​
FREQUENTLY
ASKED QUESTIONS
ESTATE PLANS
Do I Need a Power of Attorney?
When it comes to planning for the future, many people focus on drafting wills and trusts to ensure their assets are distributed according to their wishes after they pass away. However, an often overlooked but equally crucial component of estate planning is establishing a financial power of attorney. This legal document grants someone you trust the authority to manage your financial affairs if you become unable to do so yourself due to illness, incapacity, or absence.
TRUSTS
Why Do I Need a Revocable Living Trust?
There are two primary reasons that a Revocable Living Trust fits most estate planning needs. First, a revocable living trust will allow an estate to avoid probate and probate fees. Probate fees can be substantial; for example, probate fees can exceed $30,000 for an estate with a gross value of $1,000,000.00. Second, trust administration is usually simpler, faster and more private than estate administration through a public probate process. We are frequently asked if managing assets through a trust is more complicated than not doing so. The answer is no, assets held in a revocable living trust are managed the same way that assets that are not in a trust are managed. Assets are transferred into the name of the trust, and from that point on are accessed, spent, saved, moved just as the assets were before the transfer. Because establishing a revocable living trust is a wise decision for the vast majority of Californians and Nevadans, revocable living trusts are very common and nearly all banks and financial institutions are completely familiar with the trust method of holding assets and are very accommodating in helping clients to change title to their assets.
PROBATE
Why Avoid Probate?
If you die without an effective estate plan in place in California or Nevada , your estate will need to be administered by the state through a process called probate. Probate is the legal process of passing property from a deceased person to their beneficiaries or heirs. A personal representative, an executor, if named in the will, or an administrator, if appointed by court, will be approved by the court to probate the decedent’s estate. The personal representative’s duties include notifying all creditors of the decedent’s death, filing an inventory and appraisal listing all assets, and the court-appointed referee will appraise the assets. The personal representative also must file the decedent’s tax returns and pay any taxes from the estate. Lastly, the personal representative will file a final petition for probate along with a final accounting and if the court approves, a final order of probate is entered. The probate process can be very cumbersome, time-consuming, public and expensive. A properly created estate plan can avoid the process in its entirety and save the decedent’s beneficiaries a great deal of time and money. Probate fees are one of the biggest disadvantages of going through the probate process. The probate code provides for a sliding scale for attorney and administrator fees. For example, California Probate Code Section 10810 provides that the attorney for the personal representative shall receive fees equal to 4% of the first $100,000 of the estate; 3% on the next $100,000; 2% of the next $800,000; 1% on the next $9,000,000; 0.5% on the next $15,000,000; and a reasonable amount to be determined by the court for all amounts above $25,000,000. The personal representative is also entitled to fees in the same amount. These funds come directly out of the estate and does not go to the family or heirs, which is where it would have gone if a proper estate plan would have been drafted.
GUARDIANSHIPS
Do I Need to Nominate a Guardian for My Children?
As parents, we prioritize our children’s well-being and future at every turn. Yet, amidst the hustle and bustle of daily life, one crucial aspect of planning for their future often gets overlooked: nominating a guardian. While it’s not a pleasant topic to dwell on, designating a guardian for your children in your estate plan is a responsible and loving decision that ensures their care and upbringing according to your wishes, should the unexpected happen.