ESTATE PLANNING
FREQUENTLY ASKED QUESTIONS
Q: What happens if I die in California without a Will or Trust?
A: If you die without a Will or Trust in California, then the state’s intestate succession laws automatically come into play. This means that the state, not you, will control who gets what assets after your death. Why let a third party decide what your loved ones inherit when, with a Will or Trust, you can decide how you want your assets distributed upon your death?
Q: Alzheimers runs in my family. I want to make sure my children have the authority to assist me with my healthcare and finances incase I become diagnosed with Alzheimers. What types of documents would I need?
A: In order to ensure your finances and healthcare are taken care of in the event of your incapacity, two distinct documents are necessary. The first document is a Power of Attorney, which allows you to appoint someone you trust to essentially step into your shoes in order to manage your finances should you become incapacitated. This document is good is you have a monthly rent or mortgage to pay, utilities to pay, etc. The other document is an Advance Health Care Directive (“AHCD”). The AHCD allows you to appoint someone you trust to manage your healthcare, and carry out any healthcare wishes on your behalf. The AHCD also delineates your final wishes at death, such as any burial arrangements, organ donations, etc.
Q: Can I change my Trust after it is finalized and signed?
A: The answer to this depends on whether your Trust is revocable or irrevocable. If your Trust is revocable, then generally you are able to amend, change, add to, or even terminate your Trust. However, if your Trust is irrevocable, generally no changes can be made after the Trust is finalized and signed.
Q: Do I have to use the same attorney who drafted my estate plan documents if I want to make a change/amendment?
A: Many people do not realize that they do not have to use the same attorney for drafting and amending their estate planning documents. If a client so desires, they can choose a different attorney to make a change to their estate planning documents, or even to administer a Trust drafted by a different attorney.
Q: I don’t have a lot of time on my hands and like to spend as much of my time with my family as possible. How do your remote services work?
A: Our remote estate planning process makes it easy for our clients. In fact, it’s just a 3 part process. First, our attorneys will have a telephone call with you to ensure we address all of your desires and questions about the estate planning process. It is our goal to make sure we meet your estate planning needs and want to discuss the different options with you. Next, we will e-mail you an electronic, straight-forward Questionnaire. Once you have completed the Questionnaire, our attorneys have a two week turnaround time at which point you will receive a draft of your estate plan for review. Along with this draft, we will provide you with a summary of your estate planning documents in order to ease your review. After review, we will mail your estate plan by first-class mail along with an instructional letter and colored tabs instructing signatures on all required areas of your new estate planning documents. Once you have signed your estate planning documents, they are yours to keep in a safe place, and your estate planning process is over! So easy, our clients always wonder why they hadn’t looked into our remote estate planning sooner!
Q: Should I choose a Trust or a Will?
A: There are many benefits that a Trust has over a Will. The main benefit of a Trust is its ability to allow the Trustor/creator to avoid the lengthy and expensive probate process. In San Diego county, the typical probate case can take from 1 to 2 years to complete. This means that your beneficiaries will have to wait until the 1 to 2 year probate process is completed to receive their distributions. As far as the cost of probate, many people are surprised to learn that these costs are statutory and set by the State of California - not by the handling attorney.
Statutory probate fees under California law are as follows:
4% of the first $100,000 of the estate
3% of the next $100,000
2% of the next $800,000
1% of the next $9,000,000
0.5% of the next $15,000,000
These fees can be very expensive. Keep in mind that they come directly from your probated estate, meaning your beneficiaries not only have to wait 1 to 2 years for their distribution, they also will inherit less from your estate.
Statutory Fee Example: If the deceased’s estate is worth $500,000, your probate costs are going to be $26,000. Likewise, if your estate is worth $1,000,000, your probate costs are going to be $46,000.
Other benefits Trusts have that Wills do not have:
Trusts are far less litigated than Wills due to the mere fact that they are effective as of the date the Trustor/s sign, whereas a Will is not effective until after death;
Trusts allow for you to give structure under which your assets will be managed and disbursed to beneficiaries;
Trusts can hold assets for a period of time for your loved ones who may not be able or responsible enough to handle the estate;
Because Trusts are private documents, whereas Wills are public documents, a Trust protects your privacy;
Trusts are typically more difficult to contest than a Will;
Q: If I move out of or into California, do I need to change my current estate planning documents?
A: While your Trust is likely drafted to reflect that it should be upheld regardless if you move out of the state where it was drafted, it is generally a good idea to have your estate planning documents updated by an attorney practicing in the state which you will be residing, whether this be California or any other state in the United States of America.
Q: Do the beneficiaries and successor trustees of my Trust have to reside within California?
A: The short answer is no. Your beneficiaries and successor trustees do not need to live in California and can live anywhere in the United States of America.
Q: Can I put out-of-state property into my California Trust?
A: Yes! In order to protect your out-of-state properties, we can certainly include them in your California-based estate plan.
Q: How long does the estate planning process take from start to finish?
A: At Warfield Law, we love to cater to our clients! Many of our clients prefer to have teleconferences regarding their potential estate planning documents, rather than taking the time out of their day to come into the office. These clients are so busy that they are happy to first meet us at the signing of their estate plan. Other clients prefer to come in to our office for up to two visits, while many clients never find the need to meet face-to-face and prefer to handle the entire process virtually! Whatever our clients feel most comfortable with, we accommodate!