What is Estate Planning?
Estate planning is the process of preparing all legally required documents and providing comprehensive instructions to grant authority to another person allowing them to legally make decisions about your health care and manage your assets, in the event you are unable to do so for yourself. This allows the most cost effective and efficient means to transfer wealth or direct benefits to you or other people and avoid probate of all trust assets.
Why everyone should have a Living Trust and Estate Plan?
Everyone needs a Living Trust to avoid unnecessary court fees, court appointed appraisal fees and excessive attorney fees that are associated with probate. Further, most probate court calendars are booked several months in advance and require technical knowledge of how to prepare each court document and comply with notice requirements as well as, the court appointed appraisal process. It is not uncommon for a simple probate case to take over one year to complete. During this wait time, it is complicated and difficult to manage those assets that are in probate. During the emotional distress of dealing with the death of a loved one, the simultaneous need to deal with understanding and complying with the probate court rules and regulations, makes the process even more difficult.
Why is a Living Trust Preferred over a Will?
A professionally drafted and properly funded revocable living trust avoids probate at death. A Will must go through the probate process, so assets can be verified and distributed by the probate court. By avoiding probate with a customized estate plan, you and your loved ones will prevent tedious, stressful and expensive delays while protecting your assets, privacy and peace of mind.
A professionally drafted and officially funded living trust avoids probate court disruptions if you lose your mental capacity. To have your personal care and assets managed privately by people you choose and trust, instead of being placed in a court appointed guardian requires a professionally executed and properly funded Estate Plan. A Will does not help in a loss of capacity situation because a Will becomes effective only at death.
A Living Trust and Estate Plan puts all your assets together under a complete plan with one set of clear directions for how you want things to occur. This provides you with the ability to easily disburse your assets fairly and exactly as you desire. This avoids the need to balance inheritance with other account beneficiary designations or joint ownership because of fluctuating values of investment accounts, life insurance or the purchase and sale of real-estate during your life time.
A professionally drafted and properly funded living trust provides you with more privacy and greater protections against your assets being contested. A trust is a private document that you share with those you choose and trust. Probate on the other hand is a public process which requires notice to be given to certain relatives and possible heirs. The probate process allows others to file claims to contest your Will and allows others to see your financial information.
What is a Properly Prepared Living Trust? A properly prepared living trust means a trust that comprehensively and clearly addresses each special circumstance in your unique life in a way that is legal recognized because all legal formalities have been met according to the California law.
What is a Properly Funded Living Trust? A properly funded living trust means that the assets that are intended to be controlled by the living trust are correctly titled and effectively recorded with the either the County Recorder’s office or within each individual financial institution depending on what type of asset is involved. A trust that is not properly funded is not effective and will not achieve the objectives it was intended.
What is the Best Way to Make Sure Your Living Trust is Properly Written and Properly Funded? The best way to make sure your living trust is properly written and properly funded is by having an experienced estate planning attorney prepare the trust and guide you in properly funding the Living Trust. By using an attorney over other do-it-yourself options, gives you security that the Estate Plan will achieve the objective that you intend to achieve and avoid probate.
Is a living Trust Expensive? A living Trust is not expensive. Although originally a Living Trust does cost a more than a simple Will, the additional costs associated with the probate of a Will make a Trust much less expensive. Thousands and often tens of thousands are taken out of your assets to pay for the administration of probate even for an average sized estate.
What are the costs associated with Probate?
Some of the fees associated with probate include court fees to file the documents needed for each phase of the process, appraisal fees to comply with probate court inventory process, as well as mounting fees for photocopying and postage needed to mail notices to each possible person of interest, which usually involves several heirs and many creditors, in addition to the time and energy needed to fully identify the location and value of each account or piece of real-estate. For these reasons, a Trust is much less expensive than a Will as well as much less stressful.
What should I expect to pay for a professionally drafted Living Trust and Estate Plan? While the cost of drafting a professional estate, plan can vary greatly depending on where you live and the size of the law firm you select a good way to get the most for your money is by finding a small law firm that specifically focuses on Living Trusts and Estate Planning. Finding an attorney that has a small office and answers his own phone allows the attorney to charge each client less money for each estate plan. A small dedicated law firm not only allows for lower prices it provides you with better service because the attorney is well versed in the specific area of law, as well as dedicated to providing great service because they are not distracted with practicing other areas of law at the same time.
Why is speaking with an Estate Planning Attorney important? Speaking with an Estate Planning Attorney is important because they will identify unseen issues depending on your specific circumstances that you may not be aware exist. It is these unanswered questions that later evolve into huge problems in the future. An estate planning attorney will give you legal solutions and proper guidance to avoid problems now and in the future.
How should I select a Living Trust Lawyer?
Select an attorney that shows they are focused on the art and skill of creating a comprehensive and perfectly tailored Estate Plan based on your specific circumstance. Select an attorney that is reachable. Often attorneys delegate their customer service duties to a paralegal or secretary, finding an attorney that answers their own phone and personally returns messages is a great sign that the lawyer provides you with the best service during the drafting process as well as, in to the future if you may need to make changes or have questions.
Another strong factor in selecting an attorney is finding an attorney who has a family and lives in the area. This gives you a higher assurance that the attorney will be reachable if you were to need further guidance years into the future.
Why should I have an attorney draft my Living Trust Rather than using an automated online service?
While many options exist today, nothing can substitute for an in person meeting with an estate planning attorney. While many services provide for a boiler-plate, cookie- cutter Living Trust, these types of trusts rarely provide what they promise. Rarely, if ever, do these generic one size fits all Living Trusts identify or address the specific and unique circumstances of each person’s family, friends, pets and personal preferences. Also, the language of these generic trusts often times suggest a meaning that can be misunderstood and incorrectly believed to achieve a mistaken purpose. Dealing with an actual estate planning attorney will provide you with a reliable source of explanation, in simple understandable terms, so you understand each part of your estate plan and know how it will affect your assets and loved ones, now and into the future.
What is the First Step in Drafting a Professional Estate Plan?
To make it simple, first gather the names addresses and phone numbers of each person you would like to have part of your Estate Plan. The people who will be involved are those discussed below.
Once you have obtained the full name address and phone number of each person you would like involved with your estate plan, call the Estate Planning Law Office of Codi M. Dada and schedule a complimentary consultation.
Who will be the Successor Trustees?
The first things that you should think of when preparing to draft an estate plan is to decide who you would like to designate as the successor trustee. (This is the person who will manage your assets if you are unable). You can select several who would serve as trustee or as a backup if the first selected was not able. Also you can select more than one person who would serve together at the same time. The advantages and disadvantages can be explained to you during your complimentary meeting with Estate Planning attorney.
Who are the Beneficiaries?
Next, decide who you would like to give your assets to and in what amounts or percentages. Is there a minor child, then decide who you would like to designate as a guardian?
Who are the Health Care Agents?
Who will make health care decisions for you if you are not able?
What things would you like those people receiving your assets to accomplish with your assets? (for example, to finish college, purchase a home, buy their first car, pay for a wedding)
(Do you want to give each person their gift all at once or divide the gift into increments depending on the persons age or accomplishments?
Discussing these issues with an experienced estate planning attorney is very helpful because the attorney can provide several options and common examples depending on your unique preferences and family situation as well as share his experience with each option.
What should I expect during a complimentary consultation with an Estate Planning Attorney?
During the initial meeting with an estate planning attorney expect to have a friendly but open conversation about your true concerns and desires relating to how you would like things to happen with your assets and family situation. Remember that an attorney has a duty of confidentiality and cannot share any information learned about you and your family.
During this conversation, the attorney should carefully listen and address each question you may have, while giving you solutions and personalized guidance. Remember, that the estate planning attorney has a legal duty and is under oath to maintain the privacy of all information you share with them. The attorney is not there to place judgment on you but rather, is there to make sure that what you want to happen with your assets happens the way you want.
For example, is there someone that is struggling with drug addiction or is there children from a previous marriage you want to protect/ prevent or is there an heir you believe may have special needs requiring special instructions or is there someone you think may not honorably handle the responsibility of receiving your gift. Although these topics might be uncomfortable to discuss, it is important the attorney is aware of these circumstances, so the proper provisions can be included in your estate plan.
At the end of the meeting the attorney will give you an accurate price for the cost of drafting your estate plan and a definite date when your estate plan will be complete. The price should be based on a flat rate rather than an hourly rate. Because estate planning is an area of law that is foreseeable, a reputable law firm should always provide you with a concrete flat rate and delivery date rather than an estimate based on hourly rates.
You are under no obligation to hire the attorney. If you decide that you would like to hire the attorney to draft your estate plan, most attorneys will require full payment up front. The attorney is required to hold your payment in the attorney’s client trust account until you are completely satisfied with your estate plan and the attorney has completed everything they promised.
How is Living Trust Funded?
A Trust is only valid at the time it is funded. This means that there must be some assets held in the trust. A living Trust is funded by titling assets into the name of the trust. With bank accounts and other financial institutions this is a process performed by the specific financial institution. The process requires presenting a Certificate of Trust or a Declaration of Trust to the financial institution. These documents are part of a professionally drafted Estate Plan.
When funding a Trust with Real Estate certain documents such as a Transfer Deed and Preliminary Title Report must be properly drafted and notarized and then recorded with the County Recorder’s Office in the county where the property is located. These documents are technical and should be completed by an Estate Planning Attorney. Most reputable Estate Planning Law Offices will accomplish the transfer of real property by drafting and recording the required documents as part of the overall Estate Plan. This service is provided at the Estate planning Law Office of Codi M. Dada
UNDERSTANDING YOU ESTATE PLAN
A Trust can be established in many different ways depending on each person’s circumstances. Below are typical scenarios of how a Living Trust works. An Estate Planning Attorney can adjust any provision depending on your preferences and specific circumstances of your life style.