Top Estate Planning Attorney
Estate planning attorneys are helpful during the estate planning process and afterwards through the process of probate court. They understand the state and federal laws that will impact your estate.
Estate planning attorneys, also referred to as estate law attorneys or probate attorneys, are experienced and licensed law professionals with a thorough understanding of the state and federal laws that affect how your estate will be inventoried, valued, dispersed, and taxed after your death. In addition to educating you about the probate process, an estate planning attorney can assist you with the following tasks:
• Creating a will
• Designating your beneficiaries
• Establishing durable power of attorney and medical durable power of attorney
• Finding ways to reduce and avoid estate tax when possible
• Finding ways to avoid the probate court process
• Setting up any trusts you might need to protect your assets, both for your own benefit during your lifetime in the event of incapacity, and for the benefit of your beneficiaries after your death
Estate planning attorneys often charge a flat fee to help you craft binding legal documents such as wills and durable power of attorney, but they can also be employed on an hourly basis to help you maintain your estate, act on your behalf to handle disputes when called upon, and ensure that your will is carried out according to plan when required.
An estate planning attorney can also be called upon to guide anyone with power of attorney over a recently deceased person’s estate through the process of probate court. In fact, a good estate planning attorney may be able to help you avoid probate court altogether, but that largely depends on the type of assets in the deceased’s estate and how they are legally allowed to be transferred.
In the event that a beneficiary (or even an individual not designated as a beneficiary) announces that he or she plans to contest the will and sue the estate of a deceased family member or loved one that you also stand to benefit from, it might be in your best interest to consult an estate planning attorney immediately. Such lawsuits can quickly drain the estate’s funds and leave all beneficiaries a little worse for the wear.
What Is Estate Planning?
Estate planning is the preparation of tasks that serve to manage an individual’s asset base in the event of their incapacitation or death. The planning includes the bequest of assets to heirs and the settlement of estate taxes. Most estate plans are set up with the help of an attorney experienced in estate law.
Benefits of Estate Planning
• Estate planning involves determining how an individual’s assets will be preserved, managed, and distributed after death or in the event they become incapacitated.
• Planning tasks include making a will, setting up trusts and/or making charitable donations to limit estate taxes, naming an executor and beneficiaries, and setting up funeral arrangements.
• A will is a legal document that provides instructions on how an individual’s property and custody of minor children, if any, should be handled after death.
• Various strategies can be used to limit taxes on an estate, from creating trusts to making charitable donations.
Understanding Estate Planning
Estate planning involves determining how an individual’s assets will be preserved, managed, and distributed after death. It also takes into account the management of an individual’s properties and financial obligations in the event that they become incapacitated.
Assets that could make up an individual’s estate include houses, cars, stocks, artwork, life insurance, pensions, and debt. Individuals have various reasons for planning an estate, such as preserving family wealth, providing for a surviving spouse and children, funding children’s or grandchildren’s education, or leaving their legacy behind to a charitable cause.
The most basic step in estate planning involves writing a will. Other major estate planning tasks include the following:
• Limiting estate taxes by setting up trust accounts in the names of beneficiaries
• Establishing a guardian for living dependents
• Naming an executor of the estate to oversee the terms of the will
• Creating or updating beneficiaries on plans such as life insurance, IRAs, and 401(k)s
• Setting up funeral arrangements
• Establishing annual gifting to qualified charitable and non-profit organizations to reduce the taxable estate
• Setting up a durable power of attorney (POA) to direct other assets and investments
Writing a Will
A will is a legal document created to provide instructions on how an individual’s property and custody of minor children, if any, should be handled after death. The individual expresses their wishes through the document and names a trustee or executor that they trust to fulfill their stated intentions. The will also indicates whether a trust should be created after death. Depending on the estate owner’s intentions, a trust can go into effect during their lifetime (living trust) or after their death (testamentary trust).
The authenticity of a will is determined through a legal process known as probate. Probate is the first step taken in administering the estate of a deceased person and distributing assets to the beneficiaries. When an individual dies, the custodian of the will must take the will to the probate court or to the executor named in the will within 30 days of the death of the testator.
The probate process is a court-supervised procedure in which the authenticity of the will left behind is proved to be valid and accepted as the true last testament of the deceased. The court officially appoints the executor named in the will, which, in turn, gives the executor the legal power to act on behalf of the deceased.
Appointing the Right Executor
The legal personal representative or executor approved by the court is responsible for locating and overseeing all the assets of the deceased. The executor has to estimate the value of the estate by using either the date of death value or the alternative valuation date, as provided in the Internal Revenue Code (IRC).1
A list of assets that need to be assessed during probate includes retirement accounts, bank accounts, stocks and bonds, real estate property, jewelry, and any other items of value. Most assets that are subject to probate administration come under the supervision of the probate court in the place where the decedent lived at death.
The exception is real estate, which must be probated in the county in which it is located.
The executor also has to pay off any taxes and debt owed by the deceased from the estate. Creditors usually have a limited amount of time from the date they were notified of the testator’s death to make claims against the estate for money owed to them. Claims that are rejected by the executor can be taken to court where a probate judge will have the final say as to whether or not the claim is valid.
The executor is also responsible for filing the final personal income tax returns on behalf of the deceased. After the inventory of the estate has been taken, the value of assets calculated, and taxes and debt paid off, the executor will then seek authorization from the court to distribute whatever is left of the estate to the beneficiaries.
Planning for Estate Taxes
Federal and state taxes applied to an estate can considerably reduce its value before assets are distributed to beneficiaries. Death can result in large liabilities for the family, necessitating generational transfer strategies that can reduce, eliminate, or postpone tax payments.
During the estate-planning process, there are significant steps that individuals and married couples can take to reduce the impact of these taxes.
Married couples, for example, can set up an AB trust that divides into two after the death of the first spouse.
Education Funding Strategies
A grandfather may encourage his grandchildren to seek college or advanced degrees and thus transfer assets to an entity, such as a 529 plan, for the purpose of current or future education funding.2 That may be a much more tax-efficient move than having those assets transferred after death to fund college when the beneficiaries are of college age. The latter may trigger multiple tax events that can severely limit the amount of funding available to the kids.
Cutting the Tax Effects of Charitable Contributions
Another strategy an estate planner can take to minimize the estate’s tax liability after death is by giving to charitable organizations while alive. The gifts reduce the financial size of the estate since they are excluded from the taxable estate, thus lowering the estate tax bill.3
As a result, the individual has a lower effective cost of giving, which provides additional incentive to make those gifts. And of course, an individual may wish to make charitable contributions to a variety of causes. Estate planners can work with the donor in order to reduce taxable income as a result of those contributions, or formulate strategies that maximize the effect of those donations.3
This is another strategy that can be used to limit death taxes. It involves an individual locking in the current value, and thus tax liability, of their property, while attributing the value of future growth of that capital property to another person. Any increase that occurs in the value of the assets in the future is transferred to the benefit of another person, such as a spouse, child, or grandchild.
This method involves freezing the value of an asset at its value on the date of transfer. Accordingly, the amount of potential capital gain at death is also frozen, allowing the estate planner to estimate their potential tax liability upon death and better plan for the payment of income taxes.
Using Life Insurance in Estate Planning
Life insurance serves as a source to pay death taxes and expenses, fund business buy-sell agreements, and fund retirement plans. If sufficient insurance proceeds are available and the policies are properly structured, any income tax on the deemed dispositions of assets following the death of an individual can be paid without resorting to the sale of assets. Proceeds from life insurance that are received by the beneficiaries upon the death of the insured are generally income tax-free.4
Estate planning is an ongoing process and should be started as soon as an individual has any measurable asset base. As life progresses and goals shift, the estate plan should shift in line with new goals. Lack of adequate estate planning can cause undue financial burdens to loved ones (estate taxes can run as high as 40%), so at the very least a will should be set up—even if the taxable estate is not large.
Hiring an Estate Planning Attorney
s you grow older, it’s important to have a secure estate plan in place so you know your assets and family will be taken care of when you’re gone. This involves drawing up plenty of legal paperwork, which is when hiring an estate planning attorney can be especially beneficial. These lawyers specialize in many areas of estate planning, including federal and state laws regarding wills, taxes, trusts and power of attorney. In addition, you may especially need a lawyer if someone is likely to contest your will or your estate is otherwise complex. That said, if your estate is large, you’ll probably also want to hire a financial advisor who can help you manage all of your assets, investments and other finances.
How Much Does an Estate Planning Attorney Cost?
Law firms have a reputation for being expensive, and for good reason. The services of an estate planning attorney are heavily specialized, which means you can’t just replicate what they do without years of schooling and experience. Even if your total costs end up being pricey, you can at least rest easy knowing your family and estate are in good hands.
When you meet with an estate planning attorney, they’ll typically lay out their fees immediately. These can come in different variations and combinations, including initial meeting fees, hourly fees and fixed fees. In most cases, the more time your attorney spends on your estate, the more you’ll pay.
Fee rates will range from attorney to attorney and state to state. Firms will often charge you a starting fee to initially meet with the attorney for an hour or so. This time is for reviewing your estate planning needs and whether or not you’re a good fit for one another. If you can, ask for a quote ahead of time so you can easily compare rates between each attorney.
Depending on how early in life you see an estate planning attorney, there’ll likely be longer-term fees for maintenance. For example, let’s say you and your spouse decide to work with a lawyer at age 68. If your spouse passes away at 75, you’ll probably need to readjust your estate plan significantly. The same will also be true if you, say, gain another grandchild.
How to Find an Estate Planning Attorney
To find an estate planning attorney, you should ask friends and family for recommendations. Their personal experiences will be the best indicator of any attorney’s quality. You can also try getting a referral from your state bar association or from a county or local probate court. Your financial advisor can also recommend one, as they typically have attorneys to whom they regularly refer clients.
A lawyer who specializes in estate planning won’t necessarily have any unique certifications or titles to distinguish them. Rather, they’ll simply refer to themselves as estate planning lawyers or estate planning professionals. Their entire practice may be explicitly focused on this specialty. They may also discuss the areas within estate planning they have experience in.
Of course, you will need to work with an estate planning lawyer who has passed the bar in your state. State-specific expertise is particularly important when it comes to estate planning. That’s because laws and probate procedures differ by state and locale.
On a less technical note, you should look for an estate planning attorney who puts you at ease. After all, this person will be helping you make what can be difficult and emotional decisions. More often than not, you’ll need to disclose a great deal of personal information, including your final wishes. This entire process will be significantly easier if you feel comfortable talking to your attorney.
Estate Planning Attorney Certifications
While an estate planning attorney doesn’t need separate certifications to practice, some choose to attain further credentials. Some of these are available to professionals who aren’t lawyers, such as financial advisors or accountants. Knowing what kinds of designations an attorney has can give you a clue as to what they’re most knowledgeable about. This could be an incredibly important revelation when you’re looking for one to work with.
Here are a few examples of certifications you might see:
• Accredited Estate Planner (AEP): The National Association of Estate Planners and Councils awards the accredited estate planner designation to licensed attorneys, CPAs, chartered life underwriters and certain other financial advisors. Requirements include a minimum of five years of estate planning experience, the completion of two graduate level courses through the American College of Financial Services and the completion of a minimum of 30 hours of continuing education every 24 months, of which at least half must be in estate planning.
• Chartered Trust and Estate Planner (CTEP): The American Academy of Financial Management grants this designation. It requires a degree in finance, tax, accounting, financial services or law. Other requirements include the completion of at least five related courses, the completion of a certification training course and annual continuing education.
• Certified Trust and Financial Advisor (CTFA): The American Bankers Association, along with the Institute of Certified Bankers, awards the certified trust and financial advisor (CTFA) designation to individuals who meet certain criteria. This includes a minimum of three years of experience in wealth management, the completion of at least one approved wealth management training program, a letter of recommendation, a signed ethics statement and the completion of 45 hours of continuing education every three years.
Planning your estate is a complex endeavor with countless decisions from start to finish. An estate planning attorney can help you determine a plan that makes the most sense for your unique situation. With the help of a qualified professional, you can go into the estate planning process with confidence. This will leave you knowing that your plan is airtight, which will only bring you ease.
Who is the best Irvine Estate Planning Attorney?
Irvine Probate Law has been awarded the Top Irvine Estate Planning Attorney for several years now and counting. Lets see if we can get you the best estate plan possible.