Protecting Your Assets Through Estate Planning
According to California’s 2020 Court Statistics Report, Superior Courts throughout the state-supervised over 49,000 probate proceedings in the fiscal year ending September 30, 2019. Los Angeles County saw 13,392 probate hearings, while Orange County saw 3,532 probate hearings.
For those who are unaware, probate is a court proceeding designed to distribute a person’s estate upon that person’s death. If there is a will, the court will oversee the settlement of the will. If the person dies without a will, known as dying intestate, the court will decide on the distribution of assets itself.
If you reside in or around Irvine, California, or really anywhere in Los Angeles or Orange County, you can rely on our firm, the Orantes Law Firm, to help you plan for the future so that you can protect your loved ones and help them move forward in life after you pass on. For more than 20 years, people have come to us to create estate plans for every eventuality. Let us start planning your future, today. Call or reach out to our office for a free consultation.
What You Need to
Know About Probate
Probate proceedings can take months — oftentimes longer than a year — and can be costly and emotionally draining for the family and loved ones left behind to deal with probate proceedings. However, probate can be avoided altogether with proper estate planning.
A will is the basic instrument of estate planning, but other legal documents are needed to make sure your family is taken care of after you’re gone. These documents can also ensure that you and your estate are cared for according to your exact wishes, should you become incapacitated and unable to make your wishes known.
The Importance of
We try to tell all of our clients that you can never be too young or too old to plan for the future — but you can be too late if life hands you an unexpected setback and you are no longer able to put your wishes in writing. When you have good health and a clear mind, it’s important to start the process of estate planning so that you can be prepared for what happens to your property and assets when you’re gone. A strategic estate plan can also help you prepare for the possibility that you may end up in a medical facility and unable to make important healthcare decisions for yourself.
These are issues that many people tend to put off because, after all, it can be uncomfortable to make plans for your loved ones after you pass. However, these are issues that affect not only your own future but also the well-being of your loved ones. If you haven’t already started planning, the time to start is now. If you already have a will in place, it’s always a good time to review it and potentially update your estate plan so that you can spare your loved ones the cost and stress of probate.
Wills, Trusts, Directives & Other Estate Planning Tools
Probate, whether you have a will or not, can last anywhere from nine months to a year or more in court, depending on a number of factors that are often beyond your control. For instance, will there be contests to the contents or legality of the will?
Though a will is typically the starting point of estate planning, it is just that — the place where you should begin. If you want to avoid the time and hassles of distributing assets to loved ones in court, you can also consider establishing a living trust.
A Living Trust
Typically in a will, you name a family member or trusted friend to be your personal representative who will become the executor of your will in court. With a living trust, you name a trustee. In both situations, the personal representative and the trustee become the ones responsible for carrying out your wishes regarding your assets. The key difference with a living trust is that the trustee does not have to run everything by a judge. Trusts are settled outside of probate court.
In a living trust, you initially name yourself as the trustee, with a successor trustee also named should you become incapacitated or die. While you are capable, you continue to manage your assets on your own. A living trust — also known as a revocable trust — can be amended or revoked and replaced at any time. Should situations in your life change, you can add or detract assets, change beneficiaries, or name a new successor trustee whenever you please.
While your successor trustee will have the authority to manage the assets listed in your trust, that person will lack authority over assets not included, such as retirement accounts, insurance policies, and sometimes even bank accounts.
Powers of Attorney
You may want to consider assigning the trustee a power of attorney (POA) to manage all of your assets in your place. The POA will also grant the trustee power over your tax return filings and permission to apply for government benefits on your behalf.
Remember, with or without a POA, the trustee has a fiduciary duty to oversee your estate according to your wishes. Even so, it is wise to name someone you trust implicitly.
Wills vs. Trusts
Do you need both a will and a trust? Generally speaking, yes, and especially so if you’re a sole parent with minor children. You can name a guardian for your children in a will, but not in a trust. A will may also become necessary if you acquire assets after creating your trust and neglect to amend the trust to include them. Those assets would have to be probated, and probate is always better with a will than without one.
Advance Healthcare Directives
For matters of your own possible incapacitation, you can create what’s called an advance health care directive. In California, an advance directive accomplishes the dual function of acting as a living will and a medical power of attorney. In the directive, you not only state your medical choices for end-of-life planning, but you also name someone to oversee those choices for you. That person is then given the power to represent your wishes and see that they are carried out if you ever become incapacitated.
In the living will portion, you can name the health care providers and institutions you prefer. You can also consent to or refuse any form of care, treatment, or procedure, as well as state your preferences for resuscitation and artificial nutrition and hydration. You can also authorize an autopsy and the donation of your organs in the event of your death. The person you name with the medical power of attorney will then ensure that these wishes are honored.
Family members cannot override your decisions, so having an advance directive will spare your loved ones from arguing amongst themselves about what they think is best for you, or what you may or may not prefer when it comes to making these types of medical decisions.
Get Help from an Experienced Estate Planning Attorney
At the end of the day, each person is different, so there really is no “one-size-fits-all” solution to estate planning. The instruments discussed above are all essential to a good estate plan, but they need to be written in precise language to ensure they do what they’re intended to do. In addition, there are other legal instruments available depending on the size of the estate and the person’s unique situation.
For instance, if a business is involved, an irrevocable trust may be a useful estate planning tool that can be used to shield or protect assets while you’re alive and when you’re gone. Other types of trusts can be used to distribute assets to beneficiaries while you’re still alive. There are trust options for just about every possible situation.
In other words, the best approach to planning for the future is to consult with an experienced and knowledgeable estate planning attorney. Here at The Orantes Law Firm, our estate planning attorneys can help you create the right plan for your situation. If you live in Los Angeles or Orange County, call us today to get started. For more than two decades we’ve been helping others just like you plan for the future and — and we would be proud to help you too.