Trust and Estate Planning


Estate planning is not just for the wealthy - if you have children, own a home or have even minor savings stashed away, you should take steps to make sure you and your family are protected. We can help! 

Estate planning involves the creation of wills, trusts and other documents that help ensure your estate is distributed according to your terms, to help avoid probate issues, and to help minimize estate taxes where possible. These may include, but are not limited to: 

  • Revocable Living Trust

  • Irrevocable Living Trust

  • Last Will and Testament

  • Pour-Over Will

  • Statutory Power of Attorney

  • Durable Power of Attorney

  • Living Will/Advance Health Care Directive

  • Medical Authorization Release Form - as required by HIPAA laws

  • Certificate of Trust

  • Assignment of Personal Property

  • Assignment of Stock, Business Interest or other property

  • Deed Transfers

  • Personal Property Memorandum

  • Community Property Agreement

  • Guardianship Nomination - to protect your children by ensuring that those you want will care for your children if you are unable (and that those you do not want will be prevented).

Why is it important to consider setting up a trust? 

There are a number of reasons why most people want to strongly consider setting up a trust, or at least some form of estate plan. Here are a few of the most important and most commonly applicable:

To Avoid Probate:

The probate court in California is diffult (to say the least), expensive, and time-consuming. For anyone with real property (meaning a house or land) worth over $50,000 OR total assets worth over $150,000 (meaning the value of everything you own), probate is required. While there are a few exceptions based on how property is titled or whether beneficiaries are designated, assets are not always titled as you may think, or want, in order to avoid probate. 

This applies to married couples in particular, who often own their home as joint tenants or community property with right of survivorship. While this type of ownership helps avoid probate when the first spouse passes, it does NOT avoid probate when the second passes or if both pass at the same time. It also does nothing to reduce or avoid taxes, which can actually be a huge issue, particularly if you have owned your home for some time and the value has increased, or if you are passing property to children or grandchildren.

Furthermore, probate fees are statutorily set, which means they are predetermined by the total amount of assets held in your estate. And when I say total, I mean TOTAL - as in the GROSS value (not the value after any debts or liens). These fees are expensive and do NOT include additional costs for estate taxes, court fees, appraisals, Executor fees, or other costs that often arise during the probate process. 

Let's provide an example: Probate fees currently begin at 4% of the first $100,000 and go to 3% for the next $100,00 after that, 2% of the next $800,000 and so on. That means if your total estate is worth $100,000 upon your death, your estate will have to pay $4,000 in probate fees alone. Because the costs increase with the amount of assets you own, the probate fees only go up the more your estate is worth. Thus, an estate worth $400,000 will incur approximately $11,000 in probate fees, and a $1 million estate will incur about $23,000 in probate fees. Again, remember that this does not include fees above and beyond the standard probate fee, and it does include your gross estate. So, if you have a home valued at $800,000 with a $600,000 mortgage, the probate total would be for $800,000 and not $200,000. Also, keep in mind that this is calculated based on your total estate, meaning the value of your equity in your home, your personal effects, vehicles, bank accounts, etc. 

To Ensure Assets are Distributed According to Your Wishes:

Many people believe that if they have a Will, they have ensured that their assets will be passed along according to the wishes outlined in it. Unfortunately, that's not always the case. A judge in your probate matter has the final say, and determines what to do with your estate based upon his or her own interpretation of your Will, arguments made by attorneys or family members, and other factors. A trust, on the other hand, can more effectively ensure assets are tranferred to whom you wish, when you wish, in the manner you wish. Specifically because it is handled by someone YOU appointed, who knows you and is more likely to understand the underlying motives described in your trust.

To Avoid Estate Taxes:

Depending on what the current estate tax is and what your total assets are, this may or may not be importnat. This is particulary true for those in California, as property values are higher than the national average and increase the potential for an estate to fall outside of the estate tax exemption amount.  

To Plan For Incapacity:

It is unpleasant enough to think about death, but somehow even more unpleasant to think about what would happen if you become incapacitated. One of the major differences between a Will and a Trust is the ability to plan for incapacity. Since a Will only comes into play once you have passed, it does no good while you are still living. So, what happens if you are alive but incapable of handling your affairs on your own? If you have no plan in place, then someone (either a friend or family member if you are lucky, or the state if you are not) gets the court to order a conservator for either your person, your finances, or both. 

With a trust, you have the opportunity to plan for your incapacity. You can appoint the person that you want to handle your finances and your health care decisions. Should you become incapacitated (or even if you simply no longer want to be in charge or have to deal with those types of decisions), the agent you have appointed can take over and handle your affairs for you. It can provide a smooth transition and peace of mind, while keeping your information private and out of the court system - something that is not available with a Will. 

There are numerous other benefits involved with setting up an estate plan versus the grueling process of probate, in addition to the costs involved. Here are some, to name just a few:

  • Trusts can offer privacy, whereas a Will is public record;

  • The process of setting up a trust is done according to your schedule, whereas the probate process is lengthy no matter how you approach it;

  • A trust allows for more flexibility and control over the distribution of your assets, whereas there is very little control in probate;

  • If you become disabled with a trust, you have someone you have designated and who knows you handling your affairs privately and as you wish, whereas the probate court will appoint a conservator who reports to the court on a regular basis and does not know about you or your concerns.

Setting up a trust should not be scary, financially or emotionally. That's why we're here - to help you rest easy knowing that your family, your assets, and your estate are taken care of according to your wishes. Go ahead and plan your life. We'll help you protect it.