California estate planning is an important process. It’s also a very personalized process. With all of the different forms and strategies available, it can be difficult to know where to start. In this post, we’re going to answer 5 questions about California estate planning basics. Our hope is that by providing the answers to these questions, you’re better prepared to talk with your estate planning lawyer to get through the process.
Related: California Intestate Laws: Here’s What Happens If You Don’t Have a Will
Do I Really Need an Estate Plan?
Yes. At the very least, you should have a California Last Will and Testament. Although there is such a thing as a small estate affidavit that could minimize the time and expense of probate for your loved ones, dying without a will means that the state must follow intestate laws to determine how your assets will be distributed.
Depending on the size of your estate as well as your personal desires, a well-planned estate can help ensure that your wishes are honored in a way that is cost-effective and less time consuming. There could also be fewer legal issues that arise, such as a contested will.
Related: California Will: What If You Don’t Want to Provide for Your Heir?
Can I Use Free Estate Planning Forms I found Online?
There are a lot of websites that offer California estate planning basic documents. The forms are often available for free which makes them very attractive for people looking to save money. Regardless of whether it’s a form to create a will, an advance healthcare directive, or a trust, there are serious problems that could happen. First, there’s no way for you to know with total certainty that the documents offered actually comply with California law. Laws change, but that doesn’t mean the website offering the form updated it. Creating an estate plan from free forms you found online could mean that none of your forms are valid in the eyes of the court, the hospital, the bank, or anywhere else.
If the probate court finds that your will or other estate planning document isn’t valid, probate can take longer and cost more. It can also mean that the probate court follows intestate law to distribute your estate. This is a problem that can be avoided by going through the California estate planning basics with a qualified lawyer.
Those websites that provide you with free estate planning forms cannot provide you with legal or tax advice. It’s very likely that the form you’re using isn’t the one that will benefit you and your family the most. This is why it is imperative to talk with a lawyer when you’re planning your estate.
Who Should I Choose as the Executor?
Choosing an estate executor is an important job. Many people choose their spouse. Others choose one of their adult children. Some people choose an individual to whom they are not related. It’s less about the identity of the person and more about choosing someone who displays certain characteristics as well as who can and will fulfill their duties. You want to choose someone who will:
- Honor your wishes;
- Work to have amicable relationships with heirs;
- Be trustworthy and fulfill their fiduciary responsibilities; and
- Get legal or tax help if necessary.
Related: What Are the Duties of an Estate Administrator in California?
Do All Assets Go Through the Probate Process?
No, not all assets must go through the probate process. Generally, the assets that are exempt include:
- Assets held by the decedent in joint tenancy;
- Assets placed in a living trust;
- Life insurance proceeds when there is a named beneficiary;
- IRA benefits when there is a named beneficiary;
- Savings or checking accounts in the name of decedent that name a beneficiary or a “payable on death”;
- Savings or checking accounts where the decedent acted as Trustee;
- Assets considered “payable on death”;
- Assets considered “transferable on death”;
- Certain assets being passed to the surviving spouse; and
- Community property between spouses because of a right to survivorship (although a spousal confirmation hearing may still occur).
What Are the Most Commonly Used California Estate Planning Documents?
The most commonly used California estate planning documents are a Last Will and Testament, advance healthcare directive, and a durable power of attorney. There are also trusts that are used, but they are chosen based on the needs of the person going through the basics of California estate planning.