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- Probate:
Probate is a court procedure in which a court determines whether the
decedent left a valid will and then appoints someone to pay the
decedent's debts and taxes, identify the decedent's heirs, and
distribute the decedent's property in the probate estate according to
the decedent's will, if the decedent left a will. Probate may make sense
in some cases. Probate in some states, such as Washington, can be a fairly simple
and inexpensive process.
In contrast, probate in California is costly in both time and
money. In California, probate fees to pay the personal representative and the
attorney who must work on the probate process are set by statute, and
are based on the gross value of the estate. For example, the combined
representative and attorney fees for the probate of a $400,000 California estate would be $22,000.
Cost of publication and filing fees can raise the
cost by several hundred dollars. Termination and distribution of
a fairly simple trust with assets of $400,000 on the other hand should
cost much less. Note, however, that administration of a trust can
be complex, and just because one has a trust does not mean that one
avoids all administration costs, or eliminates all estate taxes.
- Trust Administration:
Even with a properly funded trust, when the owner of the trust property
(called the "Settlor") dies, there is work to be done. The assets in
the trust must be appraised, and the assets outside of the trust, if
any, not passing automatically to a new owner must be attended to.
If the Settlor is married and the trust directs that a second trust
shall be established on the first death, this subtrust must be
established and funded. Any beneficiary of an irrevocable trust must be
notified of the trust's existence, and certain state and federal
agencies must also be notified of the Settlor's death. If estate taxes
are owed, they must be paid within 9 months of the death, or penalties
will begin to accrue.
- Will:
A will is a legal document in which a person states various binding
intentions about what he or she wants done with his or her property
after death. In order for the instructions to be followed, a will
must go through the probate process. Compare to a trust, where
the instructions are followed outside of the probate process, so long
as the trust is properly funded, i.e., the decedent's assets have been
transferred to the trust. All properly prepared estate plans
contain a will, if only a "Pour-Over Will" (see below) that transfers
to the trust assets that were not transferred to the trust during the
client's lifetime. A will may also be used to accomplish things a trust
cannot. For example, a will may be used to nominate guardians for
minor children, provide funeral or burial instructions, or exercise a
power of appointment. A will alone, without a trust, is typically
appropriate only if assets are limited, there is no spouse or
child, and probate costs are not an issue.
- Guardian:
A guardian is a person appointed by court order to take care of the
person, or property, or both, of someone unable to do so by reason of
minority or incapacity. A “guardianship of the estate” allows a parent
to nominate someone to manage and control the minor's property until
the minor reaches age 18. A “guardianship of the person” allows a
parent to nominate someone to supervise the minor's daily living,
including schooling, medical care, clothing, shelter, and food. The
guardian of the person is also responsible for the nurturing aspect of
child raising.
- Pour-Over Will:
Pour-over wills are most commonly used for two purposes. One purpose of the pour-over will is to
protect against a possible failure to transfer later-acquired or overlooked assets to a Living Trust.
In California, if the value of the assets that were later-acquired or overlooked does not exceed $184,500 (Adjusted for inflation), the trustee may be able to collect the assets without a probate as a "small estate" (under California Probate Code 13100).
In Washington, a small estate is defined as an estate of less than $100,000 in probate assets.
The second purpose of a pour-over will is for when a revocable trust has only nominal assets during creator's
lifetime. This is sometimes a strategy used to maintain privacy of the trust distribution terms, because, for a will, the terms are public record. In such instances, a pour-over will permits the property to be probated on death which may be desirable if there is a risk of significant creditor problems,while still avoiding the public disclosure
of the final disposition of the property. A pour-over will in California can avoid a full blown probate if the Schedule A: Trust Assets is kept up to date. A pour-over will in Washington will only fund the Trust through probate.
- Health Care Directive:
Also known as a living will, the health care directive is a
document that directs what you want to have happen to you if you are in
the hospital if you are not able to speak on your own behalf regarding
such important issues as treatement for pain or being placed on life
support. The health care directive allows you, as the
“principal” to grant certain authority to another person, known as your
“agent,” to act on your behalf. The agent is the person who steps
in to work with the hospital or other health care provider to decide
what type of treatment you should receive, and whether you are to
receive artificial life support if there is no reasonable expectation
of recovery.
- Power of Attorney:
A power of attorney is a written document where you, as the
“principal,” grant certain authority to another person, known as your
“agent” or “attorney in fact” to act on your behalf. A power of
attorney allows you to exercise your right to control your financial
affairs during incapacity.
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Estate Planning & Trust Administration
Fee Schedule
We
use a fixed fee format for an initial estate plan, so unless the work
that you request us to do for you is significantly outside of that
ordinarily required to prepare an estate plan, we will not charge you
any additional amount. Our fee for a married couple's estate plan,
including their Living Trust, Pour Over Wills, Health Care Directives,
Power of Attorney Documents starts at $3200, and is based on overall
complexity and whether both spouses are U.S. citizens. Our fee
for a single individual who would like an estate plan and needs a
Living Trust starts at $3000. If the work requested is
outside of the normal range, or is to amend an existing plan, we bill
at $400.00 per hour.
Trust administration work is billed at $400.00 per hour, with a $1200 initial deposit.
First Steps.
My usual first step with prospective clients is that we set up an initial meeting (via Zoom in most cases) in order to discuss their needs and specific questions
they may have about their particular situation. As a courtesy,
the first meeting, up to a maximum of 30 minutes, is free. The
basic questions of a typical estate plan or trust administration
scenario can usually be answered in that time. After 30 minutes, I will
ask if the client(s) wish to continue the estate planning or trust
administration discussion. If so, at that point billing begins at
my usual hourly fee of $400/hour. At the end of the discussion,
should you decide to go forward with an estate plan, all fees from the
initial discussion will be credited towards your estate plan (billed at
a fixed fee). If not, any fees (beyond the free first 30 minutes)
will be due at the end of the initial consultation. Finally, note that
any scheduled appointment canceled without appropriate notice (less
than 24 business hours) is subject to a $200 cancellation fee.
If you would like to schedule
an initial meeting with me, please use my online calendar or call my office at 408-741-2298.
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