2. If you don’t write a will, California will write one for you! If you like the idea of the state of California making all your important decisions, then don’t write a will. One of my clients’ wife died without a will. California decided that the house should go ½ to her husband and ½ to her 9-year-old son. The court supervises children’s inheritances until age 18. The judge said a house was too risky an investment for a child, so the father had to refinance to buy him out for hundreds of thousands of dollars. My client had just lost his wife, and now all of his money was going to pay a mortgage so that on his son’s 18th birthday, the son will get ALL of his inheritance as a lump sum – not a great parenting tactic from anyone’s perspective. In 15 years, I’ve never met a client who liked California’s plan for them.
3. If you don’t have a living trust, Probate is Expensive! For those who own a home in California or have more than $150,000, Probate awaits if they fail to create and fund a living trust. An average home in Alameda is worth $800,000, that means our average probate would cost at least $40,000. It takes about a year if everything goes well, and ties everything up in the courthouse with lawyers and appraisers to pay for. What’s worse than that? If you are still alive, but unable to handle your finances, and you don’t have a Durable Power of Attorney for Finances in place, then the same probate court will supervise your assets and/or debts for the rest of your life – regardless of how much or little remains.
4. Probate is Public. Anyone and everyone can obtain a copy of your file in probate which includes your list of assets including account numbers and the value of each asset (cars, home, jewelry). Your death certificate is also public record and contains your social security number, legal name, address and birth date. If you didn’t feel like a target for identity theft while you were alive, try probate! Guess who gets to clean up identity theft after you’re gone – your loved ones.
5. Protect your Children. Most of my clients are motivated most by the idea that their children will need more than just some money when they die. Young children usually need parental guidance as well as access to assets before 18 to help pay for education and support expenses. The guardians cannot be expected to take on the financial burden of more children. Write your estate plan to address the children’s needs – and use a trust instead of relying on the probate court judge to make decisions for them.