Newport Beach Estate Planning Attorney

If you need assistance drafting your will or trusts, navigating the probate process, or even planning for long-term care, our experienced Newport Beach estate planning lawyers provide customized and knowledgeable estate planning services. At The Flanigan Law Group, we want to ensure your assets are protected if you become incapacitated or after your death.

What Is Estate Planning?

Estate planning involves organizing and overseeing the allocation of your assets and debts both during your life and after you pass away. The process includes making arrangements for the transfer of your estate, reducing estate taxes, and ensuring the financial well-being of your loved ones. When you have a well-structured estate plan, you can determine how your assets are divided, appoint guardians for minor children, and designate who will make decisions for you in the event you become incapacitated.

The Seven Steps in the Estate Planning Process

Estate planning can be emotionally and mentally difficult, but if you are to pass away without preparing, your family members could be put in a difficult situation. The seven steps of estate planning will help you better understand the process and prepare you for what to expect.

Step 1: Hire an Estate Planning Attorney

Estate planning is detail-heavy, time-consuming, and complex. A professional real estate planning attorney can help you through the following steps to develop a comprehensive plan to make sure your estate is legally sound and compliant with California state laws.

Working with an estate planning attorney will help you determine what your goals are, such as ensuring financial security for your family, minimizing tax impact, supporting charitable causes, specifying your healthcare wishes, and more.

Step 2: Inventory Your Assets and Debts

This step may feel overwhelming, but it is important to create a comprehensive list of your assets and debts, including:

• Investments
• Bank accounts
• Real estate
• Personal property such as furniture, art, and cars
• Insurance policy cash value
• Retirement plans such as 401ks or IRA
• Mortgage(s)
• Personal loans
• Credit card balance
• Student loans

Once this is complete, you will calculate your net worth. This is done by subtracting your debts from your assets. Your lawyer will be able to determine if your estate will be subject to state or federal taxes.

Step 3: Think About Your Family Dynamics and Future

What is your family situation currently like? If you have dependents, such as children, you will have to decide on a guardian to care for them. You will also have to consider planning if you have a family member with a disability or special needs. If your beneficiaries are all independent, it may be simpler to choose to distribute your assets as fairly as possible among them.

Step 4: Create a Will and Establish Trusts

Choosing a will or a living trust has advantages and disadvantages. They each serve different purposes, and many individuals choose to incorporate both to maximize their benefits.

A will is a foundational document when it comes to estate planning, as it specifies how you want your assets distributed. A will is advantageous due to its simplicity and cost. While it is easier to amend, this can open the door for familial disputes down the line because it is easier to contest. A will also allows you to name guardians for your minor children.

While a will includes court supervision when it is administered, the probate process can be time-consuming and costly. It also exposes your estate to the public record.

California law allows for various trust types, such as revocable living trusts, irrevocable trusts, and special needs trusts. People choose a living trust to bypass probate for their family, allowing for a quicker, private distribution of assets to their beneficiaries. It also comes with reduced legal fees and court costs since probate is avoided.

A living trust can be disadvantageous due to its potential complexity, both in setting it up and maintaining it. It will require ongoing management and updates to ensure your assets are properly titled in the trust’s name. It also does not allow you to name guardians for your minor children.

Step 5: Choose Beneficiaries

Creating an estate plan allows you to choose your own beneficiaries. If you pass away without a valid will, considered intestate, your assets will be distributed according to state law. Your beneficiaries can include your spouse, children, grandchildren, close friends, business partners, and even charities you want to support. After deciding on who, you will decide on how the money will be allocated, such as a spouse getting half and children splitting the rest.

Step 6: Prepare for Potential Incapacity and Create a Power of Attorney

In addition to a will or living trusts, estate planning includes an advance healthcare directive, also called a Healthcare Power of Attorney. This appoints a person of your choice to make decisions about your medical care if you become incapacitated and cannot on your own. Creating a healthcare directive can help you avoid the court placing a guardianship or conservatorship that does not align with your preferences.

You could also consider appointing a general power of attorney, which grants a person of your choice the power to act on your behalf for financial and legal matters. If you cannot, this person can manage bank accounts, handle financial transactions, pay bills, sign contracts, and more.

Step 7: Organize Your Documents and Talk to Your Family

After your estate planning is completed, make sure your information is stored in an accessible place for your beneficiaries. Be sure to include:

• Will and Trusts
• Power of Attorney documents
• Log-in and password information for bank accounts, credit cards, loan accounts, and more
• Information about any mortgages
• 401k, IRAs, and other pension plans and retirement benefit information
• Deeds or titles to real estate property
• Information about your investment portfolio
• Funeral plans and any prepaid services
• Where valuables are kept, such as safe deposit boxes
• Information about your estate planning attorney

Remember to talk with trusted family and other beneficiaries about your estate plan. Share with them all the details, including the appointed executor, trustee, and agents under powers of attorney, how you want your assets distributed, your healthcare wishes, whether you are making charitable contributions, and more.

Be transparent, listen to their opinions, and address any potential misconceptions or conflicts. In the future, keep your family informed about any changes to your estate plan. All of this will provide your loved ones with as smooth as possible estate administration and peace of mind when you pass away.

Other Customized Estate Planning Services

Estate planning services are wide-reaching. Other services our team offers include:

• Retirement Planning Our attorneys and tax professionals can help you strategize how to avoid future tax penalties on your savings. Our up-to-date knowledge of tax law can ensure you benefit from all available deductions, credits, and exemptions.
• ConservatorshipsAt Flanigan Law Group, we can assist in planning conservatorships to provide care for elderly people, minors, and loved ones with special needs. We will work closely with families to develop personalized plans that will address each person’s unique needs while safeguarding their well-being and financial interests.
• Probate AdministrationOur attorneys can help you through the probate process if you have been named an executor of an estate, whether you were appointed by the individual or the courts. Probate is the court process for distributing a decedent’s assets, settling debts, and resolving any financial issues after their death. In California, the probate process can be difficult and lengthy, and an experienced lawyer is often required to ensure the smoothest process possible.
• Trust and Estate LitigationOur experienced litigators will advocate for beneficiaries, trustees, and other representatives in the many types of trust and estate litigation cases, including will contests, breaches of trustee duties, and creditor claims. We can handle complex situations, assist in resolving conflicts, and work towards efficient and favorable outcomes.

Why Estate Planning Is Important

Even if your estate is not particularly large, everyone should create an estate plan. It allows you to allocate your assets as you wish, clarifies the administration of your estate, reduces tax implications, and minimizes the risk of family conflicts.

The Negative Impact on Your Family if You Do Not Plan Your Estate

If you pass away intestate, or without a will, your family could be left with emotional, financial, and legal challenges on top of their grief. Some of the negative impacts include:

• Family disputes and conflicts over assets. Without a clear plan, family members may argue, and these disagreements can lead to long-lasting familial rifts.
• Lengthy probate process. Without a will or trust, your estate will be subject to the probate process. This is often time-consuming and complicated.
• Increased costs. The probate process and administrative costs can reduce the value of your estate, meaning less for your family.
• Higher taxes. Without proper planning, your estate may be subject to higher estate taxes that could have been avoided with proper strategies.
• Your assets may go to unintended beneficiaries. In the absence of a will, the law will dictate how your assets are distributed, which may not follow your wishes. On the other hand, individuals you had wanted to benefit, like stepchildren or close friends, may receive nothing.
• The court will appoint guardians for your minor children. If you don’t designate a guardian in a will, the court will make that choice for you, and it may not be your preferred choice.
• Your dependents may face financial hardships. If your loved ones do not gain access to your assets quickly, it could put them in a bad place financially, especially if you were helping to pay for education or other care.
• No healthcare directive could lead to medical decisions you may not like. Your family may have to make difficult decisions regarding medical care if you become incapacitated, and you may not agree with their choices. This could also create tension in the family if there are disagreements.
• Emotional burden on your family. The legal and financial uncertainties can add to the already different time your family is experiencing. The grieving process while managing an unresolved estate can be emotionally taxing.

What Taxes Would Apply to My Estate?

Taxes are one of the many things people must settle during an estate administration, and preparing through the planning process can reduce their impact on your estate’s worth. While California does not have an estate tax, larger estates may be subject to federal taxes. The federal estate tax exemption increases every year and is found on the IRS website.

People with larger estates should plan for these taxes, and there are some strategies for minimizing the liability, such as lifetime gifting, charitable donations, trusts, and business succession planning.

Making gifts during your lifetime through the annual gift tax exclusion allows you to give up to $17,000 per year without a gift tax. You could also make charitable donations to reduce the size of your taxable estate, either during your lifetime or through your will.

Putting trusts in place during your estate planning can reduce tax liability as well, such as:

• Irrevocable Life Insurance Trust (ILIT) removes life insurance proceeds from your taxable estate.
• Grantor Retained Annuity Trust (GRAT) allows you to transfer assets to beneficiaries at a reduced gift tax cost.
• Charitable Remainder Trust (CRT) provides income to you or your beneficiaries for a period, with the remainder going to charity, which then offers tax benefits.
• Qualified Personal Resident Trusts (QPRTs) transfer your home to beneficiaries at a reduced gift tax cost while retaining the right to live there for a specified time.

There are a few exemptions and deductions that may apply to your estate, such as marital dedication, family business deductions, and more.

Every person’s estate planning process and strategies will be uniquely tailored to their situation, so working with an experienced estate planning attorney can help you understand potential strategies to maximize the wealth transfer to your beneficiaries.

Ensure Your Future is Protected, Reach Out Today

With decades of estate planning experience in Newport Beach, The Flanigan Law Group can customize your plan to your specific needs, family structure, and unique circumstances to ensure your future is comprehensively protected. Reach out to our law office for a consultation with one of our estate planning attorneys.