Estate Planning for Californians

An estate is the entirety of what you own, including bank accounts, household furniture and items, personal belongings, real estate, cryptocurrency, automobiles, copyrights, and your debts (mortgage, leases, and loans).

Estate planning is the process of directing who will receive your property when you die, who will manage your property and make healthcare decisions if you become incapacitated, and who will care for your children if they are minors when you pass away. Estate planning minimizes legal battles over your property and children. Estate planning also addresses special needs for dependants.

Everyone benefits from having an estate plan. All parents of minor children should have guardian nominations for their children in the event of incapacity or death. Anyone who owns real estate in California is wise to create a Trust. All individuals would be wise to have a Power of Attorney and Advance Directive to allow another to manage your financial affairs and make healthcare decisions if you become unable to do so.

Both Wills and Trusts are estate planning tools to direct the distribution of your estate.

A Will is public record and must be administered under the supervision of the Probate Court, both a lengthy and expensive process. "Pour-over Wills" are Wills that put your remaining estate into your Trust.

A Trust is a private document, not published to the public, that allows the estate to be administered outside of the court's supervision and often in a much timelier manner than the Probate Court. Trust administration is also typically less expensive than a Probate Administration for a Will.

Like most do-it-yourself projects, estate plans can be created with online forms. However, this is not advisable. An attorney is knowledgable in the language of the law and understands how to avoid major pitfalls in estate planning. Consider the risk of chancing it with your life's savings and the guardians of your minor children. 

An estate plan can take as little as a few weeks to finish, depending on the pace at which information is gathered and decisions are made. 

Without an advance healthcare directive, your caregivers may not act according to your wishes, or they may have a lengthy battle about how to provide medical care for you.

Without a Will or Trust, at your death, your heirs will receive your property according to California intestacy laws, which may not reflect your wishes. Further, without a Trust, your estate will pay hefty statutory probate fees and will process at the court's timing, often a wait of many months.

Without guardian nominations, at your incapacity or death, a court will decide who your minor children's financial and physical guardians are, which may not be individuals you would have chosen.

All these outcomes can be avoided with a correctly drafted estate plan.

California has some of the highest probate fees in the country. In California, statutory probate fees for the attorney and personal representative, each, are based on the gross value of the estate and are as follows: 

4% on the first $100,000; 

3% on the next $100,000; 

2% on the next $800,000; 

1% on the next $9,000,000; 

0.5% on the next $15,000,000.

When valuing the estate, only the gross value of the asset is considered, not including the debt.

Estate Values and Compensation to Attorney and Personal Representatives are as follows:

$100,000 Estate - $4,000 to each ($8,000 total)

$500,000 Estate - $13,000 to each ($26,000 total)

$1,000,000 Estate - $23,000 to each ($46,000 total)

$1,500,000 Estate - $28,000 to each ($56,000 total)

$2,000,000 Estate - $33,000 to each ($66,000 total)