Proper estate planning (will or trust) in California can save you a lot of money, headaches, and heartaches.
While you are living you can prevent the need to have a conservator appointed- this happens if you lose the ability to make decisions for yourself. Setting this up in advance through a will or trust means your assets are protected - even from you - should you lose the ability to make decisions for yourself. Many attorneys charge upwards of $20,000 to represent you in a California conservatorship proceeding, and if it is contested costs can be much higher.
When you pass away, your estate may go through probate, a long and expensive process in California. Probate can take years, and the costs are prohibitive. The basic statutory fees for probating a one million dollar estate are current;y $46,000. Remember, your house is valued at its gross value for probate, not your equity value. The larger your estate, the more expensive probate becomes.
Even worse, the Probate process comes when you or your loved ones are trying to cope with loss.
In addition, your estate may be subject to the Federal Estate Tax, at rates up to 45%!
A Revocable Living Trust, sometimes known as a Living Trust, generally takes your estate out of probate, and is administered privately. The probate process in California is public- anyone can see what is in your will. This is not true of a living trust. The "administration" of a living trust is equivalent to the probate process of a will.
The cost of a living trust varies depending on which attorney you hire, and how complex your estate plan needs to be. If you own a number of rental houses, for example, the cost will be higher because a new deed needs to be prepared for each property. But if you own property in multiple states and don't have a living trust, you'll have to go through probate in each state!
You can expect to pay around $2,000 or so for a basic Living Trust package in California. Most attorneys will also prepare other documents for you, including a Durable Power of Attorney, and Advance Health Care Directive among others. If you need estate tax planning, planning for special needs children, pets, etc the cost will of course be higher.
Some attorneys charge by the hour, and some offer a flat rate. Like dealing with any other professional, you should be comfortable with your attorney. Many lawyers offer a free initial consultation that allows you to discuss your needs and to see if you are comfortable with that attorney.
The worst thing you can do is to do nothing. The probate process in California can be onerous, involving lots of paperwork that must be done to court standards, and it will come at the worst possible time--when you are dealing with the loss of a loved one. If there is no will specifying where your assets go, those assets will be distributed according to the California Probate Code--which may not be what you want.
Preparing a living trust can ensure that more of your assets go where you want them to go, they go there more quickly, and a properly drafted living trust helps protect you from an expensive an humiliating conservatorship proceeding. Most all Californians will benefit from preparing a living trust, and all Californians benefit from doing estate planning.
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