What happens if I never establish an Estate Plan?
Doing nothing is not a good plan. We like to tell our clients, if you don’t have a plan, the state of California has a much more expensive and time consuming plan for you. This is called Probate. During the probate process, the Court will make all two very important decisions: 1) who inherits your assets, and 2) who will obtain guardianship of your minor children’s estate and person.
Why is the Probate Process considered to be so bad?
Over the years we have identified three main complaints people tend to have about Probate:
- The Probate Process is Timely– California’s budget problems have affected the state’s court system. This has created a backlog in the Probate Courts, which has led to Probate matters taking 18-24 months to resolve.
- The Probate Process is Expensive– Here are the current statutory probate fee rates:
- 4% of the first $100,000 of the gross value of the probate estate.
- 3% of the next $100,000.
- 2% of the next $800,000.
- 1% of the next $9 million.
- .5% of the next $15 million.
- The Probate Process is Public– Because the Court’s require certain notices, the publishing of personal information becomes part of public record. Many people seek to avoid Probate to maintain confidentiality and privacy over their personal and financial affairs.
Why Should I establish a Living Trust?
A Living Trust can provide you and your family with many benefits. First, you will be able to avoid the Probate Court Process, allowing your loved ones to save money, time and avoid the headaches associated with the Probate Process. Second, and just as important, you will be able to establish clear directives as to who will receive your assets. Third, a Living Trust may also help you and your family minimize or eliminate estate taxes.