Frequently Asked Questions: A Roundup

Here are some frequently asked questions about estate planning in California:

1. What is estate planning?

Estate planning involves making arrangements for the management and distribution of your assets after your death or incapacity. It typically includes creating wills, trusts, powers of attorney, and healthcare directives.

2. Do I need an estate plan in California?

Yes, having an estate plan is crucial regardless of the size of your estate. It ensures that your wishes are followed, minimizes potential disputes among beneficiaries, and can help reduce estate taxes and probate costs.

3. What documents are included in an estate plan?

A typical estate plan in California includes a living trust (also called a revocable trust), will, durable power of attorney (also called a financial power of attorney), advance healthcare directive (also called a healthcare power of attorney), and a HIPAA authorization form.

4. What is the difference between a will and a trust?

A will outlines how you want your assets distributed after your death and appoints guardians for minor children. A trust, on the other hand, can be used to manage assets during your lifetime and after death, avoiding probate, providing greater privacy, and allowing for more flexibility in the timing of certain asset distributions.

5. What is probate, and how can I avoid it?

Probate is the name of the court that handles the legal process when there is ONLY a will OR no will at all. In California, it can be time-consuming and expensive. You can avoid probate by creating a living trust and properly funding it with your assets.

6. Who can be the executor of my will or trustee of my trust?

You can choose anyone you trust to be the executor of your will or trustee of your trust. It's often a family member, friend, or professional fiduciary. Make sure the person or institution is willing and capable of handling the responsibilities.

7. How often should I update my estate plan?

It's advisable to review your estate plan periodically, especially after major life events such as marriage, divorce, birth of a child, or significant changes in assets. Generally, it's recommended to review your plan every three to five years.

8. Do I need to worry about estate taxes in California?

California does not have its own estate tax, but it does adhere to federal estate tax laws. If your estate exceeds the federal estate tax exemption threshold (which is quite high), your estate may be subject to federal estate taxes.

9. Can I make changes to my estate plan if my circumstances change?

Yes, you can and should update your estate plan as needed. This can involve making amendments to existing documents or creating new ones to reflect your current wishes and circumstances.

10. Do I need a lawyer to create an estate plan in California?

While it's possible to create some basic estate planning documents on your own, consulting with an experienced estate planning attorney is highly recommended. I can ensure that your documents comply with California law and that your wishes are properly expressed and carried out, and I will ask you all the questions you don’t think to ask yourself! Contact me for a complimentary consultation.