Part Three of a three part series
This is the final part of a Three Part series intended to address the misconceptions I hear most often while advising clients about estate planning. This blog will clarify some of the misconceptions and myths, but for any others “facts” about estate planning you may have heard, please call an estate planning attorney or attend one of our presentations.
Misconception. Paying an Attorney To Make a Trust is Expensive
Truth. Like any other service provided by a professional, the price of creating an estate plan will vary from one attorney to another. Most attorneys will create a simple trust with a few properties and accounts for a reasonable price. If you find that you are unable to afford the price, ask if the law office will work out a payment plan with you or give you a discount. Keep in mind that once your property enters probate, it will be bound by the statutory fees that are fixed by the government, so your estate may very well end up paying much more if it has to go through probate, than what you would pay to an attorney to create a trust for you.
Misconception. It Is Complicated To Maintain A Trust
Truth. While funding your trust is an important step, it is not very complicated. When you first form a trust, you will have to visit the banks where you hold accounts and transfer those to your trust. You will need to transfer your properties into your trust via deeds. Once your initial transfers are complete, you can simply open any future accounts, insurance policies, and pensions under the trust name. The attorney that forms your trust can likely assist you with the initial transfers for a nominal fee.
Misconception. I Can Copy My Friend’s Trust and Do It Myself Or Have An Online Service Create A Trust For Me
Truth. A Trust is an agreement and roadmap to your future wishes and desires, and a vehicle to ensure that you and your children can easily access your hard-earned assets. Each family is different, their needs, assets, and hopes for future generations are different. An online service or copying a pre-made trust that is not customized to your family’s needs and desires may get the job done, but will not provide you the benefits, flexibility and accuracy that an attorney can. As mentioned in the previous post, when you meet with an attorney, she will most likely create a complete estate plan that anticipates any future needs and emergency circumstances within your family, including a trust, health care documents, and financial documents, which an attorney can assist with on a case-by-case basis.
For any other questions you have about estate planning, please contact our office!
Part Two of a three part series
This is Part Two of a Three Part series intended to address the misconceptions I hear most often while advising clients about estate planning. This blog will clarify some of the misconceptions and myths, but for any others “facts” about estate planning you may have heard, please call an estate planning attorney or attend one of our presentations.
Misconception. People Only Form Living Trusts For Tax Purposes.
Truth. While some families are concerned about estate taxes that may be imposed on their estate (and therefore, children) after the last spouse passes away, most create Living Trusts to avoid probate. Probate is the legal process through which courts ensure that after your passing, your debts are paid, and your assets are distributed to your family. Creating and funding a trust ensures that your children or other loved ones you leave behind do not have to engage in the process of probate. While there are a lot of other benefits, and yes, a Trust can have tax-related consequences and benefits, an estate plan’s primary purpose for middle-class families is usually to avoid probate and ensure continuity of care and use of assets for family members.
Misconception. I Have A Trust That Is Signed and Notarized. I Don’t Need To Do Anything Further.
Truth. A Trust, in and of itself, does not protect all your assets from going into probate. In order to avoid probate, you must continue to fund your trust. This means informing your bank and other asset-holders that you have formed a Trust and need to put assets into your Trust. If you have real property, you will need to transfer the ownership to the Trust as well. While your Trust is active, you need to continue to fund your Trust when you open new accounts or acquire major assets. An estate planning attorney can further advise you about this.
Misconception. We Do Not Have Children Or Anyone Else to Leave Our Assets To, So We Do Not Need an Estate Plan.
Truth. If you have worked hard for your life-earnings and savings, it makes sense that you should do with it as you please, even after you are no longer able to use it personally. You can make sure your pets are taken care of after you pass, or you can leave your assets to one or more charities. There are countless options for you to ensure your assets are used according to your wishes and instructions. However, a good estate plan encompasses all aspects of your life, not only your assets. As a part of a comprehensive estate plan, your attorney can create Health Care Directives, Powers of Attorneys and other documents for you. An estate planning attorney can discuss your options with you on a case-by-case basis.
This is Part Two of a three-part series. Stay tuned for Part Three, which will be published on this page by March 10th, 2015.
Part One of a three part series
When I meet individuals and families to discuss their estate planning needs, I often hear misconceptions and misunderstood facts. This blog will clarify some of the misconceptions and myths, but for any others “facts” about estate planning you may have heard, please call an estate planning attorney or attend one of our presentations.
Misconception. Young Couples Can Not Benefit From An Estate Plan.
Truth. Young couples with assets and children can in fact benefit from an estate plan. A well drafted estate plan, especially a trust can ensure that your children are taken care of, should something happen to you. You can appoint people that you trust to manage your property, and nominate guardians for your children. Estate Planning is especially useful when you have young children so you can ensure that your wishes, desires and legacy pass on to them if you are not around.
Misconception. I Have A Will So My Family Is Protected.
Truth. A Will does in fact allow a person to name executors after their death. However, if your property exceeds are certain dollar amount in the State of California, your executors may have to file for Probate, which is a court-supervised process for transferring assets to the beneficiaries listed in one’s will. Not only can Probate be expensive, but it also takes time, during which your beneficiaries may be unable to use your assets. And if you are incapacitated, a will cannot be used to ascertain your desires, nor can it be used by your family members to access your assets. A durable power of attorney for property management can be used in such circumstances.
Misconception. My Husband/Wife And I Have Joint Accounts And Community Property Ownership Instead of Having An Estate Plan.
Truth. Joint ownership is a good idea and works well if something happens to one of two partners. However, if both spouses pass away, or one becomes incapacitated, joint ownership cannot stand in lieu of having an estate plan. In certain situations, courts may appoint a conservator to manage your assets if you are incapacitated or not competent to make financial decisions. A well-crafted estate plan allows you to nominate a conservator that you trust.
This is Part One of a three-part series. Stay tuned for Part Two, which will be published on this page on February 25th, 2015 and Part Three, which will be published on this page on March 4th, 2015.