Posts Tagged ‘probate’
The decision to keep assets separate may be guided by a number of personal values. Common reasons to maintain separate property include a desire to protect assets from possible loss in divorce, maintain financial independence from a spouse, control the flow of inheritance, or to have general autonomy in relation to assets that belonged to one spouse prior to marriage or were inherited or gifted family assets.
If those considerations are not important to you, the single biggest advantage of “commingling” or turning assets into community property is the double step up in basis for capital gains purposes. Assets are commingled by putting both names on the title to the asset, and/or merging bank or brokerage accounts into joint community property accounts.
These community property assets will receive a full step up in basis at the death of the first spouse. This allows the surviving spouse to liquidate real estate or securities following the death of the spouse without paying capital gains.
Property that is kept separate, but is inherited by the surviving spouse through a trust or pay on death designation will also receive a step up in basis. However, those assets held as the separate property of the surviving spouse maintain their cost basis without any adjustment due to the death of the deceased spouse. Gains tax will be owed if an appreciated asset is sold by the surviving spouse from his or her separate property.
I’m all for a good do it yourself project. I recently refinished a coffee table and attempted to make a slipcover for the chair my cat destroyed. But I wouldn’t recommend doing your estate plan yourself.
I might be a tad biased considering I am an estate planning attorney, but the chances of making a mistake are high and the consequences of those mistakes could be huge. Most DIY estate planning resources are one-size-fits-all, and you may recall me saying, estate plans are not.
When it comes to estate planning, details matter. If you make a drafting error or if your will is not witnessed properly, your documents could be invalid. If you have drafted a trust but the trust has not been funded, it will not work the way it was designed to work.
Add to that, common complications associated with a second marriage or a child with special needs, and the possibilities for error increase. The decisions you make in an estate plan can have unforeseen and unintended consequences. An experienced estate planning attorney can help avoid those pitfalls and achieve your goals in thoughtful manner.
Conservatorships involve a number of steps that can be difficult to manage without experience. There are many different forms that must be completed and filed with the Court to request appointment of a conservator, as well as deadlines that must be met and procedural steps to follow. There are state laws that apply in conservatorship proceedings, contained in the California Probate Code, and there are also local rules which vary from county to county. Many local rules dictate the procedural steps and timeline that must be followed. A conservatorship attorney will be able to help you navigate the process and people involved, such as the Court Investigations Unit, Probate Examiner and ultimately the Superior Court Judge who hears your case. It is his or her job to make sure that you do everything in the correct manner to achieve the best possible outcome.
If you are seeking to have yourself appointed as the conservator, the conservatorship attorney will also help you understand the responsibilities that you will have as a conservator and the rules that you will be required to follow once appointed. Conservators have ongoing requirements to provide information to the Court and to certain individuals. A conservatorship attorney is in the best position to help you keep track of and fulfill these requirements.
The conservatorship attorney can also help you address any concerns of family members, friends or others who might disagree with your decisions or actions. Sometimes the role of conservator can feel like it has a public relations aspect. When communication is planned thoughtfully with the help of your attorney, it can go a long way to keeping all family members, case coordinators, Court Investigators and other interested parties happy with your efforts.
We all understand that “we can’t take it with us” but determining the best way to leave our things behind can be confusing.
Both a will and a trust allow you to choose who receives your assets after you die. A will also allows you to nominate a guardian for your minor children. For most of us, the main benefit of a revocable living trust is that it avoids the expensive and time consuming process called probate (I’ll talk more about probate in my next post). For the very wealthy a trust can also avoid or minimize estate taxes. A trust also allows you to plan for your incapacity and to provide for a child with special needs after you are gone. A will can be used as a stand alone document without a trust. However, a trust is used in combination with a will. In this situation the will is sometimes referred to as a pour over will and it serves as a back up plan in the event that some or all of your assets have not been placed in your trust.
If your estate is small (under $150,000) you might not benefit form a trust, because small estates are exempt from probate, but money isn’t the only consideration that’s why it’s so important to consult with an estate planning attorney to determine which type of plan is best for you.
“The only thing you take with you when you’re gone is what you leave behind” –John Allston
There is a common misconception that only wealthy people need estate plans. The reality is that most people need an estate plan, but not everyone needs the same estate plan or benefits from one in the same way.
Although an estate plan typically includes four documents; a Revocable Living Trust, a Will, A Durable Power of Attorney for Management of Property and Personal Affairs (DPA) and an Advance Health Care Directive (AHCD), estate plans are as unique as the people who create them. They are definitely not one size fits all.
For a family with modest assets a good estate plan is especially important because it can help them pass more of their assets to their loved ones by avoiding the expense and time associated with probate proceedings.
The most important part of an estate plan is not the estate, it’s the plan.