Consumer Education Pamphlets
The State Bar of California has published the following pamphlets which you may find helpful when you begin planning your estate:
Frequently Asked Questions
- What is the Difference Between a Revocable Living Trust and a Will? A properly funded revocable living trust will help you avoid or eliminate the need for slow, costly, public court proceedings in the event of incapacity and following death. In contrast, a will generally guarantees probate. If you own real estate in multiple states, probate will be required in each state. In addition, because a will takes effect only at death, its maker must rely on a power of attorney or conservatorship proceeding to manage his or her assets during any periods of incapacity. Trusts cost more than wills to create, fund, and manage. However, the upfront expense and effort can result in substantial savings when it comes time to administer the estate.
- If I Have a Revocable Living Trust, Do I Need a Will? Yes, you need a “Pour-Over Will.” When you create a revocable living trust, you must fund it. Funding occurs when assets are transferred into the trust. Sometimes, either intentionally or inadvertently, assets are not transferred into the trust. In addition, you’ll likely acquire new assets, which you may choose to leave outside the trust for convenience reasons or forget to title in the trust’s name. Your “Pour-Over Will” directs that any assets held in your individual name, without a beneficiary designation, pass to your trust at your death. Depending on the quality and quantity of your non-trust assets, they may or may not be subject to probate. As a separate concern, if you have minor children, the will is the document where you’ll name their guardian.
- What is Included in My Estate for Purposes of Determining the Federal Estate Tax? Almost everything you own worldwide will be included in your estate for purposes of calculating the federal estate tax. This includes your home, business interests, bank accounts, investments, personal property, retirement plans, and death benefits from life insurance policies payable to or owned by your estate. Your assets are reduced by your debts at death, expenses of administering your estate, certain medical expenses, funeral expenses, marital and charitable deductions, and certain losses. The net value of your estate is subject to the estate tax to the extent it exceeds the exemption amount established by Congress at the time of your death.
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