Site icon Jason S. Buckingham, Attorney & Counselor At Law

What estate plan documents do you need?

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This post is a follow up to my last post about the various estate plan documents and what they do.

There is no one-size-fits-all approach to estate planning. People do not need a full-blown estate plan at all times. Why not? Because estate planning is all about managing risks, and risks vary throughout a person’s lifetime. So, your document needs will change over the course of your lifetime.

Have you been to a baby shower recently? A housewarming party? A wedding? A high school or college graduation? All of these occasions are good times to think about planning for the future. If you are reading this post, I encourage you to share the information with your loved ones.

In California, if you are a homeowner, then you should have a revocable living trust to avoid Probate. If you own a home, then you have probate risk, because the maximum probate exclusion amounts (as I posted back in April) are significantly lower than the average value of a California home. Probate is time consuming: in many California counties, the process can take 2 years or longer. And the statutory probate commissions and court fees are expensive: for a $1 million estate, the statutory commissions total $46,000.00 (these fees can be higher on court approval, for “extraordinary” services like selling a house during the probate), and court-related fees (filing fees, legal publication fees, and probate referee fees) will average a few thousand dollars. How does one avoid probate risk? The most comprehensive way, where the client retains the most control, is with a living trust.

When a person has a trust, they also have a special kind of will, often called a pour-over will. This will is limited by design, because the trust does all the work of a traditional will.

For people who don’t own enough assets to have probate risk, a simple will, combined with Pay-on-Death designations, is often a suitable estate planning alternative.

Every competent person over 18 should have a Durable Power of Attorney and an Advance Health Care Directive, to avoid conservatorship risk. Having incapacity documents is just as important as having estate specific documents, because incapacitated people who don’t have proper documents have to go through an expensive and time-consuming court process called Conservatorship.

Parents of minor children should have a Nomination of Guardians, to state their choices for people to act as guardians for their children.

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