Estate planning is the process of considering, and creating a plan that allows you to control your property while you are alive, provide for yourself and loved ones if you become disabled, and distribute assets efficiently and effectively (i.e., you give what you have to whom you want, the way you want, and when you want).
Every person has different estate planning needs and goals. While some may be concerned about the distribution of assets, others may be focused on providing for their minor children. Some families may require disability planning, special needs planning, or long term care.
The notion that estate planning is only for the very wealthy is false. Whether your estate is large or small, you can benefit from an estate plan. At the minimum, you should designate someone to manage your assets and make health care decisions for you if you ever become unable to do so for yourself. A basic plan with a will can also prevent the state of California from determining how your assets are distributed and who will be the guardian of your minor children.
A plan involving a revocable living trust will allow your estate to avoid probate, which saves costs, prevents delays, and ensures that your affairs remain private. In California, probate is triggered when the gross value of the decedent’s real and personal property exceeds $150,000. So most people in California who own homes will meet this threshold, which means their estate will automatically go to probate when they pass away unless they have a living trust. Such a plan can also significantly reduce or eliminate income or estate taxes. A revocable living trust gives you control over your hard-earned assets, in case of incapacity and after you pass away. This entity allows you to avoid conservatorship during your lifetime. It protects your children’s inheritances if they are not mature enough to make decisions on their own. A living trust can also pass on your values to your heirs, and preserve your legacy.
Other advanced estate planning objectives may include protecting beneficiaries with special needs, for which a special needs or supplemental trust can be established.
One who wants to continue the tax-deferred growth of their retirement accounts for as long as possible even after their death may opt for a stand-alone retirement trust. This is particularly significant following the U.S Supreme Court case of Clark v. Rameker (2014), which held that an IRA inherited outright by a non-spouse beneficiary is not protected from the beneficiary’s bankruptcy creditors.
If charitable giving is important you, we can establish a charitable trust that carries out your charitable intent, while also offering tax advantages for your estate. We can also provide for the care and maintenance of your pets.
At Tseng Law Firm, we will work with you to create a custom plan tailored to your specific goals and objectives.
Foundational Estate Planning Documents include:
• Will: a written instrument that provides for the disposition of your assets after our death and nominates guardian(s) of minor children; only effective upon your death
• Durable Power of Attorney (financial): a written document giving an individual the legal authority to act on your behalf regarding your finances according to the written terms of the document when you are unfit to do so yourself. You can give such individual as much or as little control over your personal or business finances as you wish.
• Advance Health Care Directive: provides a statement regarding your health care (including end-of-life decisions related to life support measures); provides legal authority for a person to make medical decisions for you if you are unable to make them for yourself
• HIPAA (Health Insurance Portability and Accountability Act of 1996) Authorization: a written document that authorizes your health care provider to release medical information about you to persons other than you or your representative
• Revocable Living Trust: a legal entity that owns and holds assets for you, which can be changed at any time by you. A trust becomes effective when it is created. It ensures that your estate will avoid probate, which keeps your affairs private; allows you to provide for the distribution of your assets when you are incapacitated or after you die, and may reduce or eliminate estate taxes.
• Pour-over Will: same as a Will, except, when used in combination with a revocable living trust, pours over your assets into the trust that may have inadvertently been left out of the trust so that distributions can be made pursuant to the terms of the trust
If you have an existing estate plan, it is important to update it in conjunction with changing laws and circumstances in your life (such as the birth of a child, death of loved one, or purchase of new property). We can review your existing plan, and help you update it.