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San Diego Probate & Estate Administration Law Blog

The benefits of talking to your family about your estate plan

Since an estate plan largely focuses on financial details, many people assume that it should be private. Just as it is not considered polite to ask someone how much they make in a year, family members do not want to pry into someone else's personal business. An elderly person may see no reason to tell heirs exactly what the estate will leave to them.

However, if you are doing your estate planning, you should know that it is actually quite beneficial to open this type of dialogue with your heirs. This information does not have to stay personal. After all, a major goal of estate planning is to pass that wealth to your heirs, so it can help to involve them in this process. Some benefits of communication include:

  • Creating a responsible plan for how your heirs will use the money and assets they receive. Parents often worry that their heirs will simply squander their wealth, but the estate plan can be crafted to prevent it.
  • Working together to define your financial legacy. You have a philosophy for how you handle money already, but it can help to work with your heirs to create a family philosophy that can work from one generation to the next.
  • Reducing the odds of an estate dispute. Talking to your heirs in advance gives them a chance to offer feedback and help you create a plan that everyone approves of. Plus, your heirs will have realistic expectations, which can also lower the odds of a dispute because there are no surprises.

Is it too soon to do your estate planning?

You're 40 years old, in the middle of your life. You're married, you have two kids, and you have a good job. You recently bought your dream home in the suburbs. Life has played out exactly how you wanted it to, and you assume you have decades left to enjoy it.

Is now really the time to think about estate planning? Or is that something you can put off until you get closer to retirement?

Reasons a trustee could get removed

It is critical to take your time when naming a trustee, picking someone you know will do a good job. Perhaps your first inclination is to pick one of your adult children. Maybe you have another relative that you can count on. Perhaps you want to use a professional. No matter what route you decide to go, take your time, consider the person very carefully and only make your selection when you feel fully confident that he or she can administer your trust properly.

After all, a trustee can get removed from a trust. This is chaotic for your estate plan and damage may already be done. Some reasons that this happens include:

  • The trustee misuses the funds for his or her own gain. For instance, perhaps your trust was supposed to help your grandson pay for college, but your son or daughter decided to take money out to buy a house.
  • The trustee does not follow all of the terms set up in the trust. For example, perhaps you created a trust that only pays out when younger heirs reach a certain age. The trustee decides to give them some money in advance, bowing to pressure from the other heirs.
  • Hostility between the beneficiaries and the trustee. Perhaps the two never saw eye-to-eye, or maybe the beneficiaries believe the trustee is mismanaging the funds. When open hostility occurs and communication breaks down, it may be time for a change.

Trusts may help if you own property outside of California

You are trying to decide if it is wise to use a trust while doing your estate planning. You know how helpful they can be, but you just need to determine whether or not your specific situation means that you'll really enjoy all of the benefits.

Do you own property in another state? For instance, perhaps you first lived in Washington before moving down the coast to California. You still have your house in Washington, which you and your family visit every few months to see your extended family.

Anthony Bourdain's passing brings up estate planning questions

The sad passing of TV personality Anthony Bourdain has brought up some important estate planning questions that others may want to consider.

Bourdain and his wife were still legally married when he died. They did not want to get a divorce, as they were focused on staying fully involved with their daughter. They said they both loved her and wanted to put their time and energy into co-parenting. However, they had separated and were not romantically involved as a couple.

Should an executor pay off an estate's bills right away?

The executor for an estate is often charged with taking care of the bills and financial obligations of the estate when the person who owned it passes away. After all, even if that person worked hard to be up-to-date on the bills, there may be final payments for utilities, credit cards, mortgage payments, funeral costs, taxes and much more.

Someone has to take care of these as the estate gets divided up, and the bills may extend over time if this division does not happen right away. For instance, siblings may opt to keep a house for 12 months to sell in a stronger market, and then they have to pay all related costs for the next year.

How to prep for an estate planning session

Estate planning is all about preparing for the future and making sure that your goals are met. However, good estate planning often takes time.

If you're prepping for a session with your attorney, take a few moments and gather up what you'll need to make the process easier.

Did new tax laws make estate planning obsolete?

The Tax Cuts and Jobs Act of 2017 doubled the exemptions that apply to estate taxes. Federal estate taxes won't apply to individual estates unless their net worth exceeds $11.18 million. For couples, the exemption is $22 million. This means that nearly all Americans — except for the few who have net worths exceeding $11 million — will not have to worry about estate-tax planning. This might beg the question: Is estate planning obsolete?

No, estate planning is not obsolete. Americans still need to plan for the day when they're no longer here or no longer able to make decisions for themselves. A well-planned estate could benefit families in numerous ways, such as:

  • Prevent or reduce the chances of family infighting.
  • Lower the costs and time associated with probate proceedings, or eliminate the need for probate altogether.
  • Offer clear guidelines about how to distribute an estate to heirs.
  • Make a plan for protecting assets from creditors.
  • Make a plan for protecting the assets of those with special needs.
  • Distribute wealth to heirs gradually over time with a spendthrift trust.
  • Set up health care proxies, powers of attorney and living wills that go into effect in the event of incapacitation.
  • And much, much more, depending on your situation and needs.

You must be very sure that you want an irrevocable trust

You're thinking of setting up an irrevocable trust for your heirs. You're interested in a multitude of benefits, from the tax advantages -- which you do not get with a revocable trust -- to the control it gives you over how your heirs get and use their money.

These trusts can be incredibly helpful. A trust is created with your specific situation in mind, so you know that it's a flexible tool to give you control over your assets. You can save on taxes, make your wishes known, prevent future financial catastrophes and ensure that your plans for your wealth are followed.

How people can contest a will

Are you worried that someone might contest your will?

It's a common issue. Family dynamics can sometimes give rise to a lot of strife -- and that can boil over in the midst of grief. Other times, people intentionally leave a potential heir out of their will and just know that person is going to be unhappy about it.

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