Estate Planning Basics | Finance information

Benjamin Franklin famously said

, ?In this world, nothing is certain but death and taxes.?

Unfortunately, you can not avoid death. But a carefully-planned estate can help avoid Drafted
taxes, family conflicts and a lot of unnecessary heartache. The following provides a general overview of the estate planning process, and what to expect.

Why do I need an estate plan? Many of us spend our lives accumulating assets earthly Which, unfortunately, upon our death wishes, not go with us. The top two reasons for having an estate plan:

1 So you can transfer your wealth to your chosen heirs, in your chosen manner;

2 So you can plan for and Effectively limit the taxation of your estate;

What if I do not have an estate plan

If you die ?intestate? (which is without a? will) or without an estate plan, lots of things can happen, such as:

1 Intestate Succession: When someone this without a will, the government will step in and decide who gets what

second. Probate: The estate could go to probate, a costly and very public process. (See below: What is Probate)

3rd Guardianship of Minor Children. If both spouses pass away, it is a good idea to list who they want as a guardian

4th Higher estate taxes. Higher estate taxes = less for beneficiaries.

What is Probate? Probate refers to process of legally validating a person?s wishes. Such a procedure takes approximately 9-12 months. The court appoints a person designated as in ?executor? to handle the assets and to administer the estate. The fees that the executor and attorney receive are set by law (a percentage of the value of the assets go through probate Which.) The total fees can be approximately 5-6% of the estate assets. How Do I Avoid Probate?

Please note that wills DO NOT avoid probate. . (See Below: Wills v. Trusts)

In California, the first $ 100,000 of an estate is exempt from probate, meaning that the first $ 100,000 can be collected without a formal probate procedure. . All else is subject

Some probate-avoidance techniques are:

first Revocable Living Trusts;

2nd Joint tenancy;

3rd Life insurance and retirements accounts which name a beneficiary;

4 ?Pay-on-death? accounts

5th In California, ?spousal confirmation proceeding,? where a petition is filed with the court, notice is given to Certain parties, and if no one objects, the court approves the assets as going to the spouse. This procedure can only be used for husband and wife.

Is Probate Always Bad? Nowadays, people Tend to associate ?probate? with the bad and ugly. However, there are some instances that probate Can Provide benefits. For example, if your estate Owes a lot of debts, to a lot of creditors, or if you believe someone may challenge your estate in court. You should discuss these issues with a qualified estate planning attorney. Wills v. Trusts

As explained above, not avoid probate wills Thurs. Even if you have a will, upon your death, the will becomes a public document. A will is subject to probate, Which can be a painful, drawn-out process that most people would want to avoid.

A living trust, however, avoid probate. The principle behind a Revocable Living Trust is this: When You Establish a Living Trust, you transfer all your property into the trust, and then name yourself as trustee (or spouse as co-trustee). You will also name ?successor trustees?, who will take over your assets and handle them Pursuant to your instructions. Since the ?successor trustee? will be following your decisions, the probate courts needs not be involved. The trustees maintain complete control over the property, the same control you had before your property was placed in trust. You can not even discontinue the Trust if you choose. Another important difference between a trust and a will is that a will is effective until you die. A trust, however, is effective as soon as you make it, and can offer protection if you become disabled or incapacitated.
How Do I Transfer My Assets to a Trust? In order to Fulfill the purpose of your estate plan, you should fund the revocable trust you have by ring-transfer your assets to the trust. For all transfers, title should be Transferred to the trust. For example, if I were to set up a trust, I would transfer title to my property to ?Kelly Chang, as trustee, or successor trustee, the acting, of the Kelly Chang Revocable Trust Dated March 6, 2006.? The following

Describes the transfer process for the basic types of assets. For assets not

listed, please consult with a qualified estate planning attorney.

1 Real Property in California: It will not be necessary to prepare and record a new deed in order to transfer title of real property to your trust. So it is Necessary to submit a Preliminary Change of Ownership Report with the county assessor deed notifying the local as to Whether the property is subject to reassessment. A revocable living trust to a transfer is exempt from reassessment. Please note that if there is a mortgage, you should contact your lender and request a waiver of enforcement of any due-on-sale clauses contained in the loan documents.

2nd Real Property Outside of California: Laws vary from state to state regarding transfer s of real estate. Best to consult with an attorney located in that state who is familiar with local rules regarding property taxation, income taxation, and law regarding mortgages as it affects property search. We can help you find

seeking an attorney who will assist you.

3 Cash Accounts: You should contact all banks and let them know that you have a living trust and a wish to transfer assets to it. You should change the name on the bank accounts and CD?s by completing new signature cards as the trustee. 4th Stocks and Bonds. Your broker should help you with this

5th

However, if it?s a small policy, you may wish to continue the designation of your original beneficiary

6; The beneficiary should be changed to the trust: Life Insurance. New assets. All new assets should be acquired in the name of the trust

If I Have a Living Trust, Do I Need a Will

Yes, most trusts will have a? ?pour over? will, Which simply provides that any assets held in your name alone at death, Which were not in your living trust, will be Transferred to your living trust. However these, assets not originally in the trust will not avoid probate.

Should I Change or Update My Will? Congratulations, you?ve made your estate plan. When should you make changes or update the documents? It truly depends. Generally, if something major happens, examined as a death of spouse or beneficiary, divorce, adoption of new child, or winning the lottery. Please consult a qualified estate planning attorney. id=?article-resource?>

Kelly Y. Chang, Esq. is the owner / founder of the Law Offices of Kelly Chang, a Professional Law Corporation. The firm Specializes in Estate Planning, Real Estate Law and Family Law. Ms. Chang was born in Taiwan and is fluent in Mandarin Chinese, Taiwanese, and French. She is passionate about international issues and has traveled to 30 + countries. In addition, Ms. Chang is an accomplished classical pianist and composes and performs music in her spare time

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