What do we mean by estate planning. It is a lifelong process in which you evaluate your situation and plan for the future. It includes those processes used to develop techniques and a formal plan to carry out the personal, investment and business goals of an individual, with emphasis on wealth management and transfer. It includes planning for your retirement, for the possibility of disability, and for death. An estate plan starts with preparing an accurate, complete, and detailed listing of ones assets and liabilities using current estimated market value. Emphasis is generally focused on reducing the federal unified transfer tax burden of the federal estate, gift and generation skipping taxes. 

     When discussing estate planning, a couple of misconceptions that I frequently hear are: 

  • 1. "I do not have enough property for an estate plan." 
  • 2. "I have a simple will, I cannot afford anything else."
  • 3. " Do I need a lawyer?" 

     An estate plan deals with far more than just property. A simple will can prove costly in the event of an incapacity and often times results in making the federal government your largest heir. Yes, a lawyer is needed to prepare the required documents to insure the plan carries out your wishes. Every estate plan will have as a minimum a will, and most likely a durable power of attorney and a revocable living trust. 

     Every California resident has a formal estate plan. The one provided by statute, or one specifically prepared by and for the testator to suit his or her wishes. California law provides for the order of distribution of property upon death according to statute for anyone who has not provided for the disposition in a will, trust or other document. 

     In some cases the statutory ordering may be what a testator would have done in any event. The "statutory estate plan" does not provide for appointment of a guardian to take care of minor children, does not provide for handling one's affairs in the event of incapacity, and generally results in payment of the highest federal estate tax possible for a given situation. Formal estate planning covers a lot of living situations in addition to the ultimate disposition of property at death. 


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