What You Need to Know About Estate Planning

Have you heard of the estate planning process but aren’t sure why you need to go through with it or feel too confused to contemplate the process? The attorneys at M.S. Domingo Law Group are here to break down the estate planning process by answering common questions our clients have.

 

What is Estate Planning?

Estate planning is not just about creating legal documents or distributing money. It is about protecting yourself and your property, providing for your loved ones, controlling how your property will be handled or distributed when you are incapacitated or gone, and ensuring your wishes are met when you cannot communicate.

 

Who Needs Estate Planning?

To put it simply: everyone. While children under the age of 18 are protected by their parents’ estate plan, those over the age of 18 need their own estate plan to protect the property they have accumulated. Even an 18-year-old student would benefit from making their own estate plan to protect their health, financial, and legal choices. While an 18-year-old may not have significant property, the basics remain the same.

 

Is Estate Planning That Important?

The idea of making an estate plan may seem scary or confusing at first, but it is something you need to think about while you are still healthy and mentally capable of making decisions. An estate plan provides instructions to people you trust on how to care for you and your property when you are not in good health and later when you pass away.

 

What is a Trust?

A trust is a legal document that serves as an instruction manual, detailing what should happen to everything you own that is titled to your trust. A revocable living trust is a popular choice because it allows you to serve as a trustee and beneficiary during your lifetime, making changes as needed. You can also appoint backup trustees to manage your trust when you are no longer able to do so. Trusts can also protect your assets from creditors and reduce taxes. Assets titled in the name of a trust are typically exempt from the probate process.

 

What is a Will?

A will is a document that becomes effective upon your death. It specifies your direct wishes regarding property and assets, provides for specific gifts to named individuals, and allows you to name a guardian for minor children. Without a will, the court will decide who settles your estate and raises any minor children, and the state may distribute your assets in a way that does not align with your wishes.

 

What is an Advanced Health Care Directive?

An Advanced Health Care Directive (AHCD) allows you to name a trusted person to make healthcare decisions on your behalf if you become unable to do so. Your AHCD can take effect immediately upon execution or upon your incapacity.

 

What is a Power of Attorney?

A power of attorney grants an agent authority to make decisions on your behalf regarding healthcare, finances, business, or real estate. The agent can handle financial decisions, pay bills, buy or sell property, or manage business affairs. A power of attorney can be effective immediately or spring into action upon a specific event.

 

What is Probate? Does My Estate Go Through Probate if I Have a Will?

Probate is the court-supervised process of managing and distributing your assets after death. Even if you have estate planning documents, your assets may still go through probate. To avoid probate, you can:

 

 

Create a living trust – Beneficiaries can inherit property without court involvement.

 

 

Hold property jointly – Upon your death, the property automatically passes to the joint owner.

 

 

Use payable-on-death (POD) and transfer-on-death (TOD) designations – Bank accounts, securities, real estate, and vehicles can transfer directly to named beneficiaries.

 

 

Keep your estate under $184,500 – Estates valued below this amount may avoid probate. However, personal property like jewelry and household goods are included in this valuation.

 

 

A will alone does not ensure probate avoidance.

 

Why Do I Need a Will if I Have a Trust (or Vice Versa)?

Both a trust and a will serve different purposes in protecting your estate. A trust is crucial if you own real estate, want to avoid probate, or have minor children or financially inexperienced beneficiaries. A will is necessary to name guardians for minor children. Additionally, a pour-over will transfers any unplaced assets into your trust after death. Without a trust, probate will be required to validate your will, especially if your estate is valued over $184,500.

 

What is a Guardian?

A guardian is a person legally responsible for a child’s care when the parents cannot fulfill this role. You can appoint a guardian in your will and name alternates in case your first choice cannot serve. If you do not name a guardian, the court will decide who raises your children.

 

Do I Need an Estate Plan if I’m Not Married and Have No Children?

Yes. Without an estate plan, your assets will pass to your closest blood relatives under California probate law. If you have no immediate family, your assets will pass to distant relatives, even if you prefer to leave them to friends or charities. An estate plan ensures your assets go where you want them to go.

 

How Do I Get Started on an Estate Plan?

If you are considering an estate plan, contact us. We will discuss options and send you a questionnaire to help you think through your decisions. We understand that this process can be overwhelming, and we want to ensure you have time to make informed choices.

 

What is Included in an Estate Planning Package?

A typical estate planning package includes:

 

 

A trust

 

 

A will

 

 

A durable power of attorney

 

 

An advance health care directive

 

 

Real estate property deeds transferring ownership to the trust

 

 

We primarily draft revocable living trusts and pour-over wills, but everything is tailored to your needs. You may also choose to complete select documents instead of the full package.

 

How Much Does an Estate Plan Cost?

Our firm offers a flat-fee structure, which varies depending on your needs. Once you become our client, we will be available via phone, email, in person, or through Zoom for any questions you may have.

Contact Us Today

Although creating an estate plan may seem daunting, it simply requires time and the ability to make informed choices about your future. Contact the attorneys at M.S. Domingo Law Group at (925) 891-5006 for expert guidance on estate planning.