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Why is an Estate Plan Important for All San Diegans?

What is estate planning and why is an estate plan important for all San Diegans?  The answers in the end are quite simple: time and money.  Do you own your home?  Do you own a business or an interest in a local company?  If so, an estate plan will save you and your beneficiaries thousands of dollars, substantial hassle and more than a year of time.  It could be the difference between the successful transition of your business or the collapse of everything you’ve invested a lifetime to build.

Let’s begin with home ownership.  The average value of a home today in San Diego is more than $500,000.  If you only have a will (or worse, no will at all) your estate must pass through “probate” before it can be distributed to the people and causes you care so much about.  Valuable resources will be drained and it could be well over a year before your assets can be passed on to those who are important in your life.  The average cost of probate is more than 15% of the appraised value of your estate – not the equity in your home, but it’s list price.  The cost to simply open a case in probate court is presently $435.  If anyone wishes to challenge the distributions in your will (perhaps against your wishes) each will have to pay an additional $435.  On a $500,000 home this results in additional costs exceeding $26,500 including the fees for the court, advertising costs, the executor’s fee and attorneys fees.  As the value of your home goes up, so do the fees.

From the perspective of a business, a business succession plan allows you to plan in advance for the smooth transition of your company if you become incapacitated or pass unexpectedly.  The business succession plan ensures that the business will continue smooth operations during the transition and passes control to the heir(s) or manager(s) specified within the plan.  It may be necessary to bring in outside expertise to operate the company until an heir is prepared to take the reins or until the company is sold for maximum profit, based upon your directions.

The experienced estate planning and tax attorneys at Allen Barron are prepared to review existing estate plans, trusts and other documents to ensure they are up to date and reflect recent changes in California and federal law.  Why is an estate plan important for all San Diegans?  If you do not have an estate plan or family trust, you should more about the protections provided and financial benefits of a well constructed estate plan or trust.  We invite you to contact us for a free consultation at 866-631-3470.