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Serving families in Irvine and throughout Orange County, CA with comprehensive estate planning services.
Many think “Estate Planning” is about planning for property after death, or about avoiding estate or death taxes - but it is much more than that. It is about people: spouses, children, favorite family members, and close friends; their security and prosperity without you. It is about your values.
You are unique and therefore your estate plan should be unique. A skilled advisor can assist you to accomplish things that most people have never thought about and don’t understand, since estate planning is complex, and changes occur in legislation and circumstances. It is living planning as well as planning after death. It is about the time necessary to identify and accomplish goals and about the money and property necessary to create and maintain a lifestyle for your loved ones after death. It is also about state and federal taxes: income, gift, estate and generation skipping taxes. But there are many issues in estate planning more important to most people than taxes.
Estate Planning Goals
- Who will be the guardian of your minor children ? Someone you chose or someone the government chooses?
- Will you plan to privately administer your estate or will you allow the government to plan for you ? In other words, will you be a voluntary or an involuntary philanthropist?
- Who will take care of you and how will you be taken care of if you become disabled?
- Who will make medical decisions for you, including life support, and how will they be made if you are disabled?
- How can you assure that your entire family is not burdened by taking care of you if you become disabled?
- How can you protect yourself from creditors?
- How can you pass your family values with your property to your children?
- How can you assure that your children’s character will not be spoiled by their inheritance from you?
- How can you leave your assets fairly, if not equally, to the children of a blended family?
- How can you assure that your surviving spouse will not worry about the management of your estate if you pass away?
- How can you protect your surviving spouse from a new spouse who becomes a financial predator upon his/her remarriage after your demise?
- How can you develop a family business succession plan during life or after death?
- How can you avoid disputes among your family members after your demise?
Estate Planning Mistakes and Misconceptions
There are many misunderstandings about estate planning. One of the most common misunderstandings is the thinking that “I only need a trust to avoid probate and accomplish my objectives and any trust will do…” Like many misunderstandings, this one is based upon a twisted version of the truth.
The truth is that a trust is a contract and courts honor the intentions of the parties to a trust which provides for the private administration of their estate at disability or death so that, theoretically, they do not then need to go through the administrative nightmare of probate court. However, that is like saying that the only thing you need to be successful in business is a business plan and any business plan will do. No one would believe that, yet many people whose trusts I have reviewed actually believed that they only need sign the trust to avoid probate and accomplish their objectives. Many years of experience administering trusts that I have not drafted is that only around 50% actually achieve the client’s objectives.
There are many reasons for this. The primary reason trusts fail is that the assets have not been transferred to the control of the trust. In my opinion, the second major reason trusts fail is that they do not have the correct trustees. Another important reason is that no one ever explained the multitude of alternative benefits in estate planning to the client, so that they could make intelligent decisions about what they wanted to accomplish.
The client had perhaps consulted one of the many attorneys simply providing a “trust book salesman” service. They purchased a boilerplate trust, never updated it, and died without knowledge of the benefits that might have been available if they had been correctly advised. The boilerplate trust failed because it didn’t accomplish the client’s true needs.
Other reasons trusts fail are because changes in the law have not been implemented into the trust, or that the trust has not been updated to reflect the client’s current wishes.
For more information about the reasons that trusts fail, or estate planning alternatives, please reference Mr. Wittick’s short presentation on Estate Planning Alternatives. To learn more about fundamental estate and trust planning, please reference the somewhat longer presentation entitled The Truth about Estate Planning.
Estate planning is also a process, that if not carried out privately by you, will be completed publicly and very expensively by the government.
Your Estate Plan, Done the Right Way
A good definition of fundamental private estate planning is a plan to control your property while you are alive, take care of you and your loved ones if you become disabled and give what you have to whom you want, the way you want and when you want and to save every last tax dollar, professional fee and court cost possible. |