We provide counseling based estate planning services to protect our clients and their families from probate and estate taxes while preserving family legacies. Services include:
Estate Planning
Why use a living trust-based estate plan?
The cornerstone of our estate planning is the revocable living trust. This is a will-substitute which is designed to avoid probate and minimize estate taxes. The probate process in California is not only burdensome for family members and beneficiaries, but is also considerably more expensive than the cost of establishing a trust-based plan. California's probate system is one of the most complicated in the U.S., and also provides for some of the highest fees. Establishing and properly funding a revocable living trust during your lifetime should avoid the probate process entirely.
A living trust enables you, during your lifetime, to plan for and control the smooth disposition of your assets following your death.
Estate Tax Basics
Calendar year |
Estate and GST tax deathtime transfer exemption |
Highest estate and gift tax rates |
2001 |
$675,000 |
55% |
2002 |
$1 million |
50% |
2003 |
$1 million |
49% |
2004 |
$1.5 million |
48% |
2005 |
$1.5 million |
47% |
2006 |
$2 million |
46% |
2007 |
$2 million |
45% |
2008 |
$2 million |
45% |
2009 |
$3.5 million |
45% |
2010 |
N/A (taxes repealed) |
top individual rate under the bill (gift tax only) |
2011 |
$ 1 million |
55% |
Protecting Families
The basic estate plan consists of trust, will, advance healthcare directive and power of attorney. In the will, clients with minor children nominate guardians, ensuring that their children will not be subjected to the foster care system. Without a will, custody of children is determined by the state.
Advance Healthcare Directives
Executing an Advance Healthcare Directive provides healthcare providers and family members with a legal record of a client’s preferences regarding end-of life medical care, often easing the burden on family members of making difficult decisions.
Charitable Planning
For charitably inclined clients with taxable estates, we propose advanced planning solutions including Charitable Trusts (CRUT, CRAT, Charitable Lead Trusts), which enable families to give to their charities of choice while minimizing taxes and leaving assets to their families as well.
Gifting programs, irrevocable trust planning, and other advanced techniques are available for reducing the size of taxable estates. Life Insurance Trusts: Insulating Life Insurance Proceeds from Estate Tax
Generally, the death benefit of a life insurance policy is taxable as part of the policy owner's estate.
Establishing, funding, and properly maintaining an Irrevocable Life Insurance Trust
removes the proceeds from the policy owner's estate, ensuring that amounts pass to beneficiaries free of estate tax.
Probate In California
For clients who have lost loved ones without trusts, we offer assistance with the process of probating the estate.
Probate FAQ (Frequently Asked Questions)
What is intestacy?
Without a will or living trust, at death property not held in joint tenancy, or which will not pass by a contractual arrangement (such as a life insurance policy) will pass under California's laws of intestacy according to a statutory order of priority (generally the spouse, then children, then parents, etc.).
When are estates subject to the probate
process?
Property with an aggregate value in excess of $100,000 which passes by will or intestate succession is subject to probate administration, a process by which the court determines the validity of a will and who is entitled to receive distributions of the decedent's property either under the will or according to the laws of intestacy. (Property held in joint tenancy or which will pass by contractual arrangement will not be subject to probate administration.)
What types of fees are associated with probate?
Unless compensation has been otherwise provided for in a will, attorneys and executors who administer the estate in probate are entitled to fees according to a statutory schedule. In addition to the statutory fees, attorneys and executors are entitled to "extraordinary" fees for services such as selling real property and preparing tax returns. The statutory fee which attorneys and executors are each entitled to is a percentage of the appraised value of the estate assets without regard to encumbrances:
- 4% of the first $100,000
- 3% of the next $100,000
- 2% of the next $800,000
- 1% of the next $9,000,000
- .5% of the next $15,000,000
- over $25 million "a reasonable amount to be determined by the court"
The following chart shows some of the statutory fee calculations:
Gross Value of Estate |
Fees due both Attorney and
Executor, each |
$100,000 |
$4,000 |
$300,000 |
$9,000 |
$500,000 |
$13,000 |
$1,000,000 |
$23,000 |
How long does the probate process take?
From the time probate proceedings are initiated to the final distribution of estate assets to beneficiaries, an average of one to two years will have elapsed. During this time most important aspects of estate administration, including notice to heirs, beneficiaries, and creditors, and inventorying and appraising estate assets, require court oversight and approval. Beneficiaries may not receive their share of the estate until the probate process is completed. Additionally, the continuation of a business which is a part of the decedent's estate may be problematic during probate. |
