It is said that two things in life are guaranteed: death and taxes. While most people do not embrace the idea of contemplating their death, taking the time to establish an estate plan could save time, money and heartache in the future.
There are several options available when shopping for an estate plan: wills, living trusts, and irrevocable trusts are only some of the more popular options. What is essential, is understanding which of these plans is right for your particular situation.
The most popular reason that people elect an estate plan is to escape probate. Probate is a court proceeding designed to assist in the distribution of a person’s estate at the time of his or her death. Unfortunately, probate is both expensive and time consuming. For example, in California, if you die with an estate valued at $400,000, after paying for statutory attorney’s fees, court costs, administrative costs, and filing fees, probate would ultimately cost $22,500. And this is only the minimum, estates that are challenged in court, or that are more complex in nature, can be charged even more. What is even more frustrating is the fact that probate can take anywhere between six months and several years to close, tying up all of your estate’s assets in the process.
By planning your distribution of assets while you are alive, and initiating certain types of estate plans, you can avoid probate altogether. It is important to note that a simple will, while beneficial in allowing you to choose your heirs, will NOT avoid probate. For this, you need to consult an attorney in regards to setting up a living trust.
Living Trusts are perhaps the best of both worlds. Not only do they avoid probate, but they also allow one the freedom to make all financial decisions during life, as well as designate the amounts left to heirs after death.
For more information on Estate Planning and Living Trusts, contact Edward Miller, Esq. or Dennis F. Fabozzi, Esq. at (951) 296-1775, or e-mail: email@example.com; or visit our website at www.dfflaw.com.