Why do Estate Planning?

Forbes magazine recently published an article on the importance of setting up an estate plan (Heidi Brow, Your Go-To Guide to Estate Planning, Forbes, September 2, 2009 -
http://www.forbes.com/2009/09/02/estate-financial-planning-forbes-woman-net-worth-guide.html) and emphasized that an estate plan is "not just for the wealthy". I don’t think that this point can be emphasized enough. The article points out that most people incorrectly believe that an estate plan is only for the rich and those with a large or complex estate. However, a properly drafted estate plan is an important part of everyone’s long term planning needs, no matter how large your bank account is, and while an estate plan is an effective financial planning tool, its benefits extend beyond mere financial matters.

A comprehensive estate plan will include an Advanced Health Care Directive or Living Will, which allows you to clearly communicate to your doctors and family members your wishes and desires about your medical treatment thus avoiding possible conflicts or confusion between family members. A Revocable Living Trust in conjunction with a Last Will and Testament will allow you to clearly spell out how you would like your property distributed, who you would like to manage the distribution and who you would like to be appointed as guardians of your minor children, if necessary. A Durable Power of Attorney will give the person or persons you appoint the power to manage your finances during your incapacity. An estate plan should include all of these documents to be most effective.

Regardless of the size of your estate, a comprehensive estate plan will give you and your family peace of mind knowing that whether they are managing your affairs while you are incapacitated or carrying out your wishes after your death, that they are acting in accordance with your specific direction, which will ultimately provide protection for both your estate and your loved ones.

If you are considering an estate plan, e-mail me directly at sanderson@coronalaw.com for more information about setting up your estate plan or give our office a call at (951) 734-6371 if you have any questions.

Tax Rate on Estate Plan

It pays to die in 2010. Due to legislation passed during the Bush Administration, the tax rate on estates will go from a 45% tax rate in 2009 to zero in the year 2010, and then up to 55% for the year 2011. Therefore, for people with large estates - or people who may inherit a large estate - it would be advantageous to die in 2010 thus avoiding the payment of any estate tax.

However, if you would like to avoid such a drastic tax avoidance method, such as death, a properly drafted estate plan can help maximize your estate tax exemption (currently 3.5 million in 2009) and may reduce or alleviate any estate taxes that your heirs may have to pay upon your death.

If you are considering estate plan, email Sharon Anderson at sanderson@coronalaw.com for more information about setting up your estate plan or call our office directly at (951) 734-6371.

Welcome

I will attempt to update this blog as often as possible with information about Estate Planning and Probate. My law office is located in Southern California and we have offices in Orange County, Riverside, Temecula, Rancho Cucamonga and Corona.

You can visit our Estate Planning & Probate website for more information or as always you can call our office for a free consultation.