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Q: What is an “estate”?


An “estate” is all that a person owns at the time of their death–real estate and personal property. For example: personal residence; vacation home/condo/time-share; IRA’s, life insurance; bank accounts, stock brokerage accounts; paintings and jewelry, etc.

What is estate planning?


Estate planning is a process that accomplishes the following objectives: 


  • Controlling property while you are alive and well; 

  • Taking care of yourself and your lived ones in the event of a disability; 

  • Giving what you have to whom you want and how you want upon your death. 


An estate plan is simply a plan to look at all the assets owned by an individual or couple, consider their objectives for transferring such assets in the event of their death, and help with the smooth transfer of such assets to loved one’s with a minimum of taxes, expenses, and inconvenience.


Without a good estate plan, you and your family may loose control over your property, suffer through unnecessary court proceedings, and pay unnecessary taxes. The lack of an estate plan may also deprive your family of the opportunity to receive from you a lasting legacy designed to bring your family closer together.


Q:  Isn’t estate planning just for the very wealthy?


No, estate planning is not just for the wealthy. Although there is a common misconception that “estate” planning is only for the extremely rich, simple estate planning is extremely important even for low value estates, especially for anyone who has minor children, owns real estate, or owns assets worth over $150,000. Estate planning helps avoid the extremely high fees and hassles of probate that will drain even low value estates.


Q. Who needs estate planning?


Everyone does — whether an estate is large or small. Either way, you should designate someone to manage your assets and make health care and personal care decisions for you if you ever become unable to do so for yourself. For many, such “life planning” is the most important aspect of an estate plan. If your estate is small, your plan may simply focus on who receive your assets after your death, manage your estate, pay your last debts, and handle the final distribution of your assets. If your estate is large, you will want to consider various ways of preserving your assets for your beneficiaries and reducing or postponing the amount of taxes which otherwise might be payable after your death. If you don’t plan ahead and make proper legal arrangements for the management of your assets and affairs, California’s intestacy laws will take over upon your death or incapacity. This may result in the wrong people getting your assets, and could result in higher estate taxes.


Q:  What happens if I die without an estate plan?


The state will decide how your property is distributed if you do not make an estate plan. The court system will be in charge of choosing your executor and the guardians for your minor children. The court will have jurisdiction over the assets inherited by minor children until they reach the age of 18, at which time each the child will receive full control over the assets, without guidance or advice from others. Also, in almost all cases, your estate will be greatly depleted by its having to pay huge probate fees, court costs, and attorneys fees that arise upon a person’s dying without an estate plan.

Q: What are some common estate planning documents?


Common estate planning documents include the following:


Will – A will is a written document that tells the court how to divide your property at the time of death. It also tells the court who should be the guardian for your minor children and your executor.


Trust – A trust is a written legal document that provides instructions on how the property titled in the trust’s name is to be managed and distributed. Trusts have the advantages of increased privacy, increased asset protection for surviving spouses and children, planning in the event of a disability, legitimate tax avoidance and probate avoidance.


Durable Power of Attorney – A durable power of attorney is a written document wherein you (principal) appoint someone else (agent) to have the authority to act on your behalf. The agent will have the authority to act even in the event you become disabled. The authority granted to the agent can include all financial transactions, managing investments and making gifts.


Health Care Power of Attorney/Advanced Health Care Directive – A health care power of attorney also known as an advanced health care directive is a written document wherein you (principal) appoint someone else (agent) to have the authority to make health care decisions on your behalf when the you cannot make them yourself. This legal document can contain your wishes concerning such matters as life-sustaining treatment and other health care issues and instructions concerning organ donation, disposition of remains and your funeral. Your agent should have a clear understanding of your views with regard to continuing health care decisions under certain circumstances. (You can revoke the directive at any time, as long as you are still competent.)


HIPAA Medical Release Authorization – The Health Insurance Portability and Accountability Act of 1996 (HIPAA) ensures the privacy of your health care information. These strict privacy rules may restrict your loved ones from obtaining access to this information when necessary. A HIPAA Authorization will allow the individuals you designate to obtain this information.



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