Take this simple test to see if it is.
| Question |
Don't
know |
No |
Yes |
1) Have you prepared a will or a trust?
Without proactive planning, you are relying on the California legislature to determine how your assets pass, to whom they pass, and when they pass. In addition to having potentially undesired results, this is perhaps the most costly and time-consuming means of passing your assets to your loved ones.
|
|
|
|
2) If you have done a will or trust, has it been reviewed in the last two years?
There have probably been some family or financial changes since your plan was last reviewed, but there are also changes in the tax laws since 2005. An out-of-date estate plan is perhaps worse than no estate plan at all. Our experience is that people view estate planning as an event rather than a process. Keeping your plan current is vital to achieving the goals you set out to accomplish.
|
|
|
|
3) Are all of your heirs over the age of 18 and financially responsible?
Under California law, children can inherit property at the age of 18 without restriction. Proper planning is crucial to prevent an heir from squandering his or her inheritance, or worse, from causing harm to himself or herself.
|
|
|
|
4) Are you absolutely certain that your assets will not be subject to probate?
We encourage you to make a list of each asset you own and identify how each asset is going to avoid probate. Assets owned in the name of a trust, and assets that pass by beneficiary designation (such as IRAs, life insurance, etc.), and assets owned as joint tenants will avoid probate. Everything else is subject to probate. (Also, note that assets owned jointly are typically subject to probate upon the death of the last joint tenant.) Probates can be costly and typically require 12 to 18 months from the date of death to conclude.
|
|
|
|
5) Do you have assets titled jointly with a child or someone else?
Holding assets jointly with someone other than a spouse is quite common, but has some potentially devastating consequences of which most people are unaware. A creditor of a joint tenant can take the entire asset to satisfy the creditor’s claim. A creditor would include a divorcing spouse, judgment creditor or business creditor. Additionally, problems can be created if joint tenants die in the wrong order.
|
|
|
|
6) Does your current plan provide your heirs with asset protection, divorce protection, and lawsuit protection?
The most common means of providing for heirs is with outright distributions. By doing so, however, the inheritance becomes subject to the creditors of your heirs.
|
|
|
|
7) Is this your first marriage?
Second or subsequent marriages present unique planning issues, particularly if both spouses have children form a prior marriage. Proper planning is critical to prevent undesired results.
|
|
|
|
|