Examples:

• • John’s will bequeathed his home to his children equally and donated his book collection to the library.
  • The Smith Family Trust held investment accounts, distributing proceeds to grandkids for college.
  • Sue’s will formed a testamentary trust to provide for her sister’s care if Sue died first.
  • Bill and Nancy’s living trust automatically passed their beach house to their daughter upon their passing.
  • Edith set up an irrevocable life insurance trust, removing the policy from her taxable estate.

Action Steps:

• • List all assets – real estate, accounts, heirlooms etc. Note how you want each handled.
  • Learn local intestate succession laws that control if no will exists.
  • Discuss goals with attorneys to determine if trusts make sense in your situation.
  • Clarify healthcare, childcare, and charitable giving priorities to pick suitable tools.
  • Assess your need for future changes to evaluate revocable vs irrevocable vehicles.

FAQs:

• • How much does a basic will cost in LA? Complexity determines price.
  • Is a trust always better than a will? Not necessarily. Depends on assets, goals, family, tax issues.
  • What happens if I die without a will in CA? Intestacy laws give assets to relatives by default priority rules.
  • Can I make a will or trust without a lawyer? Technically yes, but not advised. Small errors risk big problems.
  • Is a living trust revocable or irrevocable? Usually revocable while you live, but becomes irrevocable when you die.

Examples:

• • The Thompsons owned a primary home, rental condo, and vacation cabin to divide between their sons.
  • Greg had $1.2M across checking, brokerage and IRA accounts to allocate appropriately.
  • With a $500k life insurance policy, Samantha wanted to ensure care for her disabled brother.
  • Renee needed to transfer her 25% stake in a marketing firm she helped build over 20 years.
  • Mike, a successful author, had to assign literary copyrights and book royalty rights.

Action Steps:

• • Catalog physical property addresses, ownership forms, market values, debt.
  • List account types, institutions, approximate balances and beneficiaries.
  • Gather insurance policy details including coverage, premiums and cash values.
  • Document business names, structures, ownership percentages and succession plans.
  • Identify intellectual property assets, registration numbers, licensing terms and renewal requirements.

FAQs:

• • How detailed should my asset inventory be? Enough to locate and value items. More detail is better.
  • Do I include assets with named beneficiaries? Yes, to ensure coordination with overall plan.
  • What if I jointly own assets with others? Note your percentage of ownership to properly incorporate.
  • Can I assign sentimental personal property? Absolutely. Specifying bequests limits family disputes.
  • How often should I update my inventory? Annually at minimum or after major life changes.

Examples:

• • Mark and Lisa consolidated assets in a living trust, easing management now and distributions later.
  • As joint tenants, when Ron passed, his half of the condo market value automatically went to his wife Tina.
  • By making his savings account POD to his church, Hector’s gift transferred seamlessly.
  • Jessie’s TOD deed meant her daughter inherits the family farm without court proceedings.
  • Mildred gifted her grandchildren $18,000 each annually for college, reducing her taxable estate.

Action Steps:

• • Evaluate trust benefits/costs for your asset mix and family circumstances.
  • Review property deeds to confirm titles align with probate avoidance goals.
  • Update bank/investment account beneficiary designations as needed.
  • Assess your state’s laws regarding transfer-on-death options for real estate.
  • Consider strategic gifting approaches to reduce estate tax liability.

FAQs:

• • How much does LA probate cost? Statutory fees apply, approximately 4% of the estate’s value, covering attorney and executor fees.
  • What if my joint owner divorces or has debts? Their issues can entangle your asset. Consider alternatives.
  • Do all my assets have to go through probate if no trust? No, only those without direct beneficiaries or joint owners.
  • How long does probate take in CA? 9-18 months average for moderate estates, years if complex or contested.
  • Can I gift more than annual exclusion tax-free? Yes, via lifetime gift tax exemption but it reduces estate tax exemption later.

Examples:

• • In her will, grandma left her wedding china to granddaughter Lily, a talented hostess.
  • The Robinsons gave each of their 3 children a 30% share, saving 10% for charity.
  • Carlos set his sons’ inheritance to spread across ages 25, 30 and 35 to avoid reckless spending.
  • A “spendthrift trust” protected Hank’s daughter from using her bipolar disorder as a financial excuse.
  • The animal lover Turners left 15% of their estate to the ASPCA and other rescue groups.

Action Steps:

• • List all desired beneficiaries and alternate recipients if any predecease you.
  • Note cherished possessions and whom you wish to inherit these specific items.
  • Decide relative percentages for beneficiaries inheriting remaining assets.
  • Consider staggering inheritances for younger or less prudent beneficiaries.
  • Research charities matching your values to leave a meaningful legacy.

FAQs:

• • Must I treat all my children equally in my will? No legal obligation, but unequal splits risk disputes.
  • Should I tell beneficiaries what they’ll inherit? Your choice, but surprises can cause confusion and conflict.
  • What happens if a beneficiary dies before me? Name alternate “contingent” recipients to control redistribution.
  • How much can I leave to charity tax-free? No limit for estate tax charitable deduction if to qualified nonprofits.
  • Should I put conditions on heirs’ inheritance? Can incentivize if reasonable, but too many controls often backfire.

Examples:

• • Shawn appointed his CPA brother Rick as executor, trusting his organization and financial sense.
  • With an offshore asset protection trust, the Willards picked a professional fiduciary firm as trustee.
  • The Stollmans named Ellen’s sister Gina guardian, knowing she’d raise the kids with love and similar values.
  • Oliver gave his son financial POA and his doctor daughter healthcare POA for different expertise.
  • Widowed Linda made her #1 executor her eldest son, #2 her CPA, #3 her attorney for backup options.

Action Steps:

• • Select an executor who is trustworthy, prudent and familiar with your finances.
  • Choose a trustee with asset management skills, longevity and willingness to serve.
  • Name guardians who share your values and would raise your children as you wish.
  • Give financial and medical POA to loyal confidantes with applicable aptitude.
  • Ask top choices if they’re willing, have frank discussions, then list backups too.

FAQs:

• • What if I don’t appoint key roles? Courts decide for you among family, which may not match your wishes.
  • Should I name co-executors or co-trustees? Can if you want “checks and balances” but may slow things down.
  • What if my named guardian can’t serve? Always have alternates. Court may pick guardians you wouldn’t want.
  • Can I pay people I appoint? Yes, it’s common to compensate them for time and expertise from your estate.
  • How often should I review appointees? Annually at least. Update as needed if situations or relationships change.

Examples:

• • The Schwartz’s $21M estate would owe no federal tax since their estate value of $21 million is below the 2024 combined exemption amount of $27.22 million for a married couple.
  • Jorge gifted his 3 kids and their spouses $18k each ($108k total) annually to reduce his taxable estate.
  • A lifetime gifting trust let Miriam benefit her grandson while minimizing GST tax consequences.
  • When Alan died, his wife got his full $8M estate tax-free under the unlimited marital deduction.
  • The Schwartz’s $21M estate owes about $2.67M in federal tax on the excess over their $27.22M combined exemption.

Action Steps:

• • Calculate rough estate value and compare to current exemption levels.
  • Consider strategic gifting to reduce estate while benefiting heirs sooner.
  • See if a gifting trust or more advanced tools make sense for your goals.
  • For married couples, plan to maximize both spouses’ exemptions.
  • Ensure executor knows your desire to elect portability if applicable.

FAQs:

• • Do states have estate or inheritance taxes? Some do, including WA and OR, with varying exemption levels. Check your state.
  • What gifts are unlimited tax-free? Medical, education, political, charitable gifts if done properly.
  • What’s the current lifetime gift and estate tax exemption? $13.31 million per person for 2024.
  • What reduces estate taxes besides exemption? Charitable bequests, certain business assets, special trusts.
  • Do life insurance proceeds face estate tax? Yes if you own policy or have “incidents of ownership”. Proper structuring helps.

Examples:

• • In a secure portal, Karen keeps a master list of all online bank and investment logins for her executor.
  • Jamal’s will specifies his daughter gets his food blog, content, branding and mailing lists.
  • A digital heir designation tool lets Grandpa Max share cloud photo albums with family when he passes.
  • Sam uses AwardWallet to track his many point balances and has arranged spousal transfers.
  • Olivia is working with her attorney to properly allocate her valuable virtual real estate holdings.

Action Steps:

• • Inventory all digital assets – financial, business, personal and sentimental.
  • Make a secure list of account access info and instructions for your executor.
  • See which accounts have an “online tools” option to name beneficiaries.
  • Check loyalty program rules around point transferability and follow required steps.
  • Work with an attorney to properly incorporate digital assets into your estate plan.

FAQs:

• • Can I put digital asset instructions in my will? Yes but keep access details separate for security. Refer to outside list.
  • What happens to my social media when I die? Depends on platform. Some offer “memorialization”, legacy contacts or deletion.
  • How do I handle cryptocurrency keys? Offline hardware wallets recommended. Must arrange secure transfer to heirs.
  • Can heirs access my email and messages? Only if you grant permission or they go through lengthy legal process.
  • Does power of attorney cover digital assets? Not always. Check your state’s laws and POA wording.

Examples:

• • Sole owner Gina is converting to an LLC, then gifting partial interest to her daughter via a trust yearly to transition the business.
  • The founding partners’ buy-sell agreement uses life insurance to fund surviving partner’s purchase of deceased’s share.
  • An irrevocable life insurance trust owns a policy on the CEO, providing cash to help the company transition when she retires.
  • Dr. Patel is transferring his medical office condo to a separate LLC to protect it if the practice faces legal issues.
  • Key person coverage on the head software engineer will help the tech startup stay afloat if he were to pass suddenly.

Action Steps:

• • Meet with your business attorney to discuss the best entity type for succession.
  • Work with partners to review and fund buy-sell agreements as needed.
  • Create a succession plan naming future leadership and ownership transition.
  • Evaluate separating business real estate from operations into distinct entities.
  • Identify key persons and get insurance to help company weather their potential loss.

FAQs:

• • What’s the best business structure for estate planning? Depends. LLCs and corps offer more transition options vs sole proprietorships.
  • How can life insurance help business succession? Provides cash for partner buyouts, pays estate tax, helps weather losses.
  • Can I put my business in a living trust? Yes, ownership units can be held in trust for easier management and transition.
  • What happens to my company if I don’t have a succession plan? Messy – family disputes, fire sales, key employee losses more likely.
  • How do I value my business for estate purposes? Hire a professional business valuation firm for a credible appraisal.

Examples:

• • The Garcias’ trust leaves 10% of their estate to charities named in an attached list, along with their rationale to inspire heirs.
  • Avid hiker Jill made the Sierra Club a 25% beneficiary of her IRA, leaving tax-free dollars to a cause she cares about.
  • A charitable remainder trust pays the Smiths income for life, then goes to their church, providing tax deduction and predictable cash flow.
  • Retired entrepreneur Alex has a large donor advised fund he contributes to yearly for tax efficiency, granting later at his preferred pace.
  • The Wilson family foundation will continue their local education grant program for generations, cementing their philanthropic legacy.

Action Steps:

• • Make a list of causes and organizations you wish to support after you’re gone.
  • Use a simple bequest for the most flexible option, or beneficiary designations for tax benefits.
  • Consider a charitable trust or donor advised fund for more advanced tax and control benefits.
  • To create a lasting philanthropic enterprise, explore a private foundation.
  • Share your reasoning with loved ones so they understand and hopefully continue your legacy.

FAQs:

• • Is there a limit to how much I can leave to charity? No limit for estate tax charitable deduction if proper steps followed.
  • What assets are best to donate from a tax perspective? Most appreciated assets like stock or real estate avoid capital gains.
  • Can I leave my IRA to charity? Yes, smart as charity gets 100% vs heirs facing income tax on inherited IRA distributions.
  • How do I make sure the charity uses my gift as intended? Be specific in your bequest language, butsome flexibility helps if things change.
  • Can I leave money to a charity not in existence yet? Yes, with carefully drafted provisions for alternative charities if yours doesn’t materialize.

Examples:

• • The Taylors held a family meeting sharing their estate plan basics, key roles and document locations, encouraging questions.
  • In her will, Grandma Sue explained she was favoring granddaughter Amy in the jewelry division since Amy had been her caregiver.
  • The Patels welcomed their children’s honest queries about the family business succession, knowing it’s an emotional topic.
  • In a letter with his trust, Hank shared life lessons, favorite memories and hopes for his family’s future.
  • Wendy and Jack review their plan annually around their anniversary and update the kids with any changes at Thanksgiving.

Action Steps:

• • Decide what level of detail you’re comfortable sharing with loved ones about your plan.
  • Schedule a family meeting or series of one-on-one chats to overview the basics.
  • Proactively explain your rationale, especially for emotionally charged issues.
  • Write a legacy letter sharing your life lessons, values and hopes for your heirs.
  • Set a regular cadence to review and update your plan and communications.

FAQs:

• • What if my family pushes back on my decisions? Hear them out, explain your perspective, but remember it’s ultimately your choice.
  • Should I tell heirs exactly how much they’ll inherit? Your call, but many experts advise against it to avoid entitlement or gifting pressure.
  • What if I’m not comfortable discussing death with my family? Frame it as a love conversation – you’re taking care of them by planning ahead.
  • How much detail is too much to share? Every family is different. Share at least the basics, but don’t feel forced beyond your comfort zone.
  • What if my family dynamics are complicated? Even more reason to communicate proactively and work with an experienced estate attorney as a buffer.

Examples:

• • The Garcias calendar their plan review every wedding anniversary, also updating after their son’s divorce and a home purchase.
  • The Singhs’ attorney proactively contacted them to restructure their trust when the estate tax exemption doubled.
  • When his daughter had twins, James updated his will to include college funds for the new grandkids.
  • Every year, Li Wei combs through her insurance and 401(k) to confirm her beneficiaries still match her will.
  • Yolanda has a binder with all her estate docs, a spreadsheet of accounts and a USB backup, all shared with her daughter.

Action Steps:

• • Put an annual estate plan review on your calendar, also noting to revisit after major life changes.
  • Ask your estate attorney to keep you in the loop on relevant law changes.
  • Make a list of life events that would necessitate plan updates. Note as they happen and act.
  • During annual reviews, double check all beneficiary designations to ensure alignment.
  • Organize all documents in one secure place. Tell key people how to access if needed.

FAQs:

• • What are the most common life events triggering plan updates? Marriages, divorces, births, deaths, health changes, home moves.
  • How often do estate tax laws change? Congress tinkers frequently. Exemption amounts change annually based on inflation.
  • What happens if my listed beneficiaries predecease me? If no contingents named, defaults to your will/state law. Keep backups updated.
  • Do I have to use a lawyer for plan updates? Not technically, but wise to at least have them review to ensure all is properly aligned.
  • What’s a good document organization system? Whatever works for you and your family to keep things accessible and secure.

Examples:

• • The Browns chose an attorney who does exclusively estate planning after a bad experience with a family lawyer dabbling in the area.
  • With a special needs grandchild, the Garcias sought an attorney experienced in special needs trusts.
  • Cindy clicked immediately with her estate lawyer’s warm, listening-focused style, feeling at ease sharing personal details.
  • Fred’s attorney brought in a CPA to help structure his plan for optimal tax outcomes.
  • When the estate tax exemption changed, Mei Ling’s attorney proactively reached out to restructure her trust.

Action Steps:

• • Ask your financial advisor, CPA or other trusted pros for estate attorney referrals.
  • Check if candidates are members of estate planning specialty groups like NAEPC or ACTEC.
  • In interviews, ask about similar clients they’ve served and their approach to communication.
  • Inquire how they collaborate with other advisors like CPAs and insurance pros.
  • Ask how they keep clients updated on law changes and how often they recommend plan reviews.

FAQs:

• • How much does an estate plan cost? Varies widely by location and complexity. Expect $1K-$3K for an individual, $2K-$5K for a couple on average.
  • How do I find a reputable estate planning attorney? Ask for referrals from trusted sources and check specialty memberships and peer ratings.
  • What red flags should I watch out for? Avoid attorneys who dabble, overpromise, pressure sales, or have communication issues.
  • What info should I bring to my first estate lawyer meeting? Asset list, family tree, existing docs if any, and key questions.
  • How often should I communicate with my estate attorney? At least annually and as needed for life changes. Proactive attorneys will also reach out.

Questions: Wills vs Trusts

• • 1. Which factor favors using a trust over a will?
    • A) You want court oversight via probate
    • B) You want assets to transfer privately
    • C) You want to name guardians for minors
    • D) You want to make charitable bequests
  • 2. What’s a drawback of using a will alone for asset transfer?
    • A) Assets face probate delays and costs
    • B) It doesn’t allow charitable bequests
    • C) It’s harder to update than a trust
    • D) Assets face higher taxes than via trust
  • 3. When does a testamentary trust take effect?
    • A) During the grantor’s lifetime
    • B) Upon the will being signed
    • C) Upon the grantor’s death
    • D) Never – not a valid trust type
  • 4. What advantage do revocable living trusts offer vs irrevocable?
    • A) Better asset protection from creditors
    • B) Ability to make changes anytime
    • C) Removal of assets from taxable estate
    • D) No need to transfer title to assets
  • 5. What key estate planning function can ONLY a will, not a trust, accomplish?
    • A) Name an executor
    • B) Name a property manager
    • C) Name a legal guardian for minor children
    • D) Name a trustee

Answers: Wills vs Trusts

• • 1. B) The privacy of trust asset transfers, avoiding public probate court, is a key trust advantage over wills alone.
  • 2. A) Assets passed via will face probate, which carries costs (about 5% of estate) and typical 9-18 month delays.
  • 3. C) A testamentary trust, created via will, only becomes active upon the grantor’s death, unlike living trusts.
  • 4. B) Revocable living trusts allow changes anytime, but irrevocable trusts permanently remove assets.
  • 5. C) Only a will can name a guardian for minor children. A trust doesn’t cover this key need.

Questions: Asset Inventory and Beneficiary Choices

• • 1. What intellectual property should be included in an estate asset inventory?
    • A) Copyrights
    • B) Trademarks
    • C) Patents
    • D) All of the above
  • 2. Why is noting how assets are titled important for married couples?
    • A) Impacts whether the asset is shared or separate property
    • B) Determines if the asset gets a step-up in basis upon death
    • C) Affects creditor protection for the asset
    • D) All of the above
  • 3. What’s a key benefit of specifying bequests for sentimental personal property?
    • A) Avoids the asset going through probate
    • B) Reduces the property’s capital gains tax
    • C) Ensures the asset goes to intended recipient
    • D) Qualifies the asset for a charitable deduction
  • 4. What’s an advantage of leaving percentages of your estate to heirs vs specific dollar amounts?
    • A) Keeps the estate from going through probate
    • B) Adjusts for estate growth or decline over time
    • C) Makes the inheritance eligible for annual exclusion gifting
    • D) Eliminates the heir’s capital gains tax on the assets
  • 5. Which technique helps ensure a spendthrift beneficiary doesn’t quickly blow an inheritance?
    • A) Leaving a lump sum distribution
    • B) Disinheriting the beneficiary
    • C) Creating a lifetime spendthrift trust
    • D) Making an outright gift during life

Answers: Asset Inventory and Beneficiary Choices

• • 1. D) Copyrights, trademarks and patents are all intellectual property assets that should be inventoried and planned for.
  • 2. D) For married couples, how assets are titled (joint, separate, living trust etc) impacts division on death, taxes and creditor exposure.
  • 3. C) Specifying bequests for cherished possessions helps ensure they go to intended recipients and can prevent family disputes.
  • 4. B) Leaving heirs percentages of your estate helps adjust for value changes over time, versus set dollar amounts.
  • 5. C) A lifetime spendthrift trust with periodic distributions or restrictions can help preserve assets for a financially irresponsible heir.

Questions: Key Roles and Estate Taxes

• • 1. What happens if you don’t name an executor in your will?
    • A) Your estate avoids probate
    • B) The court appoints someone for you
    • C) Your estate goes entirely to your spouse
    • D) Your oldest child becomes executor by default
  • 2. What’s most important in choosing a trustee for a minor’s trust?
    • A) Financial savvy
    • B) Willingness to serve long-term
    • C) Alignment with your values
    • D) All of the above matter
  • 3. Which of these is an unlimited tax-free transfer?
    • A) Leaving entire estate to a spouse who is a U.S. citizen
    • B) Making annual exclusion gifts ($18k per recipient in 2024)
    • C) Paying tuition directly to a grandchild’s college
    • D) All of the above
  • 4. What does the generation-skipping transfer tax aim to prevent?
    • A) Avoiding estate taxes by leaving assets to much younger heirs
    • B) Giving too much to charities instead of family
    • C) Disinheriting a spouse in favor of descendants
    • D) Leaving assets to non-citizen heirs
  • 5. What’s a key benefit of the estate tax portability provision for married couples?
    • A) Lets a surviving spouse use the deceased spouse’s unused exemption
    • B) Allows spouses to gift split during life to double annual exclusions
    • C) Treats all spousal transfers as tax-free, regardless of amount
    • D) Enables the first spouse to die to allocate assets between beneficiaries

Answers: Key Roles and Estate Taxes

• • 1. B) If you don’t name an executor, the court will appoint someone, who may not be your preferred choice.
  • 2. D) In picking a trustee for a minor’s trust, all the factors matter – financial skill, commitment, values alignment.
  • 3. D) Spousal transfers, annual exclusion gifts, and direct education/medical payments are all unlimited tax-free.
  • 4. A) Generation-skipping transfer tax aims to stop avoiding estate tax by leaving assets to much younger heirs.
  • 5. A) Portability lets a surviving spouse utilize the deceased spouse’s unused estate tax exemption, potentially doubling it.

Questions: Updating and Communicating Your Plan

• • 1. What should trigger an immediate estate plan review?
    • A) Marriage or divorce
    • B) Birth or adoption of a child
    • C) Significant changes in assets
    • D) All of the above
  • 2. What’s a key reason to regularly review beneficiary designations?
    • A) Ensures assets go where you intend
    • B) Avoids accidental disinheritance
    • C) Keeps ex-spouses from inheriting
    • D) All of the above
  • 3. Which estate planning document is most important to share with loved ones in case of incapacity?
    • A) Pourover will
    • B) Living trust
    • C) Financial power of attorney
    • D) Advance healthcare directive
  • 4. What’s most important to include in a letter of intent to heirs?
    • A) A list of your accounts and assets
    • B) The contact info for your advisors
    • C) Your rationale, values and life lessons
    • D) Where your estate documents are located
  • 5. Which communication approach tends to work best with reluctant heirs?
    • A) Surprising them with your plan after you’re gone
    • B) Sharing every financial detail and amount
    • C) Focusing first on your love and care for them
    • D) Insisting they take over key roles immediately

Answers: Updating and Communicating Your Plan

• • 1. D) Marital changes, new children, and major asset shifts should all trigger an immediate estate plan review.
  • 2. D) Regularly reviewing beneficiary designations is key to avoid assets going to unintended or outdated recipients.
  • 3. D) An advance directive is most critical to share so your healthcare wishes are followed if incapacitated. An advanced directive is a legal document that outlines your preferences for medical treatment if you become unable to communicate them yourself.
  • 4. C) In a letter of intent, focus on conveying your values, life lessons and rationale to guide your heirs.
  • 5. C) Leading with love, care and desire to protect them usually works best in navigating reluctant heirs.

Disclaimer

The estate planning information presented in this article is intended for general informational purposes only and should not be construed as legal, tax or financial advice. While we strive to keep the content accurate and up to date, laws and regulations change frequently, and their application can vary widely based on the specific facts and location involved.
Therefore, we recommend seeking personalized guidance from qualified estate planning attorneys, tax professionals and financial advisors to address your unique circumstances and ensure your plans are properly tailored and implemented in accordance with current laws and best practices. This article is not a substitute for such individualized professional advice.