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FAQS ON ESTATE PLANNING
1. What is estate planning?
Estate planning is essentially the process of:
Setting and implementing goals under which you can preserve, grow, manage, use, and enjoy your assets during your lifetime;
Establishing a mechanism to protect and transfer your property to your loved ones and/or charities at the specific times and in just the manner you wish;
Ensuring that your estate is not diminished unnecessarily as a result of unnecessary taxes and estate administration costs;
Eliminating (for your loved ones) unnecessary inconvenience, frustration, uncertainty, delay, and court intervention in administering your estate; and
Having appropriate documents prepared and executed to carry out the above.
A comprehensive estate plan will generally include the following documents: Revocable Living Trust, "Pour-over" Will, Durable Power of Attorney for Management, and an Advance Healthcare Directive. Other supporting documents include an Assignment, Certification of Trust, Trust Transfer Deed(s), sample funding letters and estate planning instructions.
2. Why should I invest in an estate plan?
Creating an estate plan is a proactive way for you to help yourself achieve meaningful goals with respect to your finances, family, and lifestyle. A carefully considered, customized estate plan serves as a powerful, lasting asset preservation vehicle and succession plan. It should provide you with the comfort and happiness that comes with controlling your financial affairs and providing for your loved ones in precisely the manner you wish.
According to an old adage, "if you fail to plan, you are planning to fail". The simple truth is that if you die without a will or living trust, you forgo the opportunity to choose to whom, when, and in what manner your assets are distributed. The State of California will make these determinations by applicable statutes. Furthermore, by failing to plan, or failing to do so properly, your heirs will almost surely receive significantly less as a result of unnecessary taxes and/or estate administration fees and costs.
Putting it bluntly, because you are not immortal! Unfortunately, there are no guarantees that any of us will not die prematurely. Nevertheless, many people procrastinate – often because they are either uncomfortable discussing their mortality or they proceed under denial – by blindly assuring themselves that their age and health are such that "nothing will happen". Sadly, I have been involved in all too many cases where a person died prematurely – suddenly and/or accidentally – who often had good intentions to establish an estate plan, but never did. These individual's failure to establish an estate plan often cost their loved ones tens or hundreds of thousands of dollars, not to mention creating otherwise avoidable cost and inconvenience (and sometimes family dissension).
Besides securing a smooth, orderly asset succession plan when you're gone, a Living Trust (unlike a simple Will) operates immediately upon execution. This can be very valuable if you ever become temporarily or permanently incapacitated. The simple fact is that the only way to secure continuity of financial management, be certain your assets will be distributed to your loved ones how and when you desire, avoid estate diminution from unnecessary estate administration costs and taxes, and minimize inconvenience and delay for your loved ones upon your demise, is to "do it now".
3. Why should I invest in an estate plan now?
4. What are the primary documents included in an estate plan? What do the documents in my estate plan do?
a. Living Trust – Serves as a "Will substitute" in most respects, including directing the distribution of your assets when you're gone. A Living Trust also designates trustees and successor trustees; sets out standards under which the trustee(s) manage your financial affairs during your life; (for married couples) sets up a structure under which estate tax savings may be realized; and (for married couples) may enable assets that were owned by the spouse who dies first to be accessible to the surviving spouse yet controlled for the benefit of children, loved ones and/or charities on the death of the surviving spouse.
b. "Pour-over" Will – Provides a safety net for any assets that are not transferred to the trustee of your Living Trust by directing that these assets be poured over into the trust and distributed according to its terms. For those who have minor children/dependents, it is also the appropriate document for designating a guardian.
c. Durable Power of Attorney for Management – You appoint a trusted person as your agent (called your "attorney-in-fact") to handle your financial affairs and sign documents on your behalf. This can supplement the powers held by the trustee of your Living Trust (often the "attorney-in-fact" and successor trustee of your living trust is the same person) in that your agent will have legal authority to transact business for you as to non-trust assets. You can choose to make these powers effective immediately or make the powers "springing" – springing into effect only if and when you are temporarily or permanently incapacitated.
d. Advance Health Care Directive – You appoint a person as your agent to make health care decisions on your behalf if and when you are unable to make these decisions for yourself. Besides appointing an agent, this document provides a valuable opportunity for you to make your wishes known about matters such as when life support systems should be used or discontinued, and whether organ donations are authorized.
In addition to these primary documents, the supporting and peripheral documents that are normally a part of our personalized estate plans include: (1) Assignment, (2) Certification of Trust, (3) Comprehensive Estate Planning Instructions, (4) Sample Funding Letters, and (5) Trust Transfer Deeds.
Of course, many factors are involved in determining which documents are appropriate for a given individual or married couple. Generally, we prepare the following documents, each of which is accompanied by our advice and guidance during client conference:
a. Living Trust – Serves as a "Will substitute" in most respects, including directing the distribution of your assets when you're gone. A Living Trust also designates trustees and successor trustees; sets out standards under which the trustee(s) manage your financial affairs during your life; (for married couples) sets up a structure under which estate tax savings may be realized; and (for married couples) may enable assets that were owned by the spouse who dies first to be accessible to the surviving spouse yet controlled for the benefit of children, loved ones and/or charities on the death of the surviving spouse.
5. Do I need to be "rich" in order to justify investing in an estate plan or, more specifically, a Living Trust?
In short, no. You absolutely do not need to be rich to justify investing in an estate plan. For anyone with gross assets of $166,250 or more (e.g. if you own a home), Probate avoidance alone is usually more than enough justification to establish a customized, comprehensive estate plan.
6. How much does an estate plan cost?
Typical flat fees for estate plans:
Unmarried Individual: $3500*
Married Couple: $4000*
Note 1: Examples of "extenuating circumstances" include, but are not limited to, those in which clients: a) wish to customize their Living Trust (e.g. distribution scheme) in an unusually complex manner; or b) need provisions for a "Special Needs Trust" (usually for a child or grandchild) to be included within the Living Trust; or c) consist of a married couple with one spouse (or both) being a non-U.S. Citizen, in which case special QDOT (Qualified Domestic Trust) provisions may need to be included; or d) have a "blended" family – a second or subsequent marriage and/or children from different marriages/relationships.
Note 2: For clients who own more than one California property, deeds for any number of additional properties may be prepared for a fee of $500 each, including applicable recording fees; and if you own property in other states, we can facilitate the preparation, execution and recording of appropriate trust transfer documents via a reliable third party service).
* These are not guaranteed prices. The flat fee you are charged for a comprehensive, personalized Estate Plan, drafted by Mr. Silverman, may differ from the aforementioned typical flat fees if extenuating circumstances are present. For a quote or complimentary discussion regarding your circumstances or intentions, please contact us at R. Silverman Law Group.
Without knowing more about your situation, it is difficult to determine in advance, with certainty, an appropriate fee quote. However, in general, the flat fees specified below will be applicable absent certain "extenuating circumstances" that make planning more complex and time-consuming, and therefore more expensive (see Note 1). These fees are inclusive of all routine related services and costs, including two client conferences; document drafting; preparation of one California real property trust transfer deed (e.g. your home); notary fees; deed recording fee; postage; estate planning binder; electronic (PDF) delivery of signed documents and forms; and telephone and photocopy charges.
7. How much can an estate plan save me?
For a more detailed outline of the benefits you stand to gain by employing an experienced estate planning attorney to help you create and implement a comprehensive, personalized estate plan for you and your loved ones, please refer to the R. Silverman Law Group "Estate Planning Primer" or contact us at R. Silverman Law Group.
A lot. A comprehensive estate plan, structured by an experienced estate planning attorney, and based on an in depth understanding of your financial situation and your desires, can save you and your loved ones anywhere from thousands of dollars, to tens of thousands of dollars (or, in extreme cases, hundreds of thousands of dollars). Moreover, non-financial "savings" – those in the realm of promoting family harmony and enabling your loved ones to administer your estate with the minimum possible inconvenience – can be substantial.
Financial savings come primarily in the form of Probate avoidance – Probate is a statutorily imposed estate administration court proceeding, in which the local judge supervises the administration of one's estate to ensure that the Will (if there is one) is valid, creditors are paid, and the assets are distributed to beneficiaries who are entitled to them. Additionally, if your estate exceeds or may likely exceed the applicable Federal Estate Tax exclusion amount ($11.7 million in 2021), an experienced estate planning attorney will often be able to employ some "advanced" strategies to help mitigate potential Estate Tax liability.
8. Are there any income tax consequences, property tax implications or additional tax filing requirements if I invest in a Living Trust?
The establishment of a Revocable Living Trust results in no income tax consequences, no property tax implications and no additional tax filing requirements (except, in some instances, after the death of one or both spouses; however, these additional filing requirements are nearly always much less costly and inconvenient than the alternative of not establishing a trust – Probate administration).
9. How complicated is the creation, funding, and managing of a living trust?
A myth that I am often faced with dispelling is that establishing, funding, and managing a living trust is time consuming, complicated, and inconvenient. In reality, it is not. It takes little more time to establish than a Will; it is no more complicated than a comprehensive Will; it is generally quite straightforward to fund; and it is virtually identical to managing non-trust property.
10. Why should you choose to work with R. Silverman Law Group as your estate planning attorney?
Thoughtful, ongoing planning, in-depth client conferences and counsel, customized drafting of appropriate documents, execution of documents with proper formalities, tax analysis, and funding assistance are all important aspects of an estate plan. for over 28 years, Mr. Silverman has helped thousands of clients by drafting, reviewing, amending, helping to administer, and advising them about their estate plans.
Also, estate planning should not be done in a vacuum. Real estate, business, financial, and insurance matters frequently need to be identified, assessed and integrated with your estate plan. Mr. Silverman's substantial real estate and business experience allows him to bring a real "value added" component to his estate planning services. Given this background, his focus on building and maintaining long-term attorney-client relationships, and his keen desire to serve his clients as a trusted counselor, Mr. Silverman is eager and well-equipped to serve his clients' best interests.
Finally, estate planning is an ongoing, evolving process; not a one-time event. Accordingly, clients are usually best served by seeking to create a long-term attorney-client relationship. When clients take this approach, their attorney often becomes a trusted advisor on whom they confidently rely and with whom they feel comfortable. As a result, they are relieved and pleased with their ongoing ability to use and adapt their estate plan in a way that best suits their changing needs and those of their loved ones. Mr. Silverman not only encourages the development of a long-term professional relationship, but he is willing and able to work with clients' financial, business, insurance and/or tax professionals as part of their estate planning "team", whenever that is necessary or desirable. He also has excellent resources available in the community, enabling him to refer clients to one or more such professionals when appropriate.
Most people understand that they should not treat estate planning casually nor hire anyone other than a competent attorney whose practice emphasizes estate planning. The process should involve much more than downloading forms from the internet, having an inexperienced or narrowly focused attorney (or worse, a paralegal service or "trust mill") produce "canned"/"one size fits all" documents, or hiring someone who fails to provide expert counsel, guidance and trust funding assistance. Moreover, if you do not use a seasoned, careful estate planning attorney, you can easily make a mistake that could cost you and/or your loved ones dearly in any number of different ways.
11. How do you get started?
After the introductory meeting, We will send you an introductory letter, a "bio", a Confidential Client Estate Planning Questionnaire, and an Attorney-Client Fee Agreement; and he or one of his staff members will schedule an appointment for your first planning conference. At this first planning conference, you will discuss with us your prospective estate plan at length.
The first conference involves: a) you and us getting to know each other; b) you sharing, and us listening to pertinent information you feel comfortable sharing about yourself and your loved ones, and generally what you hope to accomplish with your Estate Plan; c) Our educating you further about the estate planning process, documents we propose to prepare for you, and applicable law; and d) Our interviewing you and guiding you through the process of determining how you would like us to tailor your estate plan in a manner that is best suited to meet your specific needs and desires.
In the days or weeks following the first conference (depending on your timeline, your needs and our schedule), we prepare your documents, send them to you for your review, and schedule your second planning ("signing") conference. When the documents are in final form and meet with your approval, you will come in to our office for the signing conference. At this signing conference, you will review the key provisions of each document, sign the documents while observing the required formalities (signing under notary public and witnesses, both arranged by our office at no additional cost to you), and discuss trust "funding" – transferring of your assets into your Living Trust. Finally, We and our very capable staff are available, as needed, in the days and weeks following your signing appointment to assist you and/or the financial institutions with whom you do business with trust funding and/or other estate planning-related questions or concerns.
We look forward to the opportunity to provide you with preliminary information, answer any questions you may have, and help you develop and maintain an estate plan that will be meaningful and helpful for you and your loved ones.
Please call us or anyone on our excellent staff for information and/or to schedule an introductory meeting. Generally, an introductory meeting consists of a telephone conversation or personal meeting of approximately 15-30 minutes, during which we can start to learn a bit about you and your loved ones, determine your primary goals and needs, answer any of your preliminary questions, and give you an appropriate fee quote or estimate. This introductory meeting is complimentary.