“Why Do I Need an Estate Planning Attorney?” To Avoid a Do-it-Yourself Disaster!

Our firm frequently comes into contact with prospective clients who want to know why they should pay attorneys’ fees for an Estate Plan when they can produce “the same product,” for a fraction of the cost, by filling out a form online. Unfortunately, the pitfalls of being a DIY Estate Plan owner are common, as evidenced by a story in this month’s ABA Journal. In the article, Ann Aldrich used an “E-Z Form” to create a will which left all of her property to her sister, and then to her brother if her sister had already passed away. It seems simple enough, doesn’t it? The client had simple wishes—why should she pay an attorney to memorialize something that only amounts to two lines of text? The answer is that even if the wishes are simple, drafting a document to ensure those wishes are followed can be complex. Ms. Aldrich didn’t know that a will should include a residuary clause, which directs how assets not specifically named in the will should be handled. Because the E-Z Form that Ms. Aldrich used did not contain this clause, a considerable amount of property was subject to disposition by the provisions of the law: not Ms. Aldrich’s wishes. When property isn’t mentioned in a will, it is disposed of according to the legal rules of intestacy applicable to that state, treating it as if Ms. Aldrich didn’t have a will at all when it comes to that property. The end result of this oversight was that the daughters of one of Ms. Aldrich’s brothers (who was long dead by the time of her...

Estate Planning For Your Children – It’s Not Just About The Money

Most people near the age of majority do not have large estates (money or property) and many families assume that this means an estate plan is completely unnecessary. This is simply not true. A comprehensive estate plan does much more than protecting property from probate and directing the disposition of assets—estate plans also tell medical and financial institutions who is authorized to make decisions on your behalf. Without current, effective documents, these institutions may refuse to release medical information and will likely not allow family members to make healthcare decisions.

What is probate?

Probate is the legal procedure used to transfer title to assets upon death. The superior Court supervises the payment of debts, taxes and probate fees. The court the supervises the distributions of the estate to the heirs. Unfortunately however, the process is both expensive, time consuming and easily avoidable. A simple probate, without any complications, will take approximately nine months to one year to be completed. However, many probates take longer, sometimes as much as three years or more (particularly if budget and department cutbacks have strained the court’s resources). The most common misconception about probate is that if you have a will, you do not have to go through the probate process. This is actually the exact opposite. A will, by definition, must go through Probate. In addition to any taxes that may have to be paid, there are also fees involved. Some of these fees vary, but there are court mandated attorney and executor fees. It is extremely important to note, that the fees described in the chart below are based on the GROSS value of the estate. For instance, let’s assume that the major asset that you own is a home. Your home is worth $550,000 and you only owe $30,000 against it, leaving $200,000 worth of equity to for your heirs to inherit. According to the California Probate code, because your home has a market value of $550,000 you would have to pay, in addition to any other fees and taxes that you might owe, court mandated attorney and executor fees in the amount of $26,000. This is slightly over 10% of the net value...