When Is The Best Time to Write My Estate Plan?

Hi, This is Marc Herbert from Herbert Law office with the Question of the Week. Many times I get asked, when should I write my estate plan or what’s the best time to write an estate plan? So there’s three basic rules of thumb, in my opinion. If you have a house in California, you should probably have an estate plan.

If you have children, especially children under the age of 25 years old, in my opinion, you should have an estate plan. Or if you’re single, you definitely need to have an estate plan in place. Now, if you have two out of those three, you really, really need to have an estate plan. And if you have all three, if you’re a single person with a house and kids in California, you really, really need an estate plan now.

Now is the best time to create that. Because if you even have one of those factors, you know, your assets and your family are exposed at the moment to the risk of going to probate court. And I’ve talked in other videos about what’s involved there. But basically probate court is where a judge who never met you sort of imposes California’s estate plan onto you.

California does have a default plan for you. It’s called probate court. And even though most of the judges in probate court are very nice people, they are going to enforce the laws of the state. And that’s sometimes leads to results that we don’t want as parents or homeowners. Also, there’s a lot of costs involved in probate court. Usually about 7% of what goes into probate court ends up going everywhere except to your heirs.

So if you have an estate of $300,000, I’d say 20,000 of that is not going to the people that you want it to go to. Another major problem with probate court is the time involved. Most probate court cases go 18 months, sometimes two years, sometimes even three years. And obviously the delays involved are very stressful for the family.

Not only that, once your family gets out of probate court, then they have to deal with federal taxes, maybe state taxes, including the new proposition 19 law that just passed last year. So they have no protection from the court or state and federal taxes. So if you already have an estate plan, it does need to be looked at every 3 to 5 years.

So now is a good time to review and probably update an estate plan. If you have one. Now, federal law changed in 2019. State law changed in 2020, and you may have had significant changes in your family and your assets in your goals since you created your estate plan years ago. There might be a new child born. Somebody had a divorce maybe, or you bought a house or, you know, you’re looking at retirement now and your goals have somewhat changed.

So if you don’t have an estate plan now, you should really look at doing that while we know what the laws are and we can get you the maximum protections available. But if you already have an estate plan, it’s usually a good idea to take another look at it. Don’t just stick it up on a shelf where it collects dust, but pick it up.

Work through it to make sure that that the documents are still going to protect you the way that you want it to. And I read something the other day that said $70 billion of assets are supposed to be transferred in the United States over the next ten years. You know, we’ve had recent presidential elections. There’s congressional elections, state elections all the time.

So it’s really important that you get good, solid legal advice and financial advice. We partner with Kelly Financial Group. They help us a lot in walking our clients through their options so that they are fully covered both in what could end up in probate court and what their other assets that should never go to probate court. At her law office, we offer a free consultation to talk about your current situation, to discuss your options with you, and then you decide how you want to build your estate plan or update your existing plan.

If you’re interested in scheduling that appointment, just give us a call at 6612739007. Thanks a lot. We’ll talk to you soon.