Planning for your death can be a daunting thought, but it’s a reality we all have to face and should prepare for. To ensure that your loved ones will receive the support they need, its best to make an estate plan before you leave this world. Tumer & Sharif are experienced in many will and trust solutions.
The last thing people want to think about is their death. But as much as we want to avoid it, it is an inevitability we all must face. Preparing for your death is a smart and compassionate choice for the love ones you leave behind. We have seen too often family members fighting over the deceased estate. Sometimes the rightful inheritor is deprived of the estate by people who attempt to get a “piece of the pie.” The result of this can lead to years and years in probate court, costing family members much anguish, breaking of family ties and possibly losing a large chunk of the estate to attorney fees. Preparing a will helps settle many future unnecessary conflicts.
At Tumer and Sharif we draft wills to your specific needs making sure that all your final wishes are met while remaining compliant with California laws. As there are many options for your final bequests we will provide you with all viable options so that you can make and informed decision. Do not wait until its too late. Far too many times we have seen clients drag their feet when it comes to contemplating and executing a will. We are here to make the process as smooth as possible so that your family and loved ones are provided for according to your wishes.
Types of Wills: Simple Wills, Pour Over Wills, Couple Wills, Conditional Wills, Advanced Directives
What’s the best way to provide for my family after my death?
Setting aside tax planning considerations, there are essentially two options that allow you to control how your estate is distributed: a will or a living trust. Many people are confused by these options – they often think the big difference between these options is the tax bill, but that is not true.
The real difference between the two is probate court. Do you want to have your property go through court and a judge’s determinations, along with the costs and time wasted in this process? A will has to go through probate, but a living trust doesn’t
Other than a few formalities, the difference to you between the two is minimal. Living trusts are sometimes called “transparent trusts,” because you will not even notice a difference in your life or activities when you have one. Living trusts are much more expensive than wills, but the time and money saved usually more than makes up for this. In fact, there are some cases where avoiding the time that your property is held up in probate can make a huge difference to your surviving spouse or children.
With few exceptions, our advice is usually to get a living trust.
Why should I get a lawyer to help me with my will or living trust?
Everyone knows that there are several options for legal advice available. Some companies offer legal documents, including wills and living trusts, for rates far below what a lawyer will charge. For some people, that’s just fine. At Tumer & Sharif, if we think you would benefit from such a service, we happily let you know.
But these services are one-size-fits-all and very basic. Is your property the same as everyone elses? Do you want to leave specific bequests or put conditions on how your property will be used? You need professional help to craft a plan that fits your family and your desires.
Even more important is the experience and knowledge that a lawyer can bring to this process. We have been through probate court and estate fights with other clients. We have seen the traps and pitfalls that can arise after a death. We ask the right questions, make you think about the right scenarios and defuse problems before they arise. It’s heartbreaking to watch family members turn on each other in a dispute over an inheritance. Don’t let your family end up at each others throats because no one ever asked you the right questions.
Have you thought about what happens to you if you are incapacitated or hospitalized? Does your will or trust account for one of your heirs passing before you do? Will your plan work if you and your spouse die simultaneously? These, and more, are serious questions that a lawyer will be sure to answer, but that are often not covered by generic estate plans.
Trusts serve as a powerful estate planning tool. They can help avoid the lengthy and painful probate process, offer considerable tax savings, and much more. Trusts give a person the ability to control the finest details of his or her estate and for this reason, many choose to create a trust. There are types of trusts, each of which provide different benefits and consequences. For example, irrevocable trusts transfer ownership and control of the asset during the lifetime thus making the giving of the asset a life-time gift instead of a gift after death and charitable trusts benefit charities and can sometimes help avoid estate taxes upon death. Speak to an attorney about the pros and cons of each trust and what would best make sense for you as each trust carries different tax and control consequences.
How do I avoid “death taxes”?
People are rightfully afraid of estate tax – sometimes called “death taxes.” The tax rate on estates (simplifying the technicalities a little) is 40%. So people imagine that leaving a $300,000 house to their heirs could result in a $120,000 tax bill – maybe requiring their spouse or children to sell the house to pay the taxes. But this is not really the case.
The fact is that the first $5.6 million of your whole estate is tax-free ($11.2 million for married couples). Not too many people leave estates large enough to trigger a tax. While this is one the first questions we ask our clients – we want to make sure to minimize the tax consequences of their estate plan – many of our clients are not even close to this amount.
The most important consideration in planning your estate is usually not taxes, but the cost, time and convenience of actually distributing your estate to your loved ones.
That said, if you do have a possible estate tax liability, there are solutions, but they depend very much on the specific details of your estate and your desires for how to distribute it upon your death. One of the more common strategies is to take advantage of the annual gift exclusions, which effectively increase your estate tax exclusion.
To put it in simple terms, each year you are allowed to give a certain amount to as many people as you like, tax free. This year, that amount is about $15,000 (it changes a little each year, usually going up). So, if you gave $15,000 to each of your spouse and three kids each year for ten years, $600,00 of your estate would have passed to your heirs without triggering any tax consequences. There are, of course, various considerations to even this strategy, but you can see that there are tax planning options.
If you believe you might be in danger of paying death taxes, you should see a professional to explore your options.