Money they say brings out the worst in people especially when it involves a valuable estate left behind by a loved one. The time, money and emotions invested in contesting a will for example is often times worth more than the will itself. In the end there's hardly anything left of the estate to be distributed, relationships are destroyed and in really bad cases, lives are lost.
As certain as death is, no one is quite prepared for it. Sadly, the most unprepared are those we leave behind. Aside the pain and grief losing a loved one brings; dealing with legal matters, insurance companies and contentious family members are things some people never recover from. You can make this process much easier for your loved ones with these simple steps to estate planning in Los Angeles or California:
1. Pay all your bills including debts and taxes: The beneficiaries of whatever you leave behind will not get a penny until all your bills have been paid. The state court also known as the probate court has a responsibility to notify the public including creditors of a death and will pay all debts of the deceased first before distributing what's left of their estate to beneficiaries. If you are deep in debt, chances are there will be little left of your estate for your loved ones to benefit from.
2. Write a will: As obvious as this is, people still omit the writing of a will before they exit. It might seem uncomfortable planning for your death especially when no one wants to die, but if you don't, the court will on your behalf.
Probate, the legal system through which your estate is administered in the event of your death, goes into effect whether or not you have a will. The difference is with a will, it guides how your estate is distributed and to whom. In essence, you determine how your estate is administered even in death which is pretty much what writing a will is all about.
On the other hand, without a will, the judge appoints a personal representative to your estate and decides who gets what. The judge will likely make decisions based on facts but we all know a will is largely emotional so while someone might be an heir on paper, they might not be who you want to inherit any of your property.
3. Establish a living trust: A living trust completely avoids the probate process, has no attorneys (saves cost), court control, contest clauses, unnecessary taxes, is private, controlled entirely by the family and can be resolved in weeks.
The average time for the probate process is between nine months to two years and can go as long as ten years in cases of badly contested wills. The probate process is also in the public domain so anyone who has the time can go to the courthouse to find out the value of your estate and how it was distributed. If you value privacy, this is definitely the way to go.
4. Joint ownership of estate: The rule of thumb is if more than one name is on the title, it is considered joint property and bypasses the probate process. The property is automatically transferred to the other owner. So whether a home or joint accounts, this rule applies.
Spouses should however not assume that properties will be automatically transferred to them; you should check that your name is also on the title. Also, state laws differ so you should consult an attorney for legal advice.
5. Pay-on-death accounts: You can avoid probate by filling a form on your retirement or regular bank account stating the beneficiary who inherits the account; that simple. The money is automatically transferred to the beneficiary upon your death. In some states, you can also do transfer-on-death security registration, vehicle registration and even real estate deeds.
Planning for life after your death is much more than a simple will. Probate generally applies to assets you own alone because jointly owned property is automatically transferred to the other owner on the title. Be sure to sit with probate or estate planning lawyers to analyse your situation and decide the best option for you. By taking these first steps, you'll be saving yourself from some common estate planning errors and other further complications.