate you will consider doing a trust. some of the considerations are the following:
- if you own a house
- if you have bank accounts
- if you have children
- if you have rental properties
- if you own a business
If you have any of the above items, regardless of debt, then you are a good candidate for a trust and you might want to look into one. The reason I say that this is regardless of debt is because the probate court considers assets in their gross amount for fees, etc. and while a mortgage will be listed it is not the main consideration unless there will be a foreclosure.
A trust is states your intent, re-titles certain assets to bypass the probate court, i.e., your home, certain bank accounts, etc. A trustee will be appointed to collect and distribute the trust to your beneficiaries at your time of death. A trust does not change how you deal with your property and does not change your taxes during your lifetime, unless it was your decision to create an irrevocable trust, etc. at the time or your incapacity for your benefit.
Generally, an estate plan includes other documents like: guardianship nominations, pour-over wills, durable power of attorney, advanced health care directive, HIPAA Agreement, memorial services memorandum, pet trusts, continuing trusts, personal property memorandum, tangible personal property memorandum, community property agreement, trust deed and preliminary change of ownership report. While a trust is the best thing you can do for your family there is one more way as listed below.
A Will is a document that states your intent but does not re-title any of your assets. Your family will still go to probate court but the Judge looks at your stated intent versus using the probate code to determine the division of your estate. If you cannot create a trust, do to finances, etc. then at least create a will. This will save your family grief, suffering and surprise. This has been my experience.
A will can come with other documents, such as, an advanced health care directive and durable power of attorney. if you have any questions please do not hesitate to contact us.
Coastal Pacific Law attorneys are experienced in estate planning, and can help with your estate plan, wills, trust, trust administration, or probate administration. To schedule a complimentary consultation, call (619)786-6563, or fill out a Contact Request Form.
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact an attorney directly.
Photo by Kendall Lane