At its core, an estate plan is a collection of documents prepared by a qualified attorney that serves several purposes. These documents can be categorized into three main types: Documents Enforced While You're Alive: These include a financial power of attorney, healthcare power of attorney, and advance directive. The financial power of attorney designates someone to handle your financial matters, such as bills and finances, if you become unable to do so. The healthcare power of attorney appoints someone to make healthcare decisions on your behalf when you are unable to make them yourself. An advance directive outlines your preferences for medical treatment and end-of-life care. Documents That Take Effect When You Pass Away: The primary document in this category is a will. It outlines how your assets will be distributed after your death and allows you to appoint guardians for minor children. Additionally, beneficiary designations or payable-on-death designations on financial accounts and life insurance policies come into effect upon your passing. Final instructions, such as burial or cremation preferences and funeral arrangements, can also be included. Documents That Handle Matters After Your Passing: This mainly refers to a revocable living trust, which is a powerful estate planning tool. A revocable living trust allows you to maintain control over your assets while avoiding probate. It can be especially beneficial if you have minor children or own a home. With a trust, you can stipulate how and when your assets will be distributed to beneficiaries, such as children receiving funds at specific ages or milestones. You also nominate a trustee who will oversee the distribution of the estate according to your instructions. It's important to have these documents prepared by a qualified attorney who can provide advice and guidance tailored to your specific situation. Estate planning involves not only the creation of documents but also discussions and conversations with the attorney to ensure your wishes are accurately reflected.

Oftentimes, the question is, should I get a trust or should I get a will? And in California, if you own property or you have little kids, the answer to that question is very simple: you should get a trust. It avoids probate, which is very costly and time-consuming, and it doesn't give you a lot of control. When it comes to contingencies, this is where the benefits of a trust come into play. Let's say you have a will and you want to leave everything you own to your two kids, and you have a couple of grandkids as well. So what happens if you become incapacitated? You become bedridden. Well, you're not dead, so the will does not control anything. Remember, a will only takes effect after you've passed away and can distribute your property. But what about when you're incapacitated and can't make financial or medical decisions for yourself? A will cannot do this, but a trust can. As part of a trust, you always create a trustee. With most of the trusts that I create, specifically revocable living trusts, you are the initial trustee. The trustee has control of everything inside that trust and does whatever the trust says after you pass away. But a trustee can also maintain control of that property if you become incapacitated. You can even put your own definition of incapacity in that trust. So, if your primary physician or two other doctors say that you are incapacitated, the trustee can take over. For example, if you can no longer live in your home and it needs to be sold to pay for medical bills or debts, or if you want to distribute that money to your kids, the trustee can do that according to the terms of your trust. The trust is a contingency plan because it allows trustees to control that property in an incapacity situation. Another type of contingency that a trust can plan for is if one of your beneficiaries passes away before you do. Let's say you have three kids, and each of those kids has a couple of kids of their own. What happens if one of your children passes away before you? In a will, we can build in plans for that, where your deceased child's share can go to their own kids. But what if those grandkids are really little? Do you want them to get control of that money as soon as they turn 18? In a will, when you give property away, as soon as somebody's an adult, they have complete control of that property. Not so with a trust. . .

Probate is a legal process that takes place after a person passes away. It involves validating the deceased person's will (if there is one), identifying and appraising their assets, paying off debts and taxes, and distributing the remaining assets to the beneficiaries. The probate process can be time-consuming, costly, and open to public scrutiny. Avoiding probate is often a preferred goal for many individuals and families for several reasons: Time-consuming: Probate can take several months to several years to complete, delaying the distribution of assets to beneficiaries. Costly: Probate involves court fees, attorney fees, and other administrative expenses, reducing the value of the estate. Publicity: Probate proceedings are public, which means details about the deceased person's assets and beneficiaries become accessible to anyone. Loss of control: The court oversees the probate process, and the distribution of assets may not align with the deceased person's intentions. Stress on loved ones: Probate can be emotionally draining for family members, creating unnecessary tension during an already difficult time. By utilizing estate planning strategies such as setting up a living trust, beneficiaries can avoid probate. A living trust allows assets to be transferred directly to beneficiaries upon the grantor's passing, bypassing the probate process. This approach offers privacy, reduced costs, quicker distribution, and greater control over the distribution of assets, providing peace of mind to both the grantor and their loved ones.

I completely understand that cost is an important factor when considering an estate plan. Since each person's situation is unique, the cost of an estate plan can vary based on individual needs and objectives. That's why I offer a complimentary strategy session to discuss your specific circumstances, understand your goals, and provide you with a personalized quote. During our strategy session, we will go over the various estate planning options available and how they can benefit you and your family. I believe in complete transparency, so I will provide a clear breakdown of the costs involved, ensuring you have a full understanding of the investment in safeguarding your assets and protecting your loved ones. While the initial expense may be a concern for some, it's essential to recognize the long-term benefits of having a comprehensive estate plan. By avoiding probate, reducing taxes, and ensuring your wishes are carried out, an estate plan can provide invaluable peace of mind for you and your family. Let's schedule a strategy session to explore the best estate planning options for you without any financial obligation.

A trust is often considered better than a will for many of my clients due to two main reasons: cost and control. Cost: Probate is the state government-run asset distribution process that occurs when you die with a will. It involves filing everything in court and distributing assets over a period of 18 to 24 months, resulting in significant costs and fees. For example, if your estate includes a $700,000 home and $300,000 in cash, investments, and retirement accounts, the total estate value is $1 million. Probating this estate could cost around $50,000 in court costs and fees. It's important to note that probate fees are based on the value of the assets, regardless of the equity or mortgage. In contrast, with a trust, if all your assets are properly transferred into the trust before or after your passing, they do not go through probate, saving both time and money. Control: Control is particularly important for clients with children under 18. When an estate passes through a will, if you leave assets to your minor children, they gain access to the funds when they turn 18. This may not be ideal, considering the significant amount of money involved. In contrast, a trust allows you to dictate exactly at what ages and milestones your beneficiaries, including your children, receive their inheritance. You can set conditions such as requiring them to obtain a bachelor's degree or certification before accessing the funds, or distribute the money in stages at ages 25, 30, and 35. Moreover, you can even hold back some funds until your children pass away and pass the remaining assets to your grandchildren. A trust provides much greater control over the distribution of assets over time compared to a will. Considering the cost of probate and the control a trust offers, a revocable living trust is often recommended for clients with minor children, especially those who are homeowners. It allows for efficient and cost-effective estate distribution while ensuring your wishes are followed.

Yes, you can put your home inside of a trust even if it still has a mortgage on it. The misconception that you don't actually own your home if it has a mortgage is not true. As long as the deed to your home states that you own it (either solely or jointly with your spouse), you can transfer it to a trust. A mortgage is a secured loan, and if you fail to repay the loan, the bank can foreclose on the home through a series of court proceedings. However, the home still belongs to you, and you have the right to put it in a trust. When creating a trust, you would deed the property from the owners (individuals) to the trustees of the trust. It's important to note that federal law prohibits banks from demanding full payment of the mortgage balance if a your primary residence is transferred to a specific type of revocable living trust, which is commonly used for estate planning purposes. Therefore, the bank cannot require full repayment simply because the home is being placed in a revocable living trust.