The law firm of Gomez & Simone is here to answer your questions, and when it comes to the subject of Estate Planning there are usually many. The first question we often get is, “I have a Will, so why would I need a Living Trust to avoid probate?” There has been much misinformation about estate planning, and one of the most commonly repeated untruths is that having a Will drawn up will avoid the necessity of probate. That is not true in California (and most states.) Even if you have a valid will, your estate will go through probate if you do not have the proper estate planning documents and your assets exceed $150,000. If you own a home, then your assets will almost certainly be over the $150,000 limit, meaning you must have an estate plan in place to avoid probate.
What is Probate| Estate Planning
Now that we answered that question, we need to answer the next question, which is “What is Probate, and why do I want to avoid it?” Probate is a court proceeding that formally distributes the assets from an estate when a person dies. Assets are everything that you “own,” including any property, bank accounts, investment accounts, and more.
During probate proceedings, the assets in an estate are frozen, meaning no one can use them. During the probate process, the court will examine the validity of the will (if there is one) and determine who will be the executor of the will. Even though the estate is frozen, the executor is still responsible for paying debts and taxes, which can often be very difficult because of the large amount of expenses. However, even the executor will not have the final say on who gets what, the probate judge does. Probate can be a very frustrating time for the people you want to be your beneficiaries, and can take years. Plus, it’s very costly.
Now on to the next question, “How much does Probate cost?” The legal fees for probating an estate are set by the state of California, and are based on the estate’s gross asset value. This generally means everything you own, but nothing that you owe. See the chart below for an example of probate fees:
|Gross Asset Value of Entire Estate||Estimated Compensation to Attorney and Personal Representative WITHOUT Proper Estate Planning||Probate Fees|
WITH Proper Estate Planning
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Yes, probate is a “gift” that you do not want to give your beneficiaries! The good news is that there are ways to avoid probate – one of which is to set up a California Living Trust. And did you know, by setting up a properly drafted will and living trust you can not only avoid probate, but even gain tax benefits. Gomez & Simone is here to help you properly prepare so that your beneficiaries will truly benefit as you intended. Our Estate Planning Package also will benefit you, during your lifetime, as it includes a durable power of attorney and an advance healthcare directive.