Many people might think that estate planning is all about assembling the different paperwork and documentation you need. They download forms and templates, fill up the documents and sign them, and think that they are set with a satisfactory, Do-It-Yourself estate plan.
But this perspective misses the point entirely. Estate planning is not simply about just having documents such as a will and other authorizations.
Estate planning is strategic planning regarding your estate.
Eventually, the estate plan will be encapsulated in the finalized version of forms and documents, but the first part of it is best handled with the professional assistance of an estate planning lawyer.
A really good estate planning lawyer doesn’t just help you assemble the various documents you need. They help you plan and strategize the best way to deal with your estate, and then they prepare and review documents for your execution, ensuring that each and every part of your estate plan is compliant with law, fiscally sound and doable, and is a clear reflection of your intentions.
A good estate planning lawyer customizes an estate plan specifically for your personal circumstances, with a view to preserving as much of your estate as possible for the benefit of yourself and your family, while at the same time reducing the possibilities of conflict.
The Myth of the “Standard Will”
Effective estate planning is more than just filling up and signing a standard will.
A “standard” will is, in fact, a bit of a misnomer.
It may be standard in the sense that there is a form template that can be used by anyone, perhaps.
But the reality is that no two people have the same estate, or the same type of family dynamic.
Estate plans have various nuances that are intended to reflect these differences in terms of estate types, estate values, and even family values. A person’s health, desired intentions with respect to their family and assets, the different liabilities they may leave behind – all of these various factors create a unique situation that requires a specific type of estate plan.
A standard will, very often, won’t quite cut it.
This is where the estate planning lawyer comes in.
They take a look at all these variables unique to your situation, and do their best to ensure that your intentions are achieved as much as possible with a customized estate plan that works within the California legal system.
You just can’t get that type of personalized estate plan from standard wills.
And the difference will be glaringly obvious when the time comes and you need someone to take over when you get sick. If you pass away, it can spell the difference between your family getting the most of what you leave behind, or an estate eaten up by liabilities or legal fees in order to resolve conflicting claims.
Below we take a look at some of the things that an estate planning lawyer does in order to design customized estate plans for clients.
Asset Analysis and Client Education
Estate planning begins with the estate planning lawyer conducting a review of a person’s assets.
This includes a review of how each asset is owned, who is on the title, and whether or not there are specific terms on asset titles that impact an estate plan.
For instance, properties may be owned jointly with another. Accounts may contain beneficiary designations. Various types of assets may be held in a trust rather than under a client’s name.
This informs the estate planning lawyer what assets are subject to probate and what assets may transfer out of probate.
From a detailed review, specific recommendations may already be made, including: updating beneficiary designations, funding revocable trusts, and addressing potential tax issues.
The estate planning lawyer then sits down and helps educate the client about any various issues that need to be addressed immediately, and provides the reasons behind any recommendation.
It is not a blind “do-as-I-say” type of scenario. An estate planning lawyer worth his or her salt will help their clients understand the reasons for their recommendations in order to assist the client in formulating a more coherent and personalized plan, while at the same time addressing flaws and inconsistencies that might lead to unintended consequences such as unintentional disinheritance of heirs and successors.
A Look at California’s Property Rules
If the client has specific objectives – such as leaving certain properties to specific family members, ensuring the care of minor children or other dependents, or how certain assets or properties are to be treated after the person’s death – the estate planning lawyer can help provide an analysis of the feasibility of these objectives under California law.
After all, nothing exists in a vacuum, and estate plans in California work and operate under California law.
There are guides, requirements, prohibitions, procedures and legal presumptions that must be taken into account.
This educational role becomes particularly important in California, where property ownership laws can significantly impact inheritance rights and tax outcomes.
Of particular importance are properties impacted by California’s community property rules.
A complex family dynamic, coupled with California’s community property regime, can significantly impact estate planning strategies.
A person with children from a first marriage, for instance, and who bought and owns property with the first spouse, who also has children from a current marriage, and owns property with the current spouse, will have a uniquely challenging perspective.
The ability to provide for all the children, while at the same time respecting property and ownership under community property laws, will need careful planning and precise drafting by an experienced estate planning lawyer.
These certainly will not be addressed through one-size-fits-all templates and forms.
Understanding Non-Prorata Distributions and the “Aggregate Theory”
Sometimes, the distribution of assets to the heirs and successors will not necessarily be equal.
One child may inherit the family business, another may inherit the family residence, and yet another may inherit a car and various valuable items.
Under the aggregate theory, varying or unequal distribution to beneficiaries may result in varying tax liabilities as well as unequal economic consequences.
What may seem like an reasonably equal distribution on paper may not necessarily mean equal economic benefits and consequences to the heirs.
An experienced estate planning attorney can help with a clear analysis of any unequal distributions of undivided assets, and any concerns faced by each individual heir such as hidden liabilities, valuation disputes, or liquidity concerns.
A thoughtful distribution of an estate must include a clear look at all the implications of any unintended inequality, whether in asset value or in inherited liabilities.
Tax exposure, in particular, is highly significant. Some property transfers might trigger tax liabilities unequally borne by one successor, and this can lead to what could have been avoidable disputes and contests.
Avoidance of Probate and Incapacity Planning
Of course, the estate planning lawyer will also be able to assist in planning for and preparing the required documents to support a person’s incapacity planning.
And since most people desire to avoid probate as much as possible, the estate planning lawyer will be able to design a customized plan that accomplishes this.
Avoidance of probate is often accomplished by the creation of a living trust.
Needless to say, a functional and operational trust requires careful planning, the execution of compliant and clear trust instruments, and completed with the appropriate funding.
Conclusion
So what does an estate planning lawyer do?
Certainly more than just document drafting.
A good estate planning lawyer will help you in asset planning to ensure that your goals and objectives are attained, minimize your risks and liabilities as much as legally possible, and ensure that your legacy passes on to your heirs, successors, and beneficiaries.