Frequently Asked Questions
To help our clients quickly get answers to some of the most commonly asked questions, we’ve prepared this FAQ section. We’ve broken questions down into categories, so you can get basic information on topics like estate planning, probate, and trust administration at any time.
Estate Planning
Estate planning is the legal process for managing and transferring your assets after your death or incapacitation. Estate planning can also arrange for the care of minors or other dependents, as well as help your family prepare for how to handle taxes and other financial obligations. Working with an estate planning attorney isn’t just for the wealthy – anyone can benefit from having an estate plan.
Estate planning attorneys help you create a comprehensive plan that covers all the most vital aspects of estate planning. An estate planning attorney will work closely with you to understand your family’s specific needs, and then guide you through the creation of the appropriate estate documents such as wills, trusts, powers of attorney, and advance healthcare directives. An estate planning attorney can also work in conjunction with your CPA or tax advisor to provide advice and guidance on tax implications, asset protection, and even charitable giving, ensuring that your wishes are properly executed and your wealth preserved for your beneficiaries.
Contrary to popular belief, estates are not exclusively for the very wealthy. Virtually everyone has an estate. Your estate includes everything that you own, from your home to your automobiles. Your bank accounts, stocks, bonds, even cryptocurrencies are all part of your estate, as are non-tangible assets like retirement accounts and life insurance policies. Even personal items like jewelry, art, and antiques, collectables, or memorabilia are all part of your estate.
Estate planning is vital because it dictates what happens to your property and loved ones after your passing – but it can even dictate what happens to you when you are incapacitated. In the event you become incapacitated, whether due to accident or sudden illness, advanced medical directives laid out in your estate plan can dictate your treatment. By creating an estate plan now, you not only gain control over how your assets are distributed, which can minimize family disputes and legal complications, you also maintain control of important medical decisions that can otherwise burden your family.
When an individual passes without an estate plan, they are said to have died intestate. It is up to the state where you lived to determine how assets are distributed. In California, a probate court will be responsible for distributing your property according to the state’s intestate succession laws, which prioritize your closest living relatives. The probate process is complex and often lengthy, and can ultimately cost more than if you had established a will or trust. Establishing an estate plan is the best way to ensure that your assets are distributed according to your wishes.
The cost of estate planning is largely determined by the complexity of the estate and your specific needs. A simple will is often less expensive than setting up a complex trust, but the overall cost of estate planning will vary based on the specific documents you require.
Wills and Trusts
A will is one of the most commonly used estate planning documents. It is a legal document that leaves specific instructions on how your property and assets will be distributed after your death. A will names an executor of your choosing, who is tasked with managing your estate. It can also be used to appoint guardians for minor children, as well as outline your final wishes. A will takes effect only after your death, and must go through a court process called probate to be validated and executed.
A revocable living trust is a form of estate planning designed to transfer your assets during your lifetime into a special legal entity known as a trust. As the trustee, you can manage the assets during your lifetime, as well as be your own beneficiary. This allows you to manage and use your assets as you normally would, while the trust legally owns the assets. A revocable living trust allows you to change the terms during your lifetime, add or remove assets, and even dissolve the trust at any time. The biggest benefit of a living trust however is that the trust allows a successor trustee to step in and manage your finances according to your instructions after you pass, bypassing the need for a lengthy and public probate process.
Many assume that trusts are only for the extremely wealthy or those with significant assets. However a trust can benefit anyone who wants to avoid the costs and delays common to the probate process. A trust also protects a family’s privacy, as the terms of a trust are not publicly disclosed, unlike the probate process. A revocable living trust can also be beneficial for managing assets for beneficiaries who are very young, financially inexperienced, or have issues with creditors. A trust can protect your assets, ensuring your beneficiaries receive the most benefit.
Yes, even with a living trust established, having a will can provide an extra safety net that covers any property that was not transferred into the trust prior to your death. This is often referred to as a “pour-over will”. A pour-over will direct any remaining assets upon your death to be transferred into your trust, ensuring all your property and assets are distributed according to your directions outlined in the trust.
Both are commonly used estate planning documents, but each has distinct features and advantages. A will takes place only upon death, whereas a living trust is effective immediately upon creation. By creating a trust, ownership of your assets are transferred directly into the trust, which avoids the process of probate that a will is subject to. Another advantage of establishing a trust over a will is privacy. A will becomes a public document once filed, whereas a trust is completely private with no details available publicly. The probate process is also a public process, which a trust avoids entirely. Lastly, a will only manages the distribution of assets after death. A grantor, however, can manage the assets placed in the trust in their lifetime, making changes and even acting as their own beneficiary until their passing.
Planning for Incapacity
A durable power of attorney is a legal document that allows you to name a person to act as an agent to make financial and other decisions on your behalf. Once given, power of attorney remains in effect even if you become incapacitated. This legally allows the agent to pay bills, manage investments, and handle your personal financial matters without intervention from a court. Designating power of attorney to a trusted agent is a key part of estate planning, and can ensure that your affairs are managed according to your wishes even when you are no longer able to make decisions yourself.
Also known as an advance directive, a healthcare directive is a legal document that specifically outlines your preferences and wishes regarding medical treatment. A healthcare directive becomes active only when you are unable to make your own healthcare decisions, such as when you are in a coma or have significant health issues that prevent you from communicating your wishes normally.
A healthcare power of attorney, also known as a healthcare proxy or durable power of attorney for healthcare, is a legal document which allows you to appoint another person to make decisions regarding your health and social care when you are unable to. A healthcare power of attorney enables your representative to make decisions regarding your treatment, surgical procedures, and even end-of-life care.
Estate and Inheritance Taxes
The federal estate tax is a tax placed on high value estates on their right to transfer property to beneficiaries. The federal estate tax only applies to estates above a specific threshold in value. The value is adjusted annually based on inflation. For the year 2025, the federal estate tax applies only to estates valued at over $13.99 million, per person. Thus, most estates are not large enough to be subject to the federal estate tax.
In estate and inheritance tax laws, portability is a provision of federal law that permits the surviving spouse to use any unused portion of their deceased spouse’s federal estate tax exemption. This makes it possible for a married couple to essentially double their federal estate tax exemption, allowing them to pass on a larger estate to their beneficiaries.
Some states have their own estate and inheritance taxes, which are calculated separately from federal estate taxes. An estate tax is based on the value of the decedent’s estate, while an inheritance tax is based on the value of the property inherited by a beneficiary. As of 2025, the state of California does not have a state-level estate tax or inheritance tax. However, it is important to note that if a California resident holds property in another state, and that state does have an estate or inheritance tax, that portion of the estate may be subject to that state’s tax laws.
The Planning Process
While many assume that estate planning is only for the very wealthy, or those in the later stages of life, the reality is that it’s never too early to begin estate planning. If you are an adult with assets, such as your own home, or if you have a partner or children, then making a plan for your future now can be highly beneficial to your family.
Your first meeting with an estate planning attorney is about getting to know your personal circumstances. Be sure to bring a list of your assets, both physical and financial, including real estate, bank accounts, and investment accounts. You may also want to come prepared with thoughts on who you might want to name as your executor or trustee, who you may wish to assign guardianship of your children, and even specific wishes for your healthcare and end-of-life decisions.
Your estate plan should be reviewed regularly, on average every 3 to 5 years. This can help you make sure that all your more recent assets are accounted for. It is also important to update your estate plan whenever there is a significant life event, such as a marriage or divorce. Even the birth of a child or grandchild, or the death of a family member who was named as a beneficiary requires an update to your estate plan.
If you still have questions after perusing our FAQ, contact the Law Office of Vidhya Babu to schedule a no-obligation, initial consultation.
The contents and materials of this website should be used as a general guideline and not as the ultimate source of current information. The user should consult their own legal, accounting, or other advisors.