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East Bay Estate Lawyer – Serving your east bay estate planning and litigation needs
East Bay Estate Lawyer – Walnut Creek, Oakland, Berkeley, and the surrounding area
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Effective January 1, 2020, personal and real property valued under $166,250 may not need to go through the probate process. Previously, personal and real property had to be valued under $150,000 to be exempt from the lengthy probate process. If the decedent’s personal and/or real property is believed to be under $166,250, the petitioner (i.e. a spouse or child) can request a court order which determines the petitioner has succeeded to the personal and/or real property of the decedent. Additionally, starting on January 1, 2020, any heir or beneficiary of the decedent can file to transfer title of the decedent’s real property so long as the real property is valued under $55,425. Previously, this was only an option if the decedent’s real property was valued under $50,000.
These adjustments will be readjusted on April 1, 2022 and then again in 2025. While there are adjustments to the value cap of the personal and real property of the decedent, there are still other restrictions that must be met to avoid the probate process.
A recent client of mine had an existing estate plan that he and his wife had prepared decades before. I have changed the details, but the substance is the same.
He wanted to make changes to his estate plan. He thought that under his current estate plan, he was giving his baseball memorabilia to his brother and his jewelry to his nephew. He decided now that instead wanted everything to go to charity.
When I reviewed his estate plan, I found that his estate plan didn’t say any of that!
He had used a mail-order estate planning service, similar to many internet services of today. There were documents he had sent to the mail-order service, and those documents said what he wanted, but his wishes hadn’t been incorporated into his estate plan.
The lesson here is that even if you already have an estate plan, read through it, and ensure that what you want is going to who you want. You only have one legacy. Be sure to secure it properly.
I came across an article in Forbes today called “Estate Planning is Dead.” It is dangerously misleading about the need for a proper estate plan, but buried under all of that is the true message that Mr. Scott, the author, believes and was trying to deliver. And it is a message I can get behind.
That message is that traditional estate planning isn’t about you, it is about what will happen when you die. It is a plan based around the two great inevitabilities: death and taxes.
Estate planning, with the proper planner, can and should be more. It should be about your legacy. What you have brought into this world, and are still bringing into this world. Proper planning is more than a snapshot of who you are. It is a projection of what you will be and a plan to be even more of who you are.
Meeting with clients, many have to take a deep breath and say something like “Here we go!” when they start to make their plan. It feels more like they are about to jump out of an airplane instead of making a sound financial decision. But it is a sound decision, not just for the estate, but for YOU. As estate planning draws to a close, my clients feel relief, secure in the knowledge that they can live their lives with a significant chunk put finally in its place.
Dare to reorient your thinking about estate planning. Think about YOUR future.
Famous food critic Anthony Bourdain’s fortune, initially reported at $16 million, is being probated in New York at $1.2 million. This could be just misreported information, but often travelers like himself will have offshore assets that will not be probated in America.
In addition to his cash and tangible assets, most of which was left to his daughter, he left his frequent flyer miles to his wife. Not all frequent flyer programs will allow miles to be passed on, but if you travel as often, or even a tenth as often as Anthony Bourdain, this is another area to consider when making an estate plan.
Everything changes in time, including what we have and who we want to give it to. Changing your will is not overly complicated, but it is important to do it the right way. There are a few ways to do it.
A codicil is an addendum that adds to or changes the terms of your will. Like a will, the document must be witnessed by two uninterested witnesses. It should be kept with your will, and you should let some trusted people know where it is and that it exists.
Since most wills are short documents, rewriting a will can also be done relatively quickly and simply, as long as all of the legal requirements of writing a will are met. The old will should be phyiscally destroyed, and the new will takes its place.
It is a brave new world of digital assets. Instead of trekking to a rental store for physical media, now we merely boot up our computer, turn on our television, or flick on our phone to access digital assets in libraries with more content than our local rental store could ever hold.
Our photos fill digital albums, and so does our music and our correspondence.
When someone passes away now, we can’t sort through their memories (the music and movies that spoke to them, the photos they kept, the letters they wrote) without access.
Getting access and keeping access depends on where the assets are stored.
Facebook: Facebook allows users to add a legacy contact to their account. This person will be able to pin photos and change your picture after you pass away, but they won’t be able to post as you. A relative can also remove the account after you pass if you don’t want it online anymore.
iTunes and Amazon digital assets: Your iTunes music/videos and Kindle books are nontransferrable assets since they are only licensed. That means that when you pass away, nobody else gets to use them. If you want your loved ones to have access to these assets, you should write your passwords in a password manager or a secure location and give the information to your executor.
Google (Gmail, photos, etc.): Google has a tool called the “inactive account manager” which allows you to pass everything Google to someone if your account becomes inactive for a preset period. I use three months. It also allows you to send a final text message to the executor regarding the account.
If you have questions about setting any of this up, or other estate planning issues, contact Gotto Law today.
The Tax Cut and Jobs Act signed into law on December 22, 2017, doubled the estate tax exemption. So nobody needs an estate plan any more right? Unfortunately not. This doubling is not slated to last forever, and depends highly on who is in control of congress when the bill sunsets in a few years.
You should look at this instead as a window to make changes that could save you millions. If you answer yes to any of the following questions, you should review your estate plan with an attorney.
To speak about any of these changes with a responsive, qualified attorney, click or call today.
Earlier this week I wrote about how probate costs run into the tens of thousands even for homeowners that only have a condo. The family I met last week was understandably angry at the idea of probate. Why do you have to pay the government tens of thousands of dollars when you die just to give your house to your children? The answer is you don’t, but only with proper planning, and a will is usually not enough.
Why do I need to go through probate if I already have a will?
Because your will is just the start of the probate process.
First, the court has to examine your will to ensure that it is a valid will. Then, once it has determined it is valid, the court must appoint a personal representative to distribute the deceased’s assets. Someone, usually the executor or an attorney, has to:
These all take time and money. The estate must cover the cost of Judges, clerks, lawyers, administrators, and all of the time and overhead associated with these people. These procedures are in place to ensure that the wishes of the deceased are carried out to the fullest.
For the majority of cases where the heirs aren’t arguing about, or even thinking about, who will get what, these costs can seem like an unfair burden. Still, it is the price we pay to ensure that even the least among us has his or her wishes carried out.
Often, these costs are avoidable through proper estate planning. Rather than pay the tens of thousands later, and go through the lengthy probate process, you can increase the speed of distribution and decrease the costs by making plans well in advance.
Last week I participated in a clinic to provide simple wills for seniors. One senior attended because her doctor recommended that she have a will prepared. She had a simple estate with only a condo and a few small bank accounts and wanted to ensure that her condo passed to her children.
We advised against doing the will even though her estate was worth only about $500,000. Why? Because in California, an estate worth over $150,000 in probateable assets MUST go through the probate process, so a simple will would actually cost a lot more than going to see an attorney.
The probate process is expensive. The government sets the cost of probate, and this year, probate costs 4% of the first $100,000 of the gross value of the probate estate. 3% of the next $100,000. 2% of the next $800,000. 1% of the next $9 million.
That means that for a $500,000 estate, probate fees are $13,000. That is just the state fee. The attorney and potentially the executor also need to get paid.
The estimated attorney and executor fees, in this case, are roughly equal to the probate fees, so passing the estate via simple will ends up costing well over $30,000.
For typical California homeowners with homes worth over a million, these fees can be over $60,000 easily, and even more expensive depending on the complexity of the assets involved.
Both the woman and her adult children didn’t understand why it would cost so much to pass on something she already owns. The answer is that there are much cheaper and faster ways to ensure your property gets to the those you love, but none of them are free. There are various ways to set up the transfer via deed and trust, all of which cost less than $5,000.
I’ll explain why probate is so expensive later this week, but for now, just know that a little preparation, even in the simplest of cases, can save a lot on the back end.
To sum up, even with just a small condo, failure to have an estate plan will cost your estate tens of thousands of dollars, where for a few hundred or thousand up front, you can be sure your property goes to your heirs quickly and efficiently.