One of the most common misconceptions about estate planning is that it does not become relevant until you’ve reached a certain age or wealth. The truth is that nearly every California resident needs an estate plan, especially members of the younger generation who often have more complex asset portfolios than their predecessors. Here’s why.
- Estate Planning is Not Just Post-Mortem Planning. A well-drafted estate plan is designed to address what happens upon your death, of course, but also what happens upon your incapacity. Your estate plan designates agents to act on your behalf to make medical and financial decisions for you during your incapacity. This ensures that your basic needs are met and your loved ones are taken care of even when you are unable to fill that role yourself. And, of course, we must plan for even the most unlikely scenario. Being prepared for every scenario by enacting an estate plan early in life provides loved ones with a path forward in the wake of unanticipated loss.
- Estate Planning Becomes Critical Early On. One of the primary goals of adopting an estate plan is to ensure that your affairs are managed by your loved ones or professional fiduciaries rather than by the California court system. Planning for incapacity is important for all Californians, regardless of wealth level or age. Planning for death is most important for those who have a gross estate that is nearing or exceeds $150,000, because that is the threshold for what must be managed by the full California probate process (a process that is costly, time-consuming, and public). Remember that your gross estate does not take into account any debts, so your mortgages and student loans are immaterial for this calculation. You also need an estate plan immediately if you have children, own real property, or have stock options or other interests in public or private companies.
- Regular Updates Provide for Enhanced Planning Opportunities. All of our attorneys at Doyle Quane either have or are in the process of obtaining their master’s degree in taxation. This allows our team to provide sophisticated tax planning advice that evolves as your estate evolves. For example, individuals who have interests in public or private companies may wish to consider making lifetime gifts to allow the appreciation of such assets to happen outside of their estate. The earlier this is done, the greater the potential tax outcome.
- Estate Planning is an Integral Part of your Long-Term Financial Planning. We work with your financial advisor and accountant to ensure your estate plan takes into account your savings, investment, and gifting goals during your lifetime. Working as a team, we devise lifetime gifting strategies that allow for generational wealth transfers that take advantage of currently available tax planning strategies. We also set up plans with an eye towards your evolving estate: your estate plan must be flexible so that it makes sense based on your current asset portfolio. There are many estate planning document generators available online, but these tools may not provide a plan that will weather the storm of changes to tax regimes and changes to the nature and value of your assets. For example, all of the estate plans we draft at Doyle Quane have an eye towards the impending major change to the estate tax regime in 2026.
- Early Action Makes Later Updates Inconsequential. The primary tool in a basic estate plan is the revocable trust. One of our goals in adopting the revocable trust is to ensure that all of your assets are retitled into the name of your trust so that they can be managed by your loved ones or a professional fiduciary upon your death or incapacity, rather than by the California court system. The earlier you adopt this trust the easier it becomes to manage over time. As you acquire assets over your lifetime, you acquire them in the name of your trust. That way, each time we make updates to your estate plan over your lifetime, all of your assets are automatically made a part of this update as well. Early planning ends up saving a lot of headaches down the line.
- Remember: Your Estate Plan is a Living, Breathing Document. The estate plan you adopt when you are 30 will more than likely be different than the estate plan you have in place at age 60. Between now and then your assets will change, you may welcome new members to your family, and you may change your mind about who would be best to manage your affairs upon your death or incapacity. But what is critical is that you have a plan in place at each juncture. Doing so allows you to engage in smart financial planning over your lifetime and provides your family with peace of mind that they have a roadmap to reference in the event of your death or incapacity.
There are several other reasons estate planning is a critical item to check off of your to do list. We would be happy to speak with you about your unique situation and what we would recommend for you and your family. Contact us today for a complimentary introductory phone call to discuss your estate planning needs: 925-317-1028.
Brittany Doyle Riley, Esq. is a trusts & estates attorney at Doyle Quane. Her practice focuses on estate planning, trust administration, and probate matters, with a particular emphasis on helping the next generation complete their estate planning. She also assists client with entity formation and other corporate governance matters. Brittany is a graduate of Harvard Law School and the University of Miami. She is in the process of obtaining her dual LLM in Taxation and Estate Planning from Golden Gate University. She lives in Danville with her husband Brad and their son, Finnegan.