d
Follow us
Image Alt

Estate Planning

Preserve your assets

Portland and Orange County Estate Planning Attorney

Importance of Estate Planning

“By failing to plan, you are preparing to fail” – Benjamin Franklin

Contrary to popular opinion, estate planning is distinct from wealth planning. Every individual has an estate plan by default, even if they take no action. Failing to proactively plan your estate can result in the implementation of the state’s default plan, particularly in the event of incapacity or death.

Without a personalized estate strategy, your family may become involved in public court proceedings known as probate, where your estate is administered under the supervision of a state court. Probate is a lengthy, expensive, and public process that most people wish to avoid. Unfortunately, without proper planning, this may become the legacy you leave for your loved ones to manage. The probate process varies in duration and complexity from state to state, lasting anywhere from a few months to several years.

While joint tenancies or payable on death transfers may be considered as alternatives to avoid probate, they may not fully align with your intended wishes. For instance, joint tenancies with children lack the tax benefits associated with transfers at death, potentially resulting in increased tax liabilities for your children. Additionally, joint tenancies and payable on death accounts may fall short of expectations in various ways.

Misconceptions

  1. A Will is sufficient.
    Unfortunately, having a will does not circumvent probate. While a will allows you to specify estate distributions, it still needs to go through the probate process. Additionally, a will does not offer assistance in cases of incapacity.
  2. A Will controls all my assets.
    Only the assets you own will be distributed according to the wishes expressed in your Will. Assets held jointly with another person or with beneficiaries listed on an account will be transferred directly to the joint owner or beneficiary and not according to your Will.
  3. My finances will be private in probate proceedings.
    Unfortunately, this statement is not entirely accurate. Probate is typically an open process, with some exceptions, and your finances can be subject to examination by anyone who wishes.
  4. Living trusts are only for large estates.
    The primary purpose for a living trust is to avoid probate and protect your family at death so your estate is privately administered and distributed according to your wishes.
  5. Living trusts cannot be changed.
    Living trusts can be amended or terminated at any time, as long as you have the capacity to do so. It’s important to note that a living trust is not an asset protection mechanism; it doesn’t require a separation between you and the trust.
  6. I will not have control over my assets in a living trust.
    A living trust is considered a non-entity for legal and tax purposes, with you being regarded as both the owner and beneficiary of the trust assets. Holding property in a living trust does not alter your ownership or control over the assets.
  7. Living trusts need to file annual tax returns.
    Living trusts are considered non-entities for tax purposes, meaning that the tax identification number of your living trust is generally the trustor’s Social Security Number. Therefore, holding property in a living trust typically does not affect your taxes.
  8. A living trust will help protect my assets.
    Unfortunately, a living trust is to avoid probate and does not provide creditor protection. For creditor and asset protection, you’ll need to consider other planning options such as irrevocable trust and/or business formation.
  9. The cost of trust and estate documents are only paid once.
    You will have an initial cost of creating an estate plan; however, it is recommended that you review and update your trust as your life circumstances change over the years and especially with changes to the federal or state estate and gift tax laws. However, these costs are minimal and are spent during your life to benefit your estate.
  10. Adding my child as a joint owner of my home is easier and cheaper than estate planning.
    Unfortunately, your family may end up paying more when you add a child as a joint tenant. Depending on your basis or purchase price of your home, Your child is likely to incur significant capital gains tax on their portion of the appreciation in the value of the home. This situation can be avoided with a living trust estate plan.

Services

Comprehensive Estate Plans 
  • Trust:  A trust is a legal agreement among the parties on how your property is to be administered, managed, and ultimately distributed. Trusts allow assets to be transferred to your beneficiaries without going through probate. 
  • Will:  A Will is a legal document that instructs your executor on how to handle your property and governs the division of your assets at your death. The Will is a necessary component of a complete estate plan in cases where assets were inadvertently left out of your trust. In order to have a single comprehensive distribution of assets, the Will directs any assets in your estate to be distributed to your trust and administered under the terms of your trust.
  • Power of Attorney:  A Power of Attorney is a written document authorizing someone to handle your day-to-day financial affairs while your are living.  A Power of Attorney terminates at death as a matter of law.  This document is especially important in the event of incapacity to avoid conservatorship hearings. 
  • Advanced Healthcare Directive:  An advanced healthcare directive is a special document used to appoint an agent to make health care decisions for you when you are unable to do so.  
  • Nomination of Guardianship:  For parents with minor children, the nomination of guardianship for their children in the event of death, is in many cases one of the most important estate planning documents.  A nomination gives the deceased parents the ability to inform the Court of their wishes as to who would be the best fit to raise their children. 
 Trust Funding 
  • Transferring your home and other real properties to the trust:  Your real properties should be titled or transferred to your living trust to avoid probate.  Since a living trust is a non-entity, transferring a mortgaged primary residence does not affect the underlying mortgage. 
  • Transferring other property to your trust:  Only property titled in the trust or passing to the trust at death avoids probate. Business interests must also be assigned or transferred to your trust for clear title. Failure to take these steps may result in probate proceedings to transfer your estate to your trust after your death. 
 Trust and Estate Administration 
  • Trust administration during life:  During your life, your trust may need to be updated or property transferred to your trust as your estate changes over time.  This may include updating your agents or transferring a newly acquired property to the trust. 
  • Administration after death:  After your death, your estate or trust must be administered.  If your property is held in your trust, your successor trustee will take possession of your trust estate and distribute your property according to your written instructions in the trust.  Property not held in a trust must still be administered through probate according to your Will or intestate succession rules. 
 Real Estate Transfers 
  • Trust funding:  Real estate transfers to your trust must be recorded by deed. 
  • Business transfers:  For liability protection, rental properties held in a business entity must be properly titled in the business name to benefit from the limited liability protection offered by law. The ownership interests in the business entity can be assigned to your trust to avoid probate.
 Asset Protection 
  • Business formation:  One benefit of operating a business as a corporation or limited liability company is the protection from personal liability for business conduct.  It also offers gifting strategies for estate planning purposes. 
  • Irrevocable trust planning:  Another asset protection strategy is to hold property in an irrevocable trust. Irrevocable trusts are special planning tools designed for very specific purposes, such as minimizing estate taxes or asset protection.  Irrevocable trusts are separate legal entity with separate tax identification.  Once you have notice of liability or cause of action, you are prevented from asset protection planning under fraudulent transfer rules.  Thus, the best time to plan for asset protection is before any liability or creditor surfaces. 
 Business Succession Planning 
  • Another aspect of estate planning that is often overlooked is business succession planning.  If the parent-owner of the business dies, the transfer and management of the business should be in place for a smooth transition. 
 Estate Planning with Irrevocable Trusts 
  • Irrevocable Life Insurance Trusts 
  • Special Needs Trust 
  • Generation Skipping Tax Trust 
  • Irrevocable Trusts 
  • Charitable Trusts 
  • Qualified Primary Residence Trusts 
  • Spousal Lifetime Access Trusts 
  • Separate Property Trust 
  • Medicare Trust 
  • Gun Trusts 

Estate and Trust Attorneys in Portland, Newport Beach, and All of Orange County

Contact us today to speak to an estate and trust attorney for your needs in Newport Beach, Irvine, Santa Ana, Portland, OR, or anywhere in Orange County, CA. We can guide you through this process.

Our estate planning lawyers serve all of Orange County, CA, and Portland, OR, including Newport Beach, Irvine, Santa Ana, Anaheim, Huntington Beach, Garden Grove, Orange, Fullerton, Costa Mesa, Mission Viejo, San Clemente, Laguna, and other areas.