Wednesday, July 21, 2010

Why Do I Need A Written Estate Plan?

In California, everyone has an estate plan even if they have no Will or Trust. That is because California law provides a detailed scheme of who is entitled to your property when you die. However, very few people would be happy with the results under the law because the law does not take into account an individual's wishes or family situation.

Regardless of who you are, how much money you have, who you want to inherit your estate or when you want them to receive distribution, your wishes are likely very different from the basic disposition provided under California state statutes. For instance, if both spouses ultimately die from a common accident but one outlives the other, even for a short time, all of the property of both spouses could go to the survivor's family rather than be split between the heirs of both spouses.

Having no estate plan can also be a problem for those with minor children. For example, if a couple with children died, California law provides that the children would be entitled to full ownership of the property, including any businesses, at age 18. Most people consider age 18 far too young an age to receive a full inheritance.

However, with a well thought out Estate Plan you can make sure that your children are well cared for (food, clothing and schooling) by a responsible adult trustee and that your minor children receive their inheritance at an age when they are more mature and less likely to blow through their inheritance on frivolous items.

Proper estate planning is important as a means of avoiding Probate Court. When you die without a Will or with a Will but no Trust, your heirs are required to bring the matter to Probate Court. Until such time as someone is appointed by the Probate Court, your assets are frozen and your heirs are unable to access your accounts to pay any bills and expenses.

In addition to being costly, Probate Court is time consuming and many acts require Probate Court approval. Even the most basic of estates can take over one year to close. Moreover, all documents filed in Probate Court are fully accessible by the public.

Another pitfall with the no estate plan philosophy is that lack of clarity most often breeds disputes and heirs tend to fight over the smallest of estates. These disputes are expensive to litigate and the fees incurred by the estate come from the estate's assets.

A properly drafted Will and Trust can avoid both the application of California's default provisions, as well as unnecessary expenses and the inconveniences of Probate Court. Not only does this keep the estate administration private, but it ensures that your wishes are followed and done so in a timely fashion.

We encourage you to contact an experienced estate planning lawyer to create an estate plan or to review your existing estate plan and determine whether changes should be made. For a complimentary 30 minute telephonic or in-person consultation, you can e-mail Hank Moravec at hm@moravecslaw.com or call him at (626) 793-3210.

Most sophisticated estate planning attorneys, such as our firm, quote a flat fee and there are no products being sold or conflicts of interest in advising you on the best estate plan for you and your family. Refer to my prior post on "What Does Estate Planning Cost?" for information about our firm's flat fees for estate plans.

Posted by Henry J. Moravec, III. Henry (Hank) Moravec is a partner at Moravecs, A Professional Law Corporation, and is a very experienced Los Angeles estate planning attorney, Los Angeles trust attorney and Los Angeles probate attorney. He has more than 20 years' experience in estate planning and is extremely dedicated to his clients and helping them create a plan that is tailored to their wishes, finances, helps avoid probate and takes into account their families' unique situation.

The firm website is http://www.moravecslaw.com/. The firm is located at 2233 Huntington Drive #17, San Marino, CA 91108. There is ample free parking adjacent to the firm's office.
The firm is a boutique estates and trust law practice specializing only in Estate Planning, Probate, Trust Administration, Beneficiary and Trustee Representation, Tax Law, and Nonprofit Law. The office is located in San Marino, California, a suburb of Los Angeles in the San Gabriel area located 20 minutes from downtown Los Angeles. The firm represents clients throughout California and its attorneys appears in probate court throughout Southern California