Estate Planning

Reviewing your estate plan will alert you to any changes that need to be addressed. For example, you may need to make changes to your plan to ensure it meets all of your goals, or when an executor, trustee, or guardian can no longer serve in that capacity. You’ll probably want to do a quick review each year, because changes in the economy and in the tax code often occur on a yearly basis. Every five years, do a more thorough review.

California has not had any kind of a statewide estate, gift, or generation-skipping transfer tax since prior to 2005, however, with the proposal of a new bill introduced by California State Senator Scott Wiener, that could all change.

An estate plan consists of numerous documents that compliment your living trust. If you are not familiar with your estate planning binder, it can be difficult and frustrating to figure out what each document is and what purpose it serves. Here is a quick description of the most common documents contained in your estate plan. If you are missing any of this paperwork, it is important to have your estate plan reviewed and updated.

A good estate plan typically includes a Health Directive where you appoint a trusted friend or family member to not only make medical decisions for you, but to also take care of how your remains are handled at your death.

Many people assume that if you have been a couple for a long time in California, that you eventually become legally married under common law. California does NOT recognize common law marriage regardless of how long you have been together, and/or if you declare to others that you are married. Under California law, unless a couple is legally married or has a legal domestic partnership, the surviving life partner may not be provided for by the estate. Learn how to avoid this!

Federal estate taxes have been significantly decreased, effective as of Jan. 1, 2018. For single individuals, if you die in 2018, there is no estate tax imposed unless you own more than approximately $11.2 million. For married couples, the estate tax exemption is now over $22.4 million per couple. This exempt amount will continue to increase until Jan. 1, 2026, when the law automatically sunsets and the exemption returns to approximately $5 million per person. Learn more about the New Tax Fix AB Split.

You finally committed to making an estate plan, and now you are in possession of a big binder or envelope full of your original documents. Now, the question is where to put it, or if you created your documents many years ago, do you know where they are? Here are some tips to keep these documents organized, handy, and safe.

Putting it all together: The conclusion of our 3 part series.