Basic estate planning serves to accomplish three main goals: (1) to develop a “game plan” as to how the estate should be administered and distributed at death; (2) to minimize estate tax; and (3) to avoid probate.
Developing a Game Plan
California provides a set of rules which apply when a person dies without a will (these are known as the “intestacy” rules). Basically, the intestacy rules apply by default when a person dies without an estate plan.
At Lewis-Traut & Ruswick, APC we recommend hiring qualified estate planning counsel to create a customized estate plan. Some things to consider when creating a customized estate plan or “game plan” are: (1) when would it be appropriate to transfer assets to heirs, and (2) who will oversee the transfer and administration process.
The documents most often associated with the estate planning process are the revocable trust and last will and testament.
Naming the Players
Perhaps the most important estate planning decision is determining who will manage assets and who will care for minor children at death. Without a properly documented estate plan, it is possible that someone other than a preferred guardian could be granted guardianship of any minor children.
Take Advantage of Tax Breaks
Without proper planning, married couples can “lose” many hundreds of thousands of dollars in estate tax credits that might have been otherwise available. This is because, without proper planning, the tax credits that would have been otherwise available at the death of the first spouse, can become permanently lost. A properly drafted estate plan can take advantage of all of the available tax credits and deductions.
Even though it is possible for an estate to be distributed to one’s children (or other beneficiaries) without an estate plan, probate is often necessary before title to any real estate or assets over a certain dollar amount can pass to a beneficiary. Probate is a long and costly court process that can take years to complete. With proper planning, the time delays, court fees, statutory attorney fees, and statutory executor fees that can greatly diminish the value of an estate can be eliminated.
Lewis-Traut & Ruswick, APC
949 South Coast Drive, Suite 555
Costa Mesa, CA 92626
Phone: (714) 581-8808
Fax: (714) 581-8809
LET’S BEGIN YOUR PLANNING