Guide to Estate Planning – Part 1

keith-1As we approach the end of yet another year, many people look at their assets and seek information on ways to preserve what they have and how to provide for their loved ones when they’re gone. That process is called “Estate Planning”. Here at BPE Law, we’ve been providing Estate Planning services to our clients for over 20 years. But still, most people don’t know what it all means.

This week, we’re starting a series of Articles to teach you what you need to know about Estate Planning and why it is so important for you and your family.

As always, if you have any questions about your real estate, business, estate planning, or any other legal issue, please let us know by e-mailing me at

Also, remember that we do legal presentations for business and community organizations. If your group would like this, please contact me or Steve to set up a date and time.

What is Estate Planning?
Every one of us has an “Estate” of some kind… a home, maybe some investments, money in the bank, insurance, a business, etc. Estate Planning is simply the process of creating certain documents that will enable you to preserve your Estate and pass it on to your heirs and beneficiaries as intact as possible. Why is this important? Because if you don’t plan ahead, your Estate may get chopped up by the ravages of Probate costs, attorneys fees, Estate Taxes, and other avoidable time delays in distributing your property to your heirs. Simply put, it is devising an effective method that will allow as much of your estate as possible to be preserved and passed on to your heirs and beneficiaries, without all of the costs and headaches. And the two biggest dangers are Probate and Estate Taxes.


What is Probate and Why Do You Want to Avoid It?
Probate is simply the legal process by which a Court decides who is going to control and receive your assets when you die.. or even if you are incapacitated. If you have no Estate Plan at all or even if you have a Will, Probate will be required. The biggest problem with Probate is that it’s expensive, How expensive? Well, it’s virtually impossible to do Probate today without an attorney and those Probate Attorney fees are set by law. They are 4% of the first $100,000; 3% of the next $100,000; 2% of the next $800,000; then a sliding scale after that. Most importantly, the Probate attorney fees are tied to the gross value of your Estate, not the net. So, if all you have is a home worth $400,000, the attorney fees alone would be $11,000 plus court costs and expenses of another $2,500. In contrast, an average estate plan will cost you just $1,500.

Beyond the expense, Probate is very time-consuming and it’s open to the public. The minimum time to Probate and Estate is six months… and often more than a year… time spend creating and signing various Court-required documents and appearing at Court hearings, waiting through the many other cases on the Court’s docket each day. And all of this is open to public viewing by everyone else in the Courtroom and, in many Counties, such as Sacramento, your estate information is available online. Forget about privacy.

Bottom-line, Probate is something you want to avoid.

Why Should You Worry About Estate Taxes?
Currently, there is no California Estate Tax. While the federal Estate Tax is under discussion in the current Tax Reform plans working their way through Congress, the Federal Tax remains a key concern. Estate Taxes are charged based on the size of your Estate after your exemptions. Each of us has a personal exemption from Estate Taxes… at this point in 2017, that exemption is $5.5 million each. While for most of us, this means we’ll have no tax, the concern is that this could change. Back in 2001, that exemption was only $600,000. Federal law then gradually increased the exemptions through 2009 when the exemption reached $3.5 million.

While the current law may provide estate tax-exemption for most people, it certainly does not protect all. I’ve had clients that own businesses or have worked hard all their lives building their investments. Often they have large insurance policies as well which also count as assets for tax purposes. Since Estate Taxes can be up to 55%, there is a significant amount of your estate that can be lost to taxes. And between spouses, it’s easy to waste a tax exemption by failing to do effective Estate Planning… a very costly mistake.

So How are Probate and Estate Taxes Avoided by Estate Planning?

Properly drafted Estate Plan documents such as using a Living Trust instead of a Will can enable you to avoid the Probate process entirely and keep the administration of your Estate low cost, fast, and private… and can maximize your Estate Tax exemptions.

What are these Estate Plan documents?
Building an effective estate plan is like putting together a puzzle. There are several pieces to the estate plan puzzle. For most people, these are:

1. Revocable Living Trust
2. Pour-Over Will
3. Power of Attorney for Estate Management
4. Advanced Health Care Directive

What your puzzle should look like when completed will depend on the size of your estate and your specific desires. Just as a puzzle that is missing a piece is not complete, if you leave out pieces of your estate plan, your wishes may not be achieved.

Over each of the next 4 weeks, I’ll introduce you in detail to each of the pieces of the Estate Plan documents so that you will know what they do and why they will be so important in your Estate Planning.

Of course, if you are ready to get started now, call our office at 916-966-2260 and schedule an estate planning consultation.

The attorneys of BPE Law Group, PC. have been advising our clients on real estate and business issues for over 20 years and have been very involved with Property Tax Reassessment challenges. If you have questions concerning any legal matter, give us a call at (916) 966-2260 or e-mail Keith at Our flat fee consults for new clients may get you the answers you need for the questions you have.

The information presented in this Article is not to be taken as legal advice. Every person’s situation is different. If you are facing a legal issue of any kind, get competent legal advice in your State immediately so that you can determine your best options.