Estate Planing
Wills
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 California Business Attorneys, our trust and estate planning attorneys 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
Trusts
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 a trust and estate planning 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 trust and estate planning attorney to explore your options.
