Secure Your Finances Through Proper Estate Planning in California

  • Post last modified:November 10, 2023

Estate planning allows you to put your personal and financial affairs in order, providing peace of mind that loved ones will be provided for after you’re gone. Thoughtfully prepared plans also enable the optimization of tax savings and efficient transfer of assets to your chosen beneficiaries and heirs. It is important to follow estate planning steps to ensure you are going through them properly so everyone is protected.

Carefully Draft a Customized Last Will and Testament

A legally valid will is vital to ensure your assets pass to your desired beneficiaries and heirs rather than defaulting to state intestacy laws. Your will also designate an executor who will oversee settling your estate through the probate process after your passing. California recognizes holographic wills entirely handwritten by you as valid. However, it is highly recommended to retain an experienced estate planning attorney to help thoughtfully craft a more comprehensive will tailored to your unique assets, intentions, and family circumstances.

Establish Living Trusts to Avoid Probate

Living trusts allow your estate to bypass the California probate process, which can be cumbersome, time-consuming, and public. Assets titled in the name of your trust will pass privately to beneficiaries according to your wishes per the trust directives, without court involvement. Living trusts also provide you control over the distribution of your estate, naming contingent beneficiaries in case any primary beneficiaries pass away before you.

Carefully Designate Beneficiaries on Accounts

Be certain to name appropriate primary and contingent beneficiaries on any life insurance policies and retirement accounts such as 401(k)s or IRAs. These assets will pass by beneficiary designation, not through probate, so updating designations is crucial, especially following major life events like marriage, divorce, or a death in the family.

Explore Tax-Minimization Strategies

Work with an experienced estate planning attorney to maximize inheritance for your heirs and optimize tax savings for your estate. This may involve utilizing applicable gift, estate, and generation-skipping tax exemptions, establishing AB trusts, and employing tools like exemption portability between spouses. When estate values begin to approach taxable thresholds, proactive planning becomes essential.

Evaluate Joint Tenancy Property Titling

While titling property in joint tenancy with the right of survivorship does allow it to pass outside of probate, this titling option can have unfavorable tax and Medicaid eligibility implications in some cases. Weigh these consequences closely when considering the use of joint titling.

Update Your Estate Plan Periodically

Be sure to revisit your California estate planning documents regularly, especially following major life events like marriage, divorce, births of children, relocation to a new state, retirement, or significant increases in income or assets. Outdated plans that have not kept pace with changes in family dynamics or wealth can often mess with original intentions.

Protect Your Loved Ones Through Informed Estate Planning

While estate planning may seem like an unnecessary complexity when you’re still young and healthy, everyone benefits from having thoughtfully crafted plans in place. Being proactive allows you to protect your legacy and provide for your loved ones in the manner you intend. Contact a licensed estate planning attorney in Pasadena, CA today for a free consultation to discuss your family’s situation and goals.