Frequently Asked Questions
Following are some commonly asked questions about the process of creating an Estate Plan. If you should have any further questions, please don't hesitate to contact our office and we will be more than happy to set up an appointment to discuss them with you!
Why do I need an Estate Plan?
What exactly is Probate? Why is this something to avoid?
What’s the difference between a Will and a Revocable Trust?
When should I make an Estate Plan?
How often should I review my Estate Plan and make changes?
How can I make sure my wishes regarding my health are known and followed if I’m somehow unable to express them myself?
Can I assign someone to handle my financial matters if I am unable to take care of them?
I have a child with a disability. How can I make sure that they are taken care of when I’m gone?
What documents do I need to bring in order to create an Estate Plan?
Once I make a Trust, can I make changes to it?
Can’t I just get software to make my own Trust?
How do I contact your office?
DISCLAIMER
Why do I need an Estate Plan?
Everyone needs an estate plan. What kind of estate plan you need depends on the type and amount of assets you have. Pairing up a proper estate plan with your needs will allow for a smooth transition in the on-going management and/or distribution of your assets to your loved ones. It can also help you avoid estate tax consequences and additional legal fees associated with the probate of your estate upon your death.
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What exactly is Probate? Why is this something to avoid?
“Probate,” also known as “estate administration,” is the process by which the estate is administered through court proceedings when there is only a Will, or if the decedent died “intestate,” without a Will. The court then determines the rights of all the parties, including beneficiaries, creditors and tax authorities. When a person dies intestate, it is state law that determines their heirs, which may or may not necessarily follow the decedent's wishes. Probate is not only a time consuming process that can take anywhere from 1-5 years (even longer under certain circumstances), but the cost in attorney and executor’s fees can also be up to 8% of the total estate. Additionally, if there are any extraordinary services performed there could be even more costs when all is said and done.
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What’s the difference between a Will and a Revocable Trust?
A Will is a document that allows you to specify what you want done with your assets upon your death. It allows you to name your executor and to designate a guardian for your minor children. A Will becomes a public document when it is submitted to the court for Probate. If you only have a Will and assets over $100,000, the Will must be submitted to the Probate Court.
A Revocable Trust is a private document that allows you to avoid probate of property, the legal fees and expenses associated with probate, and to provide for property management or disbursement, thereby eliminating time delays in settling the estate. It also allows beneficiaries to have an uninterrupted flow of income and access to principal funds and saves the decedent's loved ones the emotional distress of having to go through an extended probate process. It also protects individuals, who are U.S. Citizens, from federal estate taxes up to $3,500,000 and married couples up to $7,000,000 million (current as of 2009).
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When should I make an Estate Plan?
It is important that you make an Estate Plan as soon as possible, regardless of the size of your estate. A comprehensive Estate Plan is important, not just for those who have assets over $100,000 and are looking to avoid probate; it can also let you to make advance decisions while you are alive with regard to matters including health care, finances, designation of a conservator, and/or guardian of minor children. It will also allow you to choose for yourself how you would like to dispose of your assets.
Even small estates of under $100,000 that include real property are subject to a simplified probate procedure. However, this can be avoided with proper planning.
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How often should I review my Estate Plan and make changes?
I would recommend you review your Estate Plan every couple of years, particularly if there have been any significant life changes. These include: births, deaths, purchase of real property, or other events affecting any interests in your estate plan.
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How can I make sure my wishes regarding my health are known and followed if I’m somehow unable to express them myself?
Having an Advance Health Care Directive (AHCD) will allow you to make your desires known with regard to medical decisions, including your wishes regarding the use and withdrawal of life support equipment and organ donation. It is important to have an AHCD in place as it allows you to designate who you would like to make medical decisions on your behalf should you be unable to do so. Moreover, under regulations such as the Health Insurance Portability and Accountability Act (HIPAA) medical providers are not allowed to provide a patient’s medical information to non-designated individuals. If you become ill and you do not have an AHCD in place your family may be denied access to any of your medical information, including status on your condition, state of mind and medical treatment.
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Can I assign someone to handle my financial matters if I am unable to take care of them?
Having a Power of Attorney will allow you to designate who you would like to make financial decisions for you if you are unable to do so for yourself. This document is only effective while you are alive. Often, when a person becomes incapacitated, family members will try to step in to take care of any bills that need to be paid, etc. Unfortunately, they are usually discouraged to find that financial institutions will not recognize a person attempting to take care of such matters when they do not have a Power of Attorney.
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I have a child with a disability. How can I make sure that they are taken care of when I’m gone?
A disabled person may be eligible for public assistance. If your child is currently receiving government benefits for his or her disability, these benefits will only provide for your child’s most basic needs. These programs have strict requirements regarding the amount of assets and income your child may hold while receiving benefits.
Therefore, a straight inheritance amount from you could exceed these restrictions and cause a loss of
benefits for your child. A “Supplemental Needs Trust,” also known as a “Special Needs Trust,” is a type of trust that can be prepared to set aside money, in the control of a trustee, for the sole benefit of your child. It is specifically set up to supplement, not replace, the government benefits your child receives and the trustee is directed not to pay any amount to your child that would cause a loss of his or her benefits.
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What do I need to bring you in order to create an Estate Plan?
The documents you will bring depends upon your estate planning needs and the types of assets that you own. During our initial consultation we will discuss what would be the best Estate Plan for you and determine how to best accomplish those goals.
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Once I make a Trust, can I make changes to it?
After a Revocable Trust is prepared, it may be revoked or amended at any time according to the terms of the trust. Whether a Revocable Trust is the right Estate Plan for you will depend on the quantity and type of assets you have.
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Can’t I just get software to make my own Trust?
A quick internet search will come up with a number of software programs, books and forms that will tell a buyer how to prepare their own Trust for a fraction of the cost of having an attorney prepare it. The problem with purchasing such items is that each person’s life situation and assets are unique. Without a licensed attorney asking the right questions, and making a proper evaluation to determine what specific provisions should go into your trust, there is no way to confirm that the document is properly drafted and that your wishes can be carried out after your death. Moreover, failure to have even a single provision properly included and/or drafted could lead to significant tax consequences or a defective document that could subject your loved ones to costly and lengthy probate litigation.
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How do I contact your office?
I am available for a free initial consultation. Please contact me at 818-884-9700. My goal is to make the process of creating an Estate Plan cost effective, straightforward, and as painless as possible.
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DISCLAIMER
Julie Clary is licensed to practice law in the State of California only. Please note that all answers are based on California law and practice which may not be applicable to people located in other states. The information provided on this FAQ page does not constitute legal advice and is for informational purposes only. Each individual’s situation is different. Please do not rely upon these answers to solve your or someone else’s problem. You should consult an attorney for individual advice regarding your own situation.
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