San Jose Estate Planning Attorney
Estate Planning Essentials for Every San Jose Family
Regardless of your age or financial situation, consider creating a comprehensive estate plan that expresses your final wishes. Most California residents recognize the importance of having a will. Still, many are unaware of the benefits of creating trusts and having other documents that can protect them and their family’s future.
The Tree of Life Law Firm of San Jose is dedicated to helping families plan for the future, allowing them to focus on the things that matter most. When you come to us for legal assistance, we will work to craft a custom estate plan that provides you with the protection and peace of mind you deserve. Contact our law office today to schedule a free consultation, and we will assess your legal needs.
What Happens to My Assets if I Die Without Creating an Estate Plan?
Most individuals mistakenly believe that if they die without a will, their surviving spouse and children will automatically inherit their property. Unfortunately, this is not always the case. In the absence of a valid estate plan, California’s intestacy laws control the distribution of one’s property. Assets belonging to individuals who die intestate, without a will or trust, become subject to probate, and your property may be divided contrary to your wishes.
The probate court will assign an individual to act as an administrator who will be responsible for collecting and identifying all estate assets, paying debts, and filing estate taxes. The administrator will also be responsible for distributing assets to rightful heirs.
California has strict intestacy laws governing the division of assets when a decedent has no estate plan. For example, any assets acquired during a marriage or with a registered domestic partner will be passed on to the spouse or partner upon the death of the other. Any property owned before a marriage or domestic partnership will be passed on to heirs according to a hierarchy that prioritizes the surviving spouse or partner, followed by their children and their descendants, then parents and siblings.
What Documents Should Always Be Included in a Comprehensive Estate Plan?
Having a last will is invaluable as it can outline your final wishes and appoint a legal guardian for minor children. Even so, a will alone does not comprise a comprehensive estate plan, especially as you grow older and look to protect your assets and ensure your family members are well-cared for after your death.
The best way to properly plan for the future is to have essential estate planning documents in place that accurately reflect your personal goals and objectives. Some of the documents that need to be included in an estate plan include:
- Pour-over will: A pour-over will is used to ensure that any assets not placed in a trust will be added in should they be left out when the trust was created. Pour-over wills are also used to name guardians for minor children
- Revocable living trust: A trust that can help your family members and other beneficiaries avoid the costly and time-consuming probate process. Assets are placed in the trust and are no longer considered your property, and are exempt from probate
- Durable power of attorney for finances: A legal document giving someone authority over your finances if you become incapacitated. It can also help prevent conservatorship proceedings if you lose the ability to act independently
- Advanced Health Care Directive (AHCD): This document ensures a trusted agent carries out your healthcare wishes. An ACHD also states your preferences for end-of-life medical care and eliminates your family from having to guess as to what treatment you do or do not want
- HIPAA authorization: A HIPAA authorization is another essential estate planning document, as it provides authorization that ensures your designated healthcare agent can legally access your medical records and speak with your medical professionals
How Can Estate Planning Help My Family Avoid Probate Court?
The state’s probate process is often burdensome and expensive, unnecessarily depriving many families of essential financial resources as they wait for the procedure to be finalized. Proper estate planning can help to eliminate the wait and ensure that your family can confidently face the future.
One of the most effective methods to help your family bypass probate court is to create a revocable living trust. A revocable trust is an essential tool that allows you to maintain control of your assets and exempts those same assets from the probate process.
Another powerful yet easy-to-implement estate planning tool is using beneficiary designations on life insurance policies and retirement accounts. Beneficiary designations enable these vital financial resources to be distributed directly to your beneficiaries, thereby avoiding the need for probate.
Similarly, joint tenancy with right of survivorship can be used when two or more individuals co-own property. When a co-owner dies, their interest in the property transfers directly to the surviving owner and does not become part of the probate estate.
Because everyone has different circumstances and needs, it is always best to hire an estate planning attorney who can advise you of what options will best suit your needs.
What is the Difference Between an Irrevocable and Revocable Living Trust?
One of the questions that our law firm is frequently asked concerns the differences between an irrevocable and revocable living trust. Although both types of trusts allow beneficiaries to avoid the probate process, they each have distinct differences.
Irrevocable Trusts
As the name implies, an irrevocable trust generally cannot be changed or canceled unless the beneficiaries agree or a court permits it. Once created, irrevocable trusts limit the trustor’s ability to access the resources placed in the trust. They are ideal for those individuals who wish to shield their assets from lawsuits or creditors.
Revocable Living Trusts
Recovable living trusts offer many advantages, including the ability to modify or revoke the trust at any point in the trustor’s life. Even so, unlike irrevocable trusts, any assets placed in a revocable trust are still considered your property and are not safe from lawsuits or creditors.
If you are unsure which type of trust is right for your life circumstances, allow our highly-trained estate planning attorney to advise you of your legal options.
What are Some of the Most Common Types of Trusts Available in California?
Along with irrevocable and revocable living trusts, individuals can utilize several other types of trusts to accomplish their estate planning objectives. Some of the most common trusts available include:
- Special Needs Trusts: Special needs trusts are created to help individuals who have disabilities have access to financial resources without jeopardizing their ability to receive government benefits
- Qualified Personal Residence Trust (QRPT): A type of irrevocable trust that allows an individual to transfer their personal residence to beneficiaries, while still allowing them to live in the home rent-free for a specific amount of time. After the term ends, the residence is then passed on to the intended beneficiaries. Some of the key advantages of a QRPT are that beneficiaries receive the property at a reduced gift tax cost, and any future appreciation is exempt from the trustor’s taxable estate
- Dynasty trusts: Dynasty trusts are irrevocable trusts designed to protect a family’s wealth for multiple generations. Any assets placed into a dynasty trust are shielded from creditors, lawsuits, and federal estate and gift taxes. California state laws allow dynasty trusts to exist for 21 years after the death of the last individual who was alive when the trust was created, or until the trust no longer has monetary value
When Should I Consider Updating My Estate Planning Documents?
You should review or consider updating your estate planning documents every three to five years to ensure they remain aligned with your current goals. If you are a business owner, it is advisable to review your estate plan annually to ensure it complies with state laws.
Reviewing and updating your estate plan is also essential if you have experienced a significant life event. Some of the most common major life events that should facilitate changes to a current estate plan include:
- Marriage
- Divorce
- Death of a spouse, beneficiary, executor, or successor trustee
- Birth or adoption of children
- A substantial shift in your financial circumstances
- Health changes
- Relocating to another state
Failing to update your estate plan could result in unintended beneficiaries inheriting assets, such as in cases of divorce. Failing to review or modify an estate plan appropriately could also negatively impact your family’s future as they wait for probate to conclude before being able to access financial resources. In other instances, an outdated estate plan could result in you losing control over being able to make your own financial or medical decisions.
How Can Estate Planning Help Me Protect My Assets As I Grow Older?
As many Californians grow older, they begin to worry about the cost of medical care and the worry that they may have to go to a nursing home. A nursing home stay can quickly become cost-prohibitive for most families, who may need to look toward Medicaid to pay for long-term care. Medicaid has strict guidelines and a five-year look-back period when determining eligibility for benefits.
An estate planning attorney will review your situation and work with you to determine the best strategies for asset protection while also preserving your wealth for future generations. For example, your attorney may recommend creating a revocable trust that allows you to maintain control of your assets without the worry of your heirs losing your home to Medi-Cal during probate.
Suppose you have questions or concerns about protecting your hard-earned assets as you age. In that case, our estate planning attorney can review several options, including incapacity planning, that can give you the peace of mind you deserve.
Contact Tree of Life Law Firm Today to Learn More About Our Estate Planning Services
Tree of Life Law Firm is proud to serve the residents of Santa Clara County and assist them with their estate planning needs. We understand that planning for your death can be challenging but we offer compassionate representation to ensure that your affairs are in order.
We offer clients a range of services, from incapacity planning, business succession planning, and reviewing and updating existing estate plans. Regardless of your worries or concerns, we are dedicated to helping you plan for your family’s future.
If you have questions regarding asset distribution or concerns about how your property will be divided after you pass away, our dedicated legal professionals are ready to help.
Contact our estate planning law firm today at 408-539-9858 to schedule a complimentary phone call, and we will begin working on your case.