Estate Planning Tips to Keep Money in the Family

Estate planning for a family is essential to ensure your funds and assets are handled correctly when you pass away or become incapacitated. And, like many people who have spent years building their wealth, it probably upsets you that the government will take a substantial cut of that wealth before distributing it to your heirs.

But it doesn’t have to be that way. A carefully crafted plan will help protect your property, so it passes directly to your beneficiaries.

The Probate Process

There is no inheritance tax in California, and it is only in effect at the federal level on estates valued at more than $12.92 million will have an estate tax.

But what if your estate goes into probate? That is typically a lengthy process that often requires court supervision and involves multiple complicated steps like locating assets and undertaking ownership transfers.

Therefore, California has attorney probate fees based on the estate’s value:

4% on the first $100,000

3% for the next $100,000

2% on the next $800,000

So, a $1 million estate may have a $23,000 attorney probate fee; a number of other fee’s and expenses are chargeable in probate.

The best way to avoid these fee’s is by keeping your estate out of probate, and there are a few ways you can accomplish that goal.

Trusts

Trusts are a common way for people to avoid probate. They are powerful tools in estate planning that can be immensely beneficial. Creating a trust can help ensure your estate passes to your heirs according to your wishes without going through the probate court process.

There are different types of trusts available that may suit particular situations. An irrevocable trust, for instance, is one where the terms cannot be changed once established, whereas a revocable trust allows for alterations of its terms. Other common trusts include charitable trusts and special needs trusts. Each of these serves a specific purpose based on your goals.

Joint Ownership

Joint Tenancy, or Joint Tenancy with Rights of Survivorship, is another arrangement that allows a property to pass directly to co-owners without going through probate court. But it’s important to remember that if your estate plan changes for any reason due to marriage, death, or other circumstances, it is necessary to make modifications accordingly.

Designate Beneficiaries

You can also use payable on death (POD) designations so that your beneficiaries can receive their inheritance promptly without going through the probate process. By setting up a POD designation for your bank accounts, investment portfolios, real estate, motor vehicles, and any other type of asset ownership you may possess, you can expedite the transfer of those assets to your chosen beneficiary or beneficiaries.

Creating Your Estate Plan

There are numerous ways to protect your estate from probate fees, from strategically structuring your assets ahead of time to drafting a will or trust. Our attorneys at Lonich Patton Ehrlich Policastri can provide estate planning advice to ensure money in your family is dispersed according to your wishes.

Contact us for a free 30-minute consultation by filling out our online form here or calling 408-553-0801. Together, we will create a secure future for you and your loved ones.

Disclaimer: this article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.