Frequently Asked Estate Planning & Probate Questions
What is estate planning?
Simply put, estate planning is the process of you (or you and your spouse) making the necessary decisions required to put your affairs in order, and memorialize your wishes before you pass away or become incapacitated. In the event of a sudden accident or illness, you can rest assured that your spouse, children, chosen nonprofit organization, or other persons of your own choosing, will receive the assets you would like them to receive.
What is probate?
Probate is the court process of transferring title to certain property and assets after a person has died. Probate property is, generally speaking, all of your assets which are not held in trust, and which do not pass title by some other means, such as joint tenancy or beneficiary designation. If you have no will in place, and your assets are not held in trust, California law will determine who will receive your probate property when you pass. If you have a properly drafted will, your wishes will be stated as to who your probate assets should go to. This can be a complicated process at an already difficult time, and it is wise to seek legal counsel from a knowledgeable, Sacramento probate attorney.
What does the average estate plan include?
In most cases, a complete estate plan will be comprised of a Declaration of Trust – a written document or contract that describes your assets (real property, savings accounts, stocks, bonds, retirement accounts, etc.); a Pour-over Will; a Durable Power of Attorney for Finances; an Advanced Health Care Directive; and, a number of other supporting documents to make your plan complete. A full estate plan provides a detailed list of your specific instructions as to whom you want to be in charge of the administration, how you would like things to be managed, and your wishes regarding who you nominate to care for your minor children and the distribution of your assets.
What is a REVOCABLE living trust?
A Revocable Living Trust is a contract reflecting an agreement regarding the passing of property from one to another. A trust is revocable when it can be revoked, or terminated, by the Trustors. It is living in that it can also be amended by the Trustors during their lifetimes. The Trustor or Settlor is the current owner of the estate or assets. The Trustor is most often also the Trustee initially, and their job is to manage the assets that the Trustors place into the trust. A Beneficiary is usually first the Trustor(s), then a recipient who will inherit the property or assets at the death of the Trustor(s). All of these people, Trustors, Trustees and Beneficiaries, are named by the Trustors in the trust document. A Revocable Living Trust will most often allow your beneficiaries to receive their inheritance directly, without going through the time and expense of court proceedings.
Why should I avoid probate?
You may want to avoid probate because it is usually an unnecessarily complicated, expensive process for the transfer of title of your hard-earned assets. Occasionally, legal battles between family members may cause it to take months, if not years, to settle. After the death of a loved one, filing papers with the court, attending hearings, and dealing with legal battles for years is not something that your loved ones are going to want to focus on. And, it is a waste of your assets that could better be enjoyed by your beneficiaries.
How can I avoid probate?
Establishing a revocable living trust is one of the best ways that you can avoid probate for your family members in the future. You can also do so by having a “payable-on-death” account or by holding joint ownership of property (ex: with your spouse), but you should discuss these alternatives with a knowledgeable attorney before deciding which option to choose, as they each have their own benefits and problems.
What is a will?
There are two main types of will. A pour-over will is a companion document with a Declaration of Trust. A stand-alone will (also known as a last will and testament) is something that describes who will receive your property and assets when you die. Your stand-alone will establishes who the beneficiaries of your estate will be, and allows you to name the executor of your estate, who will carry out your wishes through the court.
What happens if I don’t have a will OR TRUST?
No estate planning at all results in an “intestate estate.” By choosing not to have a will or trust you are allowing your estate to pass according to the laws of the State of California, to your heirs at law. You give up the security and peace of mind of knowing exactly who will receive the benefit of all your hard work, and sentimental valuables. You may also forfeit the benefit of reducing any taxes due at your death.
When should I set up my estate plan?
Whether you are young or elderly, just getting your family started, or have an empty nest, it is never too soon or too late to create a comprehensive estate plan, while you are still able to do so.
Contact Hill Law Offices, PC, today by calling 916-568-0212 for more information!