Every spring I see an increase in younger families coming in to do their estate plan. It’s typically driven by the desire to protect themselves if something happens during their summer vacation. Here are the top 3 concerns parents have shared with me over the years.
Who will care for my children?
California courts give great weight to parents’ written designation of a legal guardian in the event both parents pass away. The key here is “written”. If you don’t put it down in writing, then the court will use its standard set of rules to find and assign the legal guardian of minor children.
The proper way to do this is to name legal guardians of minor children in both a Will and a standalone Guardianship Nomination. A written nomination will help the court to understand your wishes, and potentially shorten the time it takes to get the children out of court and into the hands of their new guardians. It’s not uncommon for grandparents or siblings to get into long protracted court battles over who will be the legal guardian of minor children, so make sure your wishes are properly documented.
Will my house and cash be tied up in probate for months before my kids or beneficiaries could get access to it?
If you own real and personal property in California worth more then $150,000, then you face the potential of a long and expensive probate process before it can be distributed to your children or other beneficiaries. The most common way to avoid probate and provide quick access to your assets are to have them held in a properly drafted trust. Trusts are private documents that protect your wishes from the prying eyes of creditors and scammers, and provide a simple way to name someone to take over and manage your assets on behalf of your children or your beneficiaries.
Trusts can also provide protection for beneficiaries who might have creditor problems, special needs, or alcohol/drug issues at the time they are to receive their gift from the trust. These situations rarely occur, but it nice to know they are covered in case they do. A properly drafted trust can also stretch out the time your children or beneficiaries can access the funds, while still providing for their health, education, maintenance and support. It also give the assets a longer time to grow in value, thus increasing the gift.
What will it cost to take my estate through the probate process?
I always use an example of a $500,000 estate when discussing the cost of probate. If you have a house and after tax investments of $500,000, then the average cost of probate fees are $26,000, plus court costs of approximately $1,500. That’s $27,500! Combine that with the average of seven months it takes to process an uncontested probate through the court system, it’s no wonder people are afraid of putting their children through this process.
Once clients understand the facts, they are normally anxious to get the right estate planning documents in place.
About Mark Breunig
Mark Breunig is an estate planning and elder law attorney with offices in Lincoln and Loomis, CA. He has been practicing law in northern California since 1995. He can be reached at (916) 672-2042, or firstname.lastname@example.org