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Orange County Estate Planning Blog

Avoiding probate with a revocable trust

Before heirs and beneficiaries can receive their shares of a deceased person's estate assets, the estate needs to go through the probate process. This court-supervised process can be long, drawn-out and costly for the estate.

Not only that, but probate proceedings could end up leaving nothing for the intended heirs and beneficiaries. This is why many estate planners seek to protect specific assets from probate through the strategic use of revocable living trusts.

Seniors: Does your estate plan have these 2 important features?

Every adult in California, no matter his or her age, needs to complete a well-thought-out estate plan. This will ensure that -- in the event of an unexpected death or incapacitation -- the days and weeks that follow will be easier on the estate planner's close family members. Having a well-planned estate will also help preserve the inheritance of family members and give them peace of mind.

Although all California residents 18 years of age and older should -- at the very least -- have a basic estate plan set up, the need to have an estate plan becomes more important the older we get. As a senior citizen, here are some of the things you might want to consider when reviewing the completeness of your estate plan:

Will the federal estate tax ever disappear?

If we keep heading in the direction we've been heading for years, the estate tax will eventually disappear and when someone dies, his or her heirs and family members will be able to receive the entirety of the estate without the fear of losing part of it to estate taxes. The "death tax" has existed since 1916. This federal estate tax, after exemptions, charges 40 percent of the value of the estate value that exceeds the exemption.

The exemption, which is currently over $11 million dollars means that only a few of the wealthiest families will be at risk of losing a large portion of their estates in the event of a death. However, the exemption has only recently increased to be so high. In the not-too-distant-pat, families had to worry about federal estate taxes if their estates were only worth $700,000. However, over the years, lawmakers have steadily and doggedly worked to increase the exemption again and again. In fact, it's safe to say that many heirs owe a lot of their wealth to these exemption increases.

Protect your loved ones through your estate after your death

Many people keep their financial matters private, which is understandable. There is one exception to this. When you are creating an estate plan, you need to be forthcoming about your financial affairs so that we can help you find the solutions that can accomplish your goals when you are gone.

As you are making your estate plan, you need to think about how your plans will impact your loved ones. One thing that you need to do is to protect their privacy. Just like you want to keep your finances private, your loved ones might want to preserve that privacy when you are gone. Having to go through the probate process means that some of these matters might be made public record.

Is your estate plan shaky or solid?

Researchers at the University of Pennsylvania determined that only about 30 percent of United States residents spell out their wishes for end-of-life-care. Perhaps even more startling, fewer than half of the respondents in a survey done by had drafted any estate planning documents like living trusts or wills.

The recent death of matriarch Barbara Bush indicated the importance of having a comprehensive estate plan. When Mrs. Bush realized that she was in a terminal decline, she was able to execute her final wishes to end treatment and return home for her final days.

Alan Thicke's widow, sons battle over estate

The battle over the late actor Alan Thicke's estate continues 17 months after his death. The latest controversy involves claims from his widow, Tanya Callau, that Thicke's two adult sons, Brennan and Robin, are reckless in how they spend funds from Thicke's trust.

Callau — who was the actor's third wife — alleges her stepsons haven't yet distibuted her portion of the estate. Thicke's sons are co-trustees of Thicke's estate.

Trusts 101: Basic information you need to know

Estate planning is a mystifying process for some people, but it doesn't have to be. One of the aspects of this journey is to decide if you will use trusts, a will or a combination of both to pass out assets after your death. While it might seem like these are reserved for the wealthy, this isn't the case. No matter what level of assets you have, you should have an estate plan in place.

If you do have assets to pass on to loved ones, friends or other entities, you might want to do so with a trust. Unlike wills, these don't have to go through the probate process so the beneficiary will be able to receive assets faster and with less expense than what might be possible with a will. If you do plan on including trusts in the estate plan, you should have at least a basic understanding of these tools.

Special needs trusts protect eligibility for government benefits

Are you worried about leaving money to a child with special needs because that child depends on government benefits? You know that the gift or inheritance may completely eliminate that eligibility or reduce the amount the person can receive. You want to help cover the costs of care, not make it impossible for the person to get benefits he or she has come to depend on already.

One potential solution is to use a special needs trust. By leaving the money to the trust, rather than to the individual directly, you do not change the size of that person's estate. His or her assets stay the same, so government benefits are not impacted. The rules for Social Security approve this completely legal way to pass assets on without interference.

Can I avoid probate in California?

Avoiding probate is a serious concern for most individuals with any significant estate, especially those who own real estate here in California. If you own a home in California, then you probably exceed the threshold of personal wealth that triggers probate, so it is wise to consider the means you may use to circumvent probate when you pass away, to ensure that your wishes and legacy remain properly protected.

Estate planning employs many legal tools to help a person avoid probate, commonly including trusts and strategic giving. By using a trust, a person may remove property placed within the trust from his or her personal possession, preventing that property from undergoing the probate process. It is important to remember, however, that property placed within a trust likely means that the creator of the trust has limited access to the asset or may lack some forms of control over it.

Establishing guardianship in your estate plan

For a number of reasons, if you are a parent, it is well past time to create an estate plan. Not only do you want to make sure that you leave your children any property you want them to keep, but you also need to make it very clear who you wish to care for your children if you pass away. You'll probably also want to allocate sufficient resources to carry out these duties to the individual(s) you choose as guardians.

Creating a guardianship plan is a heavy task, but one that offers immense peace of mind. While you certainly may not enjoy the prospect of considering your own mortality, knowing that your wishes are clear and that your family has the resources they need in the event that you pass away is crucial. Also, it is important to understand that if you do not specify a certain person as your children's guardian, the state may place them with some other party you would never select.

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