A comprehensive estate plan is a foundation that your financial future is built upon. It should not be some cookie cutter piece of paper, but rather a carefully crafted document that is built upon sound advice from an experienced attorney. Hastily drafted plans often lead to disputes among heirs and costly litigation. Here are just a few examples:
Choosing the Wrong Trustee: Having all of your children serve as the successor trustees to avoid hurting anyone’s feelings sounds like a good idea, but if decisions require unanimous consent then problems can arise, particularly if one child is living in a house owned by the trust. Sometimes choosing the oldest child to be the trustee is also a mistake.
A comprehensive estate plan starts with a revocable trust. Placing assets into a trust avoids the expense and delay of Probate. A $1,000,000 estate will cost as much as $50,000 to Probate and can take well over a year before the assets are distributed. To administer a trust with the same assets will cost as little as $2,500 to administer and assets can be distributed much sooner.
In addition to the trust it is important to have a Health Care Directive so that your final wishes are honored if a decision has to be made about continuing care and what measures you want taken if you are too ill to express your wishes to your doctors. It is also important to have a general power of attorney that becomes effective if you ever become incapacitated. This will allow your agent to sign important papers for you.
Lastly, some families need to plan to protect assets where one or both spouses have chronic debilitating conditions, such as Alzheimer’s and will require expensive long term care. To qualify for assistance with such care requires spending down all non-exempt assets and can result in an expensive Medi-Cal lien against the remaining assets. Certain types of irrevocable trusts should be considered in these situations and that is where the expertise of Aaron Feldman can help.