The Estate Planning Process

Estate planning is the process of putting an individual's personal and financial affairs in order. The goals are to maximize the individual's enjoyment of his or her estate during his or her lifetime and the beneficiaries' enjoyment of the estate after the individual's death. Estate planning involves:

• Managing the individual's real and personal property during his or her lifetime and providing for the disposition of the property before and after his or her death;

• Structuring business, investment, and employee compensation arrangements to better achieve these goals;

• Executing testamentary and related instruments incident to entering into a marriage or domestic partnership and the dissolution or termination of such a relationship;

• Protecting and managing the individual's estate in the event of his or her incapacity or bankruptcy;

• Planning for personal and health care decision-making in the event of the individual's incapacity; and

• Minimizing the impact of many different types of taxes.

Estate administration is the process of carrying out the individual's estate plan and administering his or her estate following his or her death. It is the process of winding up the decedent's affairs and distributing his or her assets in accordance with his or her estate plan.

Consequences of Failure to Plan; Intestacy as Default Estate Plan

Every California domiciliary has an estate plan by design or default. Without a written estate plan, the disposition of a decedent's assets is subject to the provisions of applicable law. For example, property held in joint tenancy passes by operation of law to the surviving joint tenant, and property subject to contractual arrangements (e.g., death benefits under life insurance policies, annuity contracts, or retirement plans) passes by beneficiary designation or the provisions of the specific policy or plan. Property held in trust passes in accordance with the trust instrument. The disposition of the decedent's remaining assets is governed by the laws of intestate succession if he or she has no valid will.

Under the intestacy laws, the decedent's property will be distributed to the decedent's heirs, i.e., the decedent's spouse or domestic partner, the decedent's issue (i.e., lineal descendants of all generations), or other specified relatives in shares generally determined by their degree of relationship to the decedent. The administration and disposition of these assets is generally supervised by the probate court in an estate administration proceeding, one function of which is to ensure that the proper parties have adequate notice of the estate administration.

The default estate plan may work well for some people, but most people can benefit by executing wills, trust instruments, and powers of attorney, and by changing title to property and beneficiary designations in a way that facilitates a more orderly and comprehensive scheme for managing and ultimately disposing of their assets.

Please contact our law office for professional assistance or advice with your Estate Planning needs today.