Estate Planning Basics
When a person becomes incapacitated due to an accident or serious illness, or in a worst-case scenario, dies unexpectedly, the fate of their entire estate can be uncertain. Without a clearly delineated estate plan, questions regarding the ownership of assets and other estate-related issues arise between family members. By planning ahead and working with an attorney to develop a comprehensive, structured estate plan, your survivors can avoid conflicts with each other and with the courts over the division of your estate. A professional Los Angeles estate planning attorney can make sure that your family and your assets are protected, and your final wishes are honored.
What is an Estate Plan in California?
Estate planning allows you to ask questions about your wealth and assets in the present—questions that you won’t be able to answer if you become incapacitated or ultimately pass away. Naturally, you’re in control of your estate while you’re of sound mind and body. But there may come a time when you’re unable to make important decisions regarding your property and your health. An estate plan is a way to ensure that regardless of what happens to you, there’s a set of instructions for your family and loved ones to follow. That means that no matter whether you’re temporarily or permanently incapacitated, or you die, your estate will be handled exactly as you wish.
An estate plan acts as a clear, tried and true method for ensuring the proper distribution of assets. If can also cover aspects of your care and the care of loved ones. In the absence or an estate plan, asset distribution may fall in the jurisdiction of the probate court, and California probate court involvement can lead to costly court-mandated asset allocation, and the process can last for years.
Types of Estate Documents in California
Estate planning is a flexible, adaptable series of actions that an attorney can mold to various client needs. A will or testament is a set of instructions, and it activates upon the death of the testator. It dictates asset distribution, names an executor, and can even give directions about things like the method of burial. A trust, on the other hand, allows the transfer of assets from one person to another, but doesn’t require either party to be dead. A trustee is appointed to oversee the assets and approve expenditures for the beneficiary.
A health care directive allows you to dictate which medical procedures you’ll allow should you become incapacitated. Authority of any particular area of an estate can be transferred to another person via a power of attorney, which appoints someone to make financial or medical decisions on the behalf of the principal.
Costs and Expenses of a Probate vs Estate Planning Fees
Statutory fees are the base payments for a probate lawyer and administrator or executor. To calculate the statutory fees, you start with the gross value of the estate. The fees are awarded on a sliding scale and can escalate very quickly based upon the estate’s value.
- 4% on the first $100,000 = $4,000.00
- 3% on the next $100,000 = $3,000.00
- 2% on the next $800,000 = $16,000.00
- 1% on the next $9,000,000 = $90,000.00
- 1/2 of 1% on the next $15,000,000 = $75,000
For a very modest estate the statutory fees can exceed $18,000 very quickly. These fees are payable to the attorney and the administrator or executor. In addition, the attorney may charge extraordinary fees at an hourly rate of $400-$600 for other services rendered to the estate such as; sale of property in probate, family disputes, will contests and other disputes. On the other hand, an estate planning attorney will generally prepare an estate plan at a flat rate. With the escalating housing prices in Los Angeles why pay statutory fees on the gross value of your estate? The idea is to transfer your assets to your loved ones not an attorney! Most simple estate plans are less than $5,000. Using an estate planning attorney to prepare your estate plan not only keeps your estate out of the Los Angeles Probate Court, but it can also get more money to your loved ones, faster and without the necessity of paying tens of thousands to the attorney and executor.
The Law Office of Colette T. Davis is an Estate Planning Law Firm that serves clients in the Los Angeles area
Emergencies and accidents happen every day. Planning ahead can avert a future family crisis during an otherwise tragic time. Many estates are often contested, regardless of size. These contests drive up the costs in probate very quickly. Working with our estate planning law firm ensures that there is a plan ready and waiting for any scenario and can save you time and money. Call now for a free consultation and know that your beneficiaries will be protected.