Estate Planning FAQ
Frequently Asked Questions About Estate Planning
There are many myths and misunderstandings regarding estate planning and probate. The Law Offices of Imelda Valdivia can clear up these misunderstandings and provide sound estate planning advice to ensure your assets are distributed to your family and loved ones in a timely, orderly, and efficient manner.
Call us at (310) 318-0808 for a free initial consultation regarding estate planning solutions.
Why do some people make going through probate sound as painful as having a root canal?
Probate may not cause physical pain, but it can certainly prolong the emotional pain of your survivors. For one thing, all assets are usually frozen until probate is completed.
If cash flow is a problem, your family may be dependent on a court decision for an allowance to cover living expenses. Probate can also be costly. Those court costs, executor fees, and other expenses add up quickly and all of them must be paid before your assets are distributed.
Probate also deprives your family of privacy at a time when they may need it most. Because probate documents are open to the public, anyone with an interest in your financial affairs (including your debts and assets) has easy access to such information. In fact, some companies regularly check such public records for sales and marketing leads.
Finally, most people need time to mourn the death of a loved one before they can get on with their lives. A long probate process can make it even more difficult for them to find closure.
While the Law Offices of Imelda Valdivia cannot prevent probate if someone in your family has died without a will, we can help facilitate process for you. And our affordable fees can save you money, as well. Our property deed lists my spouse and me as joint tenancy owners. Does this solve my problems?
... Yes and no. When you die, ownership of the property will transfer to your spouse tax-free and without probate. However, if you both die at the same time, or if your spouse does not remarry, the property will have to be probated and estate taxes paid before it can go to your heirs.
It is no secret that death and taxes are inevitable. But with the appropriate strategies, you can limit the size of the tax bite. Tell us about your situation and we will show you how it works. We provide a full range of estate planning services that can transfer your wealth to your children and loved ones while minimizing tax liabilities.
I already have a will. Do I really need a trust as well?
Not if the prospect of your survivors facing probate court is OKAY with you. Or if you are NOT concerned about losing a good portion of your estate to taxes . . . but if these issues matter to you, or if keeping your estate plans PRIVATE is imoprtant to you, it makes sense to consider a trust. Who has control of my trust if something happens to me?
If you and your spouse are co-trustees and one of you becomes incapacitated, the remaining spouse can assume responsibility immediately. If you are the sole trustee, your successor (or corporate) trustee will manage your trust until you recover. If either you or your spouse should die, the surviving spouse will gain immediate control of the trust. If you are the sole trustee, or if you and your spouse both die, your successor (or corporate) trustee will pay your debts and distribute the remaining estate according to your instructions.
What's the difference between a living trust and a living will?
A living trust describes how you would like your financial affairs handled if you should become incapacitated or die.
A "living will" is now called an "Advance Health Care Directive"( AHCD) and informs others of your wishes regarding life support and other medical care if you become terminally ill.
Is that the same as a Durable Power of Attorney for Health Care?
Yes. A Durable Power of Attorney for Health Care is the same as an AHCD and authorizes the person you've chosen to make all the decisions regarding your health care, including choice of doctors, whether or not you should enter a hospital, permission for surgical procedures, and if heroic measures should be used if you are terminally ill.
How long does it take to establish a trust?
It can be done in as quickly as one week. The Law Office of Imelda Valdivia has done it. It depends on your circumstances. If you have a lot of titled assets, such as real estate, bank accounts, stocks and bonds, etc., their ownership must be transferred to the trust. Untitled assets, such as jewelry, art, and other valuables will also need to be itemized for inclusion. Depending on how quickly you act, it may take several days, weeks or longer. But remember, if you don't organize this information now and you become incapacitated or die, your family may end up paying the court and attorneys to do the same job.
We also make house-calls, and by appointment only will also meet with clients after "regular" work hours (after 5pm) and even on weekends.
Can't I draft my own will or trust?
Perhaps. You may even find printed forms and kits at your neighborhood stationery store or on the internet. The danger is that if you fail to state your wishes accurately or completely, the results may not be what you intended, or in the case of a will, it may even result in an estate dispute and litigation. On the other hand, a qualified and experienced attorney like the Law Office of Imelda Valdivia can ensure that the documents you draft will not only meet your goals, but also preserve your estate for your heirs as fully as possible.
How much money can I save with a funded living trust?
LOTS! To appreciate your potential savings, it is important to know the value of your estate. It's probably more than you think. You can determine how much your estate is worth by adding up all your assets. Be sure to include these items on your list:
• Cash
• Stocks, Bonds, and Mutual Funds
• Notes and Mortgages
• Annuities*
• Retirement Benefits*
• Insurance Benefits*
• Personal Residence
• Vacation Property and Other Real Estate
• Automobiles/Boats
• Art
• Jewelry
• Collectibles
• Other Personal Property
* These items are not included in probate (because they are instruments that provide for specific beneficiaries outside of probate) but are for Federal Estate Tax costs computations.
Depending on the size of your estate, a funded living trust can save the following probate costs: Estate Value Probate Fees paid to BOTH ATTORNEY and the PERSONAL REPRESENTATIVE
up to $100,000 4% the next $100,000 3%
the next $800,000 2% the next $9 million 1% the next $15 million .5% amounts above $25 million A "reasonable" fee amount to be determined by the Court. (Probate Code Section 10810)
For a free initial consultation with attorney Imelda Valdivia, call (310) 318-0808, or contact us online. Located in Redondo Beach, we serve clients in the South Bay, Los Angeles, San Fernando Valley, and throughout California.
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