What is Estate planning and What are the Options?

What is Estate Planning and why is it important?

If you have real property or assets valued over $150,000 you should have a proper estate plan in order to avoid probate.

Estate planning is also important in case you become mentally or physically disabled. If you don’t have an estate plan, the court will control how your assets are used to care for you by appointing a conservator whether you trust that person or not.

Estate planning involves creation of several documents that all complement each other. Some of those documents are:

1. Revocable Living Trust Agreement which includes:

a. Trust’s name (can be whatever you wish)
For an individual, it is most common to use a person’s full name such as:
“The John Smith revocable living trust”.
For a married couple “ The John Smith and Mary Smith Revocable living trust” or “ The Smith family revocable living trust”);

b. Current marital status of the Trustor;

c. Currently living children;

d. Deceased children (if any);

e. If there are any deceased children, it is important to note if they have any surviving children.

2. Declaration of Trust (a one-page notarized document, signed by the Trustor(s), that states the Trustor(s)’ intention that all of the Trustor(s) property, wherever located, is to be titled in the name of the Trust).

3. Certification of Trust; this is a short document which establishes the provisions of a Trust. It instructs banks and other financial institutions to legally transfer title of a financial account to the name of the Trust.

4. Assignment of Personal Property; this document transfers ownership of any and all personal property other than real estate into a living trust that a person owns at the time of signing or that the person acquires thereafter.

5. Assignment of Business Interest; transfers a person’s interest in a proprietorship, partnership, or Limited Liability Company membership interest, into a revocable living trust.

6. Trust Marital Property Agreements; if a couple is married and wish to keep separate property, and so on.

7. Last Will and Testament (“Pour Over Will”).

8. Trust Transfer Deeds and Preliminary Change of Ownership Reports.

9. Funding Letters.

It is important to point-out that a trust is not the only estate planning option to avoid probate. There are many other instruments which might come in handy in some simple cases. One of them is a simple revocable transfer on death deed.

What is the best way for you to complete your estate plan?

The first option is “do it yourself”.

There are a lot of self-help materials on-line and in public libraries for educating yourself on estate planning. Nolo books are probably the most helpful and comprehensive. I recommend them for the do it yourself option.

You should educate yourself from multiple reliable sources to become informed about the documents that make up an Estate Plan and how they all relate to each other.

You can do your Trust yourself using an on-line program. The cost for such programs range from $59.99 (Nolo basic on-line) to $349 (LegalZoom).

Those are fine companies and if you precisely follow their manual, the documents will be valid. However, it is wise to have these documents reviewed to be sure that they will act as intended if you become incapacitated or deceased. If some input info is confusing for you, be sure you contact LegalZoom attorney. You will need to pay an additional cost, about $200/hour, but it will assure you that you are creating a document which effectuate your intent. On-line programs are not responsible for transferring your assets into the trust.

If you choose to set your own trust, please be sure to transfer the property into the trust, executing appropriate property deeds and record it with the county.

Pay attention to the time deadline for recordings.

For example, if you decide to use the transfer on death deed, you need to be sure it is recorded with the county within 60 days of signing.

Your second option is to take care of estate planning is using an experienced paralegal. Just be sure you are using a paralegal registered as a Legal Document Assistant (LDA). LDA are licensed, registered and bonded with the county and can provide the services directly to the public.

The Pros of using LDA are that they have practical knowledge of how the estate documents need to be done properly.

They generally use the same software which most attorneys use for estate planning.

LDA can explain to you and walk through the basics of the estate planning using the educational material approved by a licensed attorney.

Some Cons of using a paralegal (LDA) is that they cannot give you legal advice. If your situation is complex and it deviates from an LDAs usual routine, they will refer you to an attorney.

Thus, you will need to go back and forth and pay both attorney and paralegal.

Also, if you need a customized provision drafted into your trust, a paralegal cannot do it for you. They are restricted to using only the software generated provisions. LDAs use the same software as most attorneys, unfortunately it is not offered on line, it more complete than version available to the public with many incorporated case schemes.

The cost for a paralegal to prepare a living trust can range from $900 to $1,300 for individuals and $9000 to $1,300 for married couples.

The third option is an estate planning attorney. In some cases saving money by doing estate planning yourself or hiring a paralegal might cause a big problem for your family when you pass away.

If your situation involves any of the following, you should consult an attorney:

The cost for an attorney to draft a living trust can range from $1400 to $1,800 for individuals and $1,600 to $3000 for married couples.

You have worked very hard for your money and you want to control where everything you own goes after your death.

You want to minimize hassles for your loved ones to go through long court process distributing your property. An estate plan enables you to accomplish that goal.

Our law office strives to be a helpful and cost efficient as possible.

We work with the complexity of your estate and your budget. Our attorney starts working directly with the client, and our paralegals will assist you in the process as well. In this way, we assure the quality and the excellence of the legal services with maximum attention and an affordable cost.

714-390-3766