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Questions and Answers
about Estate Planning in California
For similar pages, click here:
Trust FAQ and Probate
FAQ
Q. What is estate planning?
A. It is a planning procedure that determines how someone's assets, also
known as their estate, will be distributed after that person dies. It might
be as simple as signing a will, or it might be more complicated with living
trusts, charitable remainder trusts, life insurance trusts, and other
methods of avoiding probate and reducing taxes after death.
Q. Why should I do any estate
planning?
A. If you don't have an estate plan, the State of California has one for
you, through a process known as intestate
succession.
In other words, there are state laws that determine who will receive your
estate, even if you would have disagreed with that result. To make sure
that you make the decisions about the distribution of your estate, you need
a will and/or a trust.
Q. All I want is a simple
will. Why should I get involved with estate planning?
A. If your total estate is under $100,000, you might need only a will. But
you also might want to consider an advance health care directive and a power
of attorney, both of which can make things easier for your family after
your death.
On the other hand, if your estate is more than
$100,000, you can avoid probate and federal estate taxes if you have an estate plan. A simple will does not avoid
probate, and won't help to reduce federal estate taxes.
Q. How much will an estate plan cost?
A. That depends on where you live and how complicated your estate plan will
be. Also, some attorneys charge a flat fee for an estate plan and some
charge on an hourly basis. Before hiring an attorney you should determine
how fees will be determined and approximately how much will be charged. This
office charges flat fees for estate planning and on an hourly basis for trust administrations.
Q. Are attorneys required to hold an
initial consultation with a client at no charge?
A. No. Some attorneys do not charge for the first visit, and usually say
that in their advertising. If the attorney does not offer a free initial
consultation, the client should assume that the fees will begin as of the
first meeting. This office offers a free initial consultation for all types
of estate planning.
Q. Why should I have an attorney draw
up my estate plan when I can have a paralegal or a typing service do it
cheaper?
A. The initial cost should not be the only consideration because a poorly
prepared estate plan may eventually prove to be much more costly than a
properly prepared estate plan. Problems with the estate plan may not become
apparent until after the person who signed the estate plan has died. At that
point it may be too late to correct the problems and the result could be
extended and costly litigation.
It is also a violation of state law for paralegals to
give legal advice. Due to the complexity of a will or trust, questions are
bound to arise about the meaning of various parts of the document.
Non-lawyers who attempt to answer these questions are breaking the law and
could be providing inaccurate information.
Q. I saw an ad for a living
trust seminar that says that amendments will be made to the trust during the
lifetime of the client at no charge. How can they do that?
A. In some cases the real purpose of the seminar is not to sell you a
trust, but to sell you an annuity, which results in substantial commissions
to the person selling the annuity. The cost of the future amendments is
minor, compared to the commissions, and also gives them the opportunity to
sell you more annuities. However, in some cases the promise of free
amendments is an illusion because the attorney or business involved doesn't
intend to provide anything for free. And that's assuming that you can ever
find them again to discuss the matter. More information is available on
these pages: Scams and
Annuities
Q. I brought my mother and father to
see an attorney about a trust, but the attorney wouldn't allow me to sit in
on the meeting. Why not?
A. The only clients in this case are your mother and father and the attorney
should be working only with the clients. To do otherwise creates problems
with attorney-client confidentiality, potential conflicts of interest, and
could raise questions about the validity of the estate plan. If a
beneficiary is involved with the planning of the will or trust, a
presumption of undue influence can arise. Undue influence means that one
person has been influenced by another to prepare or change an estate plan in
a manner that person would not have chosen if there had been no undue
influence. An example might be parents who leave everything to one child and
nothing to their other children because the child who benefited from the
estate plan convinced his parents that he should be favored by them.
Q.
How often does an estate plan need to be reviewed after it is signed?
A. Clients should look at their estate plans once a year to determine if the
distribution plan still fits their needs, if the executors and trustees are
still willing and able to serve, or if other details are up to date and
still meet the clients' needs.
Q. Wouldn't it be cheaper to
buy software that allows me to prepare my own living trust? I have
many clients who started out with software packages, found them to be too
complicated, and then came to my office for an estate plan. They said they
learned a lot about estate planning from the software, but were unsure about
their choices regarding various clauses to be included in their wills and
trusts. They were also concerned that choices that they made could be
wrong, leading to litigation and additional taxes after their deaths.
Q. I have estate planning software
that produces a will that will require notarization. What does this mean?
A. Some software is drawn up for use in all 50 states. In some states
notarization is a valid means of witnessing a will. In California, however,
notarization of a will is not allowed as a substitution for the two
witnesses required by state law.
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