Happy New Year! Let’s start the new year with a review.

In California, a comprehensive estate plan includes a living trust, a pour-over will, a financial power of attorney, and a healthcare directive.

A living trust is not for wealthy people only; a trust is really for anyone who has more than $184,500 (right now; this number changes) in assets to avoid probate. It’s for anyone with minor children to make sure that they get your stuff how and when you want.

Probate is the name of the court that gets involved. (You know about criminal court and family court; probate court is just another one.) If someone is incapacitated and doesn’t have a power of attorney (financial or medical), then a loved one goes to probate court to get the right to make those decisions. If someone dies with ONLY a will OR no will, then probate court is tasked with figuring out assets, debts, and transferring title. It takes a really long time (18-24 months) and is expensive. The cost is based on a percentage of gross assets. (E.g. if you have a house that’s worth $750,000 and about $200,000 in life insurance and $50,000 in your bank accounts, then you have $1 million in gross assets, and the fee is $23,000 for the executor AND $23,000 for the attorney!)

Establishing a living trust gets you out of probate. It’s a private document, not filed anywhere. It’s administered privately. In real life, the trust is just a stack of papers that explains what you want to happen and how to make that happen. It uses your social security number; there’s no separate TAX ID number.

Can you use an online provider to create all this? Please don’t. Talk to an attorney to make sure that it’s done correctly and in the best, most efficient, cost effective way for you and your family.

Contact me today for a complimentary consultation!