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Modern Estate Planning Blog

Elder Law & Special Needs Planning

New Estate Planning Law in California is Good News for Those with Smaller Estates

January 9, 2012

Generally speaking, it makes sense for just about everyone to spend some time with a Sacramento estate planning lawyer to look over their assets and plan for the future. Even those who don’t have large estates, for example, really need to consider who they want in charge of them should they become incapacitated. HIPAA Authorizations, powers of attorney, and advance directives for medical care are all incredibly important in ensuring that your wishes are met in a variety of situations.

When it comes to estate planning, however, many people with smaller estates don’t see the sense in hiring an attorney and drawing up paperwork. Things like “trusts” are often thought to only be needed by the very wealthy and are therefore just overlooked by many in the lower and middle classes. Surprisingly, it takes very little to trigger the probate process, which can take a substantial chunk of money out of an already fairly small inheritance.

The state of California is working to make this situation a bit more reasonable for those with smaller estates. The 2011 California State Assembly Bill 1305 has been successful in raising the limits on the value of assets that can be passed on without going through the probate process. At this point, estates worth up to $150,000 (gross estate value without reduction for liabilities such as your mortgage) will not automatically be placed into probate by the courts. This is an increased from the previous limit of $100,000.

Perhaps of even greater interest is the increase in the gross value of real estate that can be passed on without necessarily going through probate. The earlier limit of $20,000 has been raised to $50,000. This tends to protect those passing on property in the form of partial interests, timeshares, vacant land, etc. These types of property are eligible to be claimed by successors without having to go through the time and expense of a formal probate process. Instead, they will be eligible for summary procedures, theoretically saving considerable cost and frustration. This does not mean that the necessity of probate court is eliminated, just that a shorter procedure is available.

Of course, none of this negates the benefits of working with a good Sacramento County estate planning attorney. Claims cannot be made on the property for 40 days after your death, for example, which may not be as desirable as passing the property or assets through a will or trust. And, as mentioned above, while this new law is certainly helpful, it does not pertain at all to your need for powers of attorney (medical and financial), setting up educational opportunities and guardianships for minor children, sheltering assets from excessive taxes, or any of the other important concerns that are addressed by a skilled Sacramento County estate planning lawyer.

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