The essential objectives of estate planning are:
1. To eliminate or minimize probate fees. “Probate fees” are attorney’s and executor’s fees allowed by law in a court-supervised “administration” of one’s estate. One means of eliminating, or at least reducing probate fees, is by your creating a revocable living trust.
2. To eliminate or minimize federal estate tax (“FET”). If you are married and have a substantial combined net worth, be sure to take advantage of “portability” – the addition of the first spouse to die’s unused lifetime exclusion amount (from federal estate taxes) to the surviving spouse’s lifetime exclusion amount. To obtain this portability present law requires the filing of a federal estate tax return following the death of the first spouse to die.
In this connection, to reduce the size of your estate, and without requiring your filing of any gift tax return, and, therefore enabling your estate to pay less FET, consider making annual $17,000 gifts (new amount for 2023) of cash or property value to each donee you wish.
Also, the purchase of life insurance on your life may help to pay any FET owing on your death.
3. To eliminate or minimize potential Medi-Cal costs. To reduce the potential of Medi-Cal costs, consider purchasing long-term health care insurance.
4. To minimize the risk from a damage award against you (for example, from auto accident liability in excess of your coverage). One thing you can do here is purchase an umbrella liability insurance policy through the insurance company providing your auto or home insurance policies.
5. Most importantly, to be certain that your estate will pass to those beneficiaries you desire to have it by so designating them in a trust and/or will or other appropriate dispository document(s).
The above statements are not to be taken as legal advice for the reader’s particular situation.
Richard F. McEntyre practices law in the area of estate planning and administration, having served the San Diego community as a lawyer for over 40 years. Chris von der Lieth is a lawyer who has worked with Dick for over 9 years. Affordable rates. Highest quality services. House calls available. Our office is conveniently located at 2615 Camino Del Rio South, Suite 101 (in Mission Valley just east of Bully’s restaurant) (Telephone (619) 221-0279); www.richardfmcentyre.com.
