October 30, 2024
Estate planning means more than just having a will—especially if you want to keep the courts out of your family's life. Allworth financial advisor Allison Scoggin, CFP®, walks you through the must-know specifics.
One of the most important areas I focus on with my clients is estate planning—not just planning for life right now, but for your future when you may need extra help from family and caregivers. Estate planning is about ensuring that your assets and loved ones are protected when you’re no longer able to manage things yourself.
There’s a common misconception I often hear from clients: “I have a will, so I’m all set, right?” Unfortunately, the answer is often no. Many people believe that having a will alone will protect their assets and prevent their family from going through probate, but this is not always the case—especially here in California.
A will and a trust are not the same thing. While a will allows you to specify who should inherit your assets, it doesn’t necessarily protect those assets from probate. A trust, on the other hand, is a legal arrangement that holds your assets for your beneficiaries and can help bypass probate entirely.
If the word probate is new to you, let me explain: probate is the legal process where the courts decide who gets your assets after you pass away. This can include your home, bank accounts, or even a business. If there’s no clear plan in place, the courts take over, which can be a lengthy, stressful, and often costly process for your loved ones.
Probate happens when you haven’t made proper arrangements—such as naming beneficiaries on your accounts or creating a trust. This means that even if you have a will, your estate may still go through probate if it isn’t protected by a trust or other estate planning measures.
In California, the threshold for probate is relatively low. If you own assets worth more than $184,500 and haven’t named a beneficiary or set up a trust, those assets could go through probate.1 This is significant because most homes in California easily exceed this threshold, and even something like a bank account without a named beneficiary could be at risk if its value surpasses $184,500.
This is why it’s so critical to take stock of your assets and understand where the risks are. Identifying and addressing any probate holes in your estate plan can help you avoid unnecessary complications for your family later on.
Here’s the good news: probate is avoidable with proper estate planning and document preparation. This means taking the time to work with a professional—whether it’s an attorney, a paralegal, or even using online tools—to create the right documents that will protect your assets.
At a minimum, you’ll want to prepare:There are many resources available to help you draft these documents. Personally, I’ve used an online platform, Wealth.com, to create my estate planning documents. It’s a simple process where you can log in, create your trust, will, and power of attorney, and update them whenever your life changes.
If you’ve been putting off your estate planning or aren’t sure if you have everything in place, now is the time to act. The process is easier than ever, and taking these steps today will give you peace of mind that your family and assets are protected, no matter what life brings.
Remember, estate planning isn’t just about preparing for the end—it's about protecting yourself and your loved ones while you’re still here. Whether you choose to work with a professional or use an online platform, the key is to make sure your estate plan is comprehensive and up to date.
Key Takeaway: Probate is avoidable with the right documents in place. Don’t wait—start planning now to ensure your future and the future of your loved ones is secure.
If you have any questions or would like to discuss your estate planning options, feel free to reach out. I’m here to help guide you through the process.
No matter what changes may happen in life, I believe it’s possible to refocus any situation in a way that helps to create positive change. That is why I love being a financial advisor and helping my clients listen to their inner voice and change their outcomes for the better.
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