FAQ Estate Planning
Can I rely on these answers as legal advice?
No. Individual circumstances can vary, and the law can also evolve and change. These answers provide general information about California law that was current as of drafting them and are not legal advice.
What is estate planning?
Estate planning is the process of deciding, in advance, who will manage your money, property, and health care decisions if you can’t, and who will receive what you own after you pass away. A good plan makes your wishes clear, helps your family avoid court and unnecessary expense, and spares them from guessing what you would have wanted.
Who needs estate planning?
As a general rule, almost every adult can benefit from some form of estate planning, regardless of age, net worth, or marital status. It is especially important if you own a home, have minor children, have a blended family, have a loved one who needs extra protection, or simply have strong wishes about who should make decisions for you. Whether an attorney may be right for creating your estate plan depends on the complexity of your situation, which can include considering the overall value of your assests, your family dynamics, your specific wishes, and other factors.
What are the basic estate planning documents?
A typical California estate plan includes:
- A will: states who receives your property and names an executor. It is also where you nominate a guardian for your minor children.
- A revocable living trust: holds your assets during your lifetime and passes them to your beneficiaries after your death, usually without probate.
- A durable power of attorney: names someone you trust to handle your affairs if you become unable to.
- An Advance Health Care Directive: names someone to make medical decisions for you if you can’t, and records your wishes about medical treatment.
What happens if I die without a will or trust in California?
California’s intestate succession laws decide who inherits, usually your spouse or registered domestic partner, your children, or other close relatives, in an order set by statute. The court chooses who manages your estate, and a probate case is usually required. The result may be very different from what you would have chosen.
What is probate?
Probate is the court-supervised process of paying a deceased person’s debts and transferring their property. In California, probate often takes a year or more, and it is a public process. It can also be expensive, because California sets the attorney’s and executor’s fees as a percentage of the gross value of the estate, before subtracting any mortgage. For example, on a $750,000 estate, the statutory fees alone are typically $18,000 for the attorney and another $18,000 for the executor.
How can I avoid probate?
Common ways to avoid probate in California include:
- A revocable living trust. Assets titled in the name of your trust generally pass to your beneficiaries without probate.
- Beneficiary designations. Retirement accounts, life insurance, and many bank and brokerage accounts can name a beneficiary or “payable on death” recipient.
- A revocable transfer on death deed. California allows this for some real estate, though it is not the right fit for every situation.
- Joint ownership with right of survivorship. This can avoid probate, but it can also create gift tax, creditor, and control problems, so talk to an attorney before adding someone to your title or accounts.
Do I need a trust, or is a will enough?
It depends on what you own and what you want to happen. If your assets would have to go through probate, particularly a home, a living trust is usually the better way to keep your family out of court. A will alone may be enough for some people with few assets, or with assets that already pass by beneficiary designation. This is one of the main questions to talk through with an attorney.
What does it mean to "fund" a trust?
Funding a trust means transferring your assets into it, for example by recording a new deed for your home or retitling bank accounts in the trust’s name. A trust only avoids probate for assets it actually holds. An unfunded trust is one of the most common, and most expensive, estate planning mistakes.
How much does estate planning cost?
The cost of estate planning will vary depending on the complexity of your plan, which can vary depending on your wishes, the makeup of your family, the assets you own, and other factors. However, estate planning is typically a very affordable investment in your future, especially compared with the cost of probate. Fick Law charges a flat fee for estate planning, so you know the cost up front. Estate plans at Fick Law start at $5,000. Your price can vary depending on what your plan needs, and you will know your flat fee before any work begins.
How do I choose an estate planning attorney?
You should choose an attorney you can work well with and trust. Your estate planning attorney will need to delve into the topic of your eventual death,which may be uncomfortable for you. Your attorney may also need to explore awkward and uncomfortable circumstances in your family. You want someone you feel comfortable sharing with, because those potentially uncomfortable topics can significantly impact your estate plan.
How often should I review my estate plan?
As a general guideline, you may want to review your estate plan once per year,and at least every five years. Laws and your circumstances can change. Review it sooner if you experience significant life changes, such as a marriage, divorce, the birth of a child, a move to another state, a death in the family, or a significant change in your finances.
What are some common estate planning mistakes?
- Not having a plan at all. This leaves the decisions to California law and the court.
- Not funding your trust. Assets left outside the trust may still have to go through probate.
- Outdated beneficiary designations. Beneficiary forms override your will and trust, so an old form can send money to an ex-spouse or leave out a child.
- Not updating your plan. Life changes, and your plan should keep up.
- Choosing the wrong executor or trustee. Pick someone trustworthy, organized, and able to handle the job, and name a backup.
- Not naming a guardian for minor children. Without a nomination, the court decides who raises your children without your input.
- Keeping your plan a secret. Your family should at least know that a plan exists, and who to call.
What should I bring to my first meeting?
A list of what you own (your home, accounts, retirement plans, life insurance, and business interests), any existing wills or trusts, the names of the people you are considering for key roles, and your questions.
This page is general information about California law, not legal advice. Every situation is different. Call Fick Law at (916) 209-0282 for a free consultation.