Estate law Dana Point
Important Estate planning Tips for Dana Point Residents
No matter the size of your net worth, it’s important to have a basic estate plan in place. Such a plan ensures that your family and financial goals are met before and after you die.
An estate plan has several elements. They include: A will, assignment of power of attorney, and a living will or health-care proxy (medical power of attorney). For some people, a trust may also make sense. When putting together a plan, you must be mindful of both federal and state laws governing estates.
Taking inventory of your assets is a good place to start. Your assets include your investments, retirement savings, insurance policies, and real estate or business interests. Ask yourself three questions:
(1) Whom do you want to inherit your assets?
(2) Whom do you want handling your financial affairs if you’re ever incapacitated?
(3) Whom do you want making medical decisions for you if you become unable to make them for yourself?
Everybody needs a will. A will tells the world exactly where you want your assets distributed when you die. It’s also the best place to name guardians for your children. Dying without a will – also known as dying “in testate” – can be costly to your heirs and leaves you no say over who gets your assets. Even if you have a trust, you still need a will to take care of any holdings outside of that trust when you die.
Estate planning lawyer Dana Point, California
Trusts aren’t just for the wealthy. Trusts are legal mechanisms that let you put conditions on how and when your assets will be distributed upon your death. They also allow you to reduce your estate and gift taxes and to distribute assets to your heirs without the cost, delay and publicity of probate court, which administers wills. Some also offer greater protection of your assets from creditors and lawsuits.
Discussing your estate plans with your heirs may prevent disputes or confusion. Inheritance can be a loaded issue. By being clear about your intentions, you help dispel potential conflicts after you’re gone.
The federal estate tax exemption — the amount you may leave to heirs free of federal tax — is $15 million per person. For a deeper look at how the federal exemption, step-up in basis, and California’s lack of a state estate tax affect your plan, see our guide to Estate Tax in California.
You may leave an unlimited amount of money to your spouse tax-free, but this isn’t always the best tactic. By leaving all your assets to your spouse, you don’t use your estate tax exemption and instead increase your surviving spouse’s taxable estate. That means your children are likely to pay more in estate taxes if your spouse leaves them the money when he or she dies. Plus, it defers the tough decisions about the distribution of your assets until your spouse’s death.
There are a few easy ways to give gifts tax-free and reduce your Dana Point, CA estate. You may give up to $19,000 a year to an individual (or $38,000 if you’re married and giving the gift with your spouse). You may also pay an unlimited amount of medical and education bills for someone if you pay the expenses directly to the institutions where they were incurred.
There are ways to give charitable gifts that keep on giving. If you donate to a charitable gift fund or community foundation, your investment grows tax-free and you can select the charities to which contributions are given both before and after you die.
Serving Dana Point from our San Clemente office
Dana Point is approximately 3 miles (about 8 minutes) from our San Clemente office. Dana Point is a short drive up Pacific Coast Highway from our office. Estates in Monarch Beach, Lantern Village, and the harbor area often involve a mix of primary residences, second homes, and rental properties.
A complete California estate plan generally includes a revocable living trust, pour-over will, durable power of attorney, and advance healthcare directive — sized to your family, your real estate, and your wishes.
Helpful estate planning guides for Dana Point residents
Schedule a free consultation with our team — in person at our San Clemente office, by phone, or by video.