Estate Planning FAQs

The Estate Planning FAQs span multiple pages. You may either browse through the pages by clicking the link at the bottom of each page, or for quick reference to a particular section, click on one of the links below.

1. What is Estate Planning?
2. What Documents Are Part of an estate?
3. What Are Some Estate Planning Tools and Techniques? (part 1) (part 2)
4. What About A Revocable Trust?
5. I’ve Heard of an AB Trust, What Does That Do?
6. What are my Options if I Want an Irrevocable Trust?
7. What About Estate Taxes?
8. What About Other Fees and Costs?
9. My estate is Really Pretty Small Must I Still go Through Formal Probate?
10. What Does Estate Planning Cost?
Estate Planning Package

1. What is Estate Planning?

Remember estate planning is more than simply writing a will. Indeed, it is more than just planning how to distribute your property at your death. True estate planning also plans how to manage your property while you are alive in the event you cannot do it yourself. Additionally, when we assist you in estate planning, it provides for your personal and health care if you cannot.

A good estate plan is one that does the most, both providing for you while you’re alive and preserves the maximum amount of wealth possible for the intended beneficiaries after your death.

2. What Documents Are Part of an Estate?

Generally, the legal documents we recommend for your estate plan are the Revocable Living Trust, the Pour-over Will, the Durable Power of Attorney for Property Management, Authorization to Release Health Care Information to Agents under HIPPA and California Law, the Advance Health Care Directive. However, since personal and financial situations vary from client-to-client, we never make any specific recommendations until we meet with you during an initial consultation.

3. What Are Some Estate Planning Tools & Techniques?

A. GIVING YOUR ASSETS AWAY:
Techniques used to avoid estate taxes involve various different scenarios. The two most powerful techniques are appropriate use of yours and your spouse's lifetime exemption, and the use of yearly gift exemptions, (currently $12,000 per person gifted.) One of the simplest techniques people can utilize is making annual gifts to their loved ones. If these gifts fall under the $12,000 exemption, no estate or gift tax has to be paid on the transfer. However, many people feel uncomfortable with this technique because they do not like giving up control of their funds or they are concerned with the "financial sense" of those they are gifting to.

B. WILLS
A will is less complicated and less expensive to establish than a revocable trust and, once executed, it does not require the transfer of assets to be effective. It is easy to amend when the testator's circumstances change, either by revoking and replacing the entire will, or by executing a codicil to the will.

The simplicity of a will may make it the most suitable alternative for clients who are not concerned with estate taxes or providing for spousal transfers. For example, an unmarried person who owns real property and does not care about probate costs may choose to continue holding title solely in his or her name and to have it pass under a will, thus avoiding the cost and effort of establishing a trust. When presented with the probate costs, however, many unmarried clients will decide to create a revocable trust.

Many clients find the primary disadvantage of a will is that it may require formal probate administration. A will filed with the court, as required or offered for probate becomes a matter of public record. Not only are the terms of a probated will public, but so is the inventory and appraisal of estate assets. Probate administration requires court supervision, and thus administration may delay distribution of the assets to the beneficiaries.

C. TRUSTS
A trust is an arrangement in which the time for enjoyment of property is divided. This is most commonly done by giving one person use of the property for a period of time, such as for life, and designating another person (the remainder beneficiary) to receive the property at the end of that period. The person setting up the trust is referred to either as the "settlor," "trustor," or "grantor." The person administering and distributing the trust property is the trustee.

If the settlor has the ability to change the trust provisions, it is a revocable trust. This is the most common type of estate planning trust for small and medium sized estates. However, if there is no power to amend the trust and the settlor permanently relinquishes most rights to control the property, it is irrevocable. Usually an irrevocable trust is created primarily for tax reasons and to insulate the assets from the reach of creditors.

If the trust is operative during the settlor's life, it is an inter vivos trust.