Avoiding unnecessary taxation has long been one of the primary goals of drafting an estate plan for California residents. As we noted in a recent post, the federal gift and estate tax exemption will increase to $5.45 million on January 1, continuing an upward trend that began about a decade ago. As a result of the relatively high gift and estate tax exclusion, estate taxes are not a major concern for a large number of people.
The primary reason to prepare an estate plan is to ensure that your assets are passed on to those you want to receive them. If you die without a will or trust in California, your estate will be distributed according to the state's intestacy laws. Our law firm understands that this could result in an unwanted situation because this could mean your assets end up going to distant and possibly unknown relatives, rather than the people you would have chosen.
Many individuals in Northern California have been meaning to get around to estate planning for some time. Some people may make it their New Year's resolution to prepare an estate plan in 2016. Preparing an estate plan is extremely important for those who wish to avoid probate and have their assets distributed according to their wishes. For those who plan to prepare an estate plan in 2016, there are a few things of which to be aware.
Unfortunately, when a resident of Northern California dies, it is sometimes unclear whether they left a will, or which of several purported wills is valid. The result can be a court battle similar to one now taking place in New York over the estate of a man who died at the age of 97 and left an estate estimated at $29 million.
The term "estate planning" refers generally to the process of making preparations for the management of one's assets in the event of incapacity, and the distribution of assets to heirs and beneficiaries upon death. There are several important goals that should be considered by any California resident entering into the estate planning process.