WILLS AND TRUSTS AND INTESTATE SUCCESSION. OH MY!
Have you wondered whether you have the right estate planning documents in place? Should you have a will or a trust? Do you need an estate plan at all?
If you do not own real estate and you have named beneficiaries on your bank accounts, a will could be sufficient to distribute your assets. It is important to understand that a will does not avoid probate. If you own a home, even with a mortgage, a probate will be required when you die. Probate is a long, costly legal process where the court oversees your executor carrying out the wishes in your will. Probate fees and costs are approximately $50,000 for a typical San Clemente estate of $1,000,000. The fees are set by statute. This is money your family will never receive.
If you want to avoid the cost and time delays of probate, consider a trust. Your trustee is given the power to transfer your assets without a court order. Trusts can eliminate or reduce taxes, protect your assets, and they are private. Your assets and beneficiaries will not be a matter of public record as in probate.
If you die without a valid will or trust, the law decides who receives your assets and the court decides the person who will act on your behalf. California Probate Code 6401 and 6402 determines who receives your property. If you are married and your assets are community property the court will give your assets to your spouse at the end of the probate process. However, consider the outcome if you and your spouse die in the same accident. If you are married and your assets are separate property they will be divided one-half to your spouse and one-half to your only child or the children of your only child if your child is deceased. If you have more than one child, your assets will be divided one-third to your spouse and your children will share two-thirds.
If you do not have a plan in place, it is time to act. If you want to direct who is in charge of your estate and where your assets will go, see your attorney.