Estate planning is a broad puzzle with many pieces, so it’s not surprising that many Californians are confused about it. California Estate Planning Attorney Neal E. Bartlett and his team at Island View Law are accustomed to fielding many client questions and providing easy-to-understand answers. Here, he offers straightforward answers to the top CA estate planning questions he receives.
You may still need a trust if you have a will for several reasons. One important reason is that trust prevents you from being subject to probate, and a will does not. Additionally, a trust can help manage and distribute your assets according to your wishes while providing privacy and often greater efficiency than the probate process.
You should consider placing your real estate (primary residence, rental property, vacation home), bank accounts, brokerage accounts, investment accounts, business interests, loans, and digital assets in a trust. Retirement accounts, life insurance, and any other accounts with designated beneficiaries do not need to be in a trust because they are already not subject to probate. Just be sure your beneficiaries are alive, and the accounts are up to date.
We do not recommend using a trust to avoid a will. Your will allows you to appoint guardians for your minor children and express your wishes for other aspects of your funeral and estate. We do recommend creating a pour-over will that becomes effective at your death and acts to catch any assets you failed to put in your trust. These assets are automatically “poured" into the trust to avoid probate.
The probate process in California is costly, lengthy, and a matter of public record. Your heirs will be saddled with exorbitant probate fees and forced to wait up to a year or more to receive their inheritances. They are at the California court's mercy; anyone interested can access the records and know who received what from your estate. Attorney Neal Bartlett can help you create an estate plan with practical tools to help your heirs avoid the pitfalls of probate.
Current federal tax regulations that set lifetime exemptions for federal gifting and estate taxes will expire at the end of 2025, so some may wonder about adjusting their estate plans. However, the latest word from the Treasury Department and the Internal Revenue Service affirms that “individuals taking advantage of the increased gift and estate tax exclusion amounts in effect from 2018 to 2025 will not be adversely impacted after 2025 when the exclusion amount is scheduled to drop to pre-2018 levels.”
This essentially means any gifts in your estate plan nowwill not be taxed even if they exceed the new reduced levels after 2025.
Yes, you still need an estate plan even if you don't havesignificant assets. One important reason is that if you were to becomeincapacitated, such as falling into a coma, without estate planning documents,your family would have to go to court to obtain a conservatorship over you.This process is costly, time-consuming, and stressful for your family. So,having an estate plan in place is essential for everyone, regardless of thesize of their assets.
An estate plan also gives you control over what assets youpossess instead of leaving these decisions up to strangers in the Californiaprobate court.
Reviewing your estate plan every 3 to 5 years is a good practice. However, you may need to review it more frequently if certain life events occur, such as a significant change in net worth, change in state of residence, the birth of a child or grandchild, marriage or divorce, changes in federal or state laws covering taxes, and death or change in circumstances of the people named to serve as executor under a will, guardians, trustees under a trust, and agents under powers of attorney.
California Estate Planning Attorney Neal E. Bartlett has the experience and knowledge to help you create and maintain a strong estate plan that avoids probate and protects your interests. Contact Island View Law at our Carpinteria, California, office to schedule a FREE initial consultation.
