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Estate planning is the process of protecting your assets during your life, directing the disposition of assets upon your death, and providing continued protection of the assets for your heirs after you die. In addition, health care matters are addressed with formal documentation indicating your health care choices.

During your life, tools such as a revocable trust and durable powers of attorney guard against mismanagement upon your incapacity. You may select a successor trustee to manage trust assets and an agent under a durable power of attorney to manage assets that are not typically placed in a trust, such as a life insurance policy or an IRA. In a Health Care Power of Attorney you select an agent to make health decisions if you are unable and to provide life support guidelines.  

Your revocable trust, or a Will, if you do not have a trust, directs the disposition of assets upon your death and if you are married may contain provisions that reduce or, possibly, eliminate estate tax if your estate exceeds the exclusion limit provided by law. An advantage of a trust over a Will is that a trust avoids the cost and delay of probate.

Your estate plan should address property titling to ensure the title reflects your desire with regard to community property or separate property and that the revocable trust has been "funded."

The payment of life insurance proceeds and retirement plan benefits at death is directed by beneficiary designations. These should be coordinated with your entire estate plan.

If you have children, guardians should be selected to care for them during their minority, a trust established for their benefit, and a trustee appointed to manage the assets and make distributions to your children as dictated by the trust.

Please see Estate Planning Process

The extent of your plan depends upon your specific family and financial circumstance. We would be happy to assist you in the design and implementation of a plan that addresses your specific needs in an economical and efficient manner.


$5,490,000 in 2017,
indexed for inflation
Unified: gift, estate and GST
40% estate tax rate

Because of the high estate tax exemption currently available, the vast majority of people will never have to worry about estate taxes, and married couples who currently have "AB" trusts (see below) may prefer to simplify their estate plan.  The law provides that the estate and gift tax exclusion amount (the amount that can pass estate and gift tax free) is currently $5,490,000 per person.  In addition, a surviving spouse may be able to use a deceased spouses exclusion amount that was not used by him or her at their death, a concept called Portability."

For most, it would be prudent to re-evaluate their estate plans and documents.  Many married couples included in their estate plans an AB Trust, also known as a Family or Bypass Trust,  in order to ensure the use by both spouses of the much lower estate tax exclusion amount that was available at that time.   This may not be necessary now given the $5,490,000 exclusion.  If avoiding estate tax was the only reason that the Bypass Trust was included, you may be subjecting your surviving spouse to unnecessary complexity and expense after you die.  In addition, a Bypass Trust has the disadvantage of not allowing the tax basis of appreciated assets to be increased to the fair market value as of the date of the surviving spouses death, "step-up in basis."

That is not to say, however, that all Bypass Trusts should be eliminated, there are non-tax advantages to retaining it.  For example, perhaps your existing revocable trust was designed to limit the use of funds by the  surviving spouse, to provide management and/or asset protection for the surviving spouse of trust assets, or to irrevocably direct the disposition of assets upon the death of the surviving spouse. For theses cases, the Bypass Trust may still be appropriate.  

If the reason for establishing a Bypass Trust within your revocable trust is to reduce or eliminate estate tax, you may decide to simplify your trust, and the trust administration after the first death, by making the Bypass Trust effective only if elected by the surviving spouse after the death of the first to die.  This is called a Disclaimer.  Although simple, the procedure is very specific and proper legal documentation is critical, both in drafting the trust and in making a timely election (9 months after the date of death of the first spouse to die).

The fact is, that although estate tax has been the factor that has primarily driven people to seek estate planning it has never been the sole or even primary benefit to planning.  The myriad of other planning issues, as most that have gone through the process can attest, are often the real benefit to estate planning.  

Estate Planning
3150 Crow Canyon Place, Suite 250
San Ramon, CA 94583  925-806-9008
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