The long and the short of what could happen if you don’t have an estate plan in place if you live in California is that you could trigger a court action called a conservatorship if you became incapacitated or a probate action if you died.

A conservatorship action is court order that appoints someone to oversee your financial affairs if you are incapacitated (unable to manage your own affairs).

A probate action is the process of proving before a competent judicial court that a Will offered for official recognition is genuine and determines who shall inherit your property. If there is no original provable Will, the laws of intestacy determine who will inherit the property. Each state has an intestate statute that outlines the order of succession to property under the probate code.

inheritance of assets

In many cases, it’s undesirable to be forced to file for a conservatorship. Conservatorships are typically expensive. You may also be left with someone you never imagined in control of your finances under a conservatorship.

Some disadvantages to a probate action after you die include the cost to probate your estate, the length of time to file and conclude the probate action, the stress on the Executor in dealing with the court, and the public nature of probate actions.

Some typical assets that could trigger the need for a probate action include real estate, business interests in your name and/or bank, investment, annuity, life insurance or retirement accounts with no beneficiary.

Probate and conservatorship actions can be avoided however with proper estate planning. Assets such as real estate, business interests and investment accounts that are owned by a trust will bypass the probate system and can be privately administered through your attorney through a process called Trust Administration.

Bank accounts can also be owned in the name of your trust, or they can name your trust as the designated beneficiary at your bank. Life insurance and annuities can also name your trust as the beneficiary. Though consultation with your attorney is best to determine the right course of action for your situation. Retirement accounts can only be owned in your individual name but can name a person or a trust as the beneficiary.

To avoid a conservatorship and probate, there are a few additional estate planning documents to include besides a trust in your estate plan. They include a pour-over Will, power of attorney, a health care directive, and a HIPAA release of medical information directive.

For help setting up your plan or to update your existing plan, reach out to us at (760) 448-2220.
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