Most Americans feel confused about estate planning. It’s hard to decipher what you really need and how the different parts of an estate plan work together. A recent survey showed that three-quarters of Americans are confused about what they need. Only about 40% have a Will and less than 20% have a Trust. But most people do understand that it’s not good to have no plan. Here is why it's essential to plan ahead.
Probate is Expensive
We’ve all heard stories about an estate being caught up in the probate process which, in California, is time-consuming and expensive. Probate is necessary when someone dies without proper estate planning documents in place and if their total assets exceed $150,000. The cost for probating an estate is based on the gross asset value which means all that you own is included. The amount you may owe on those assets is not considered. For example, if you own a home worth $900,000 and owe $850,000, the gross value of your home is $900,000. In California, probate costs are set by statute and do not include any special fees for selling off assets, litigation, and tax preparation to name a few.
Other Benefits of Estate Planning
As you can see, it’s critical to plan ahead. Why not have the proper documents in place to save your family thousands of dollars in probate fees, as well as provide quick, easy distribution of your assets in a way that you want them distributed? And most importantly, avoid family conflict. Also, if you have minor children and want to name a guardian, your estate plan is how you do it. If you want to express your wishes relating to personal healthcare decisions including end of life care (i.e., whether to maintain or remove life support) then consider getting your plan in place. Not only can you provide guidance in these matters, you are also able to transfer specific assets at your death, including your home and a business if you want it to remain in family hands as one generation gives way to the next.
If you’re confused about what you may need to plan for your family I’m happy to talk with you. Call me today!