March 6, 2007

Importance of estate planning

Expediting process will save inheritors

By Robert P. Bergman
Special to the Times

Jane worked hard all of her life, and managed to accumulate a sizable estate, including a nice home she owned in Santa Clara Valley.

Jane had an estate plan prepared years ago. She had a revocable living trust, a will, a medical power of attorney and a power of attorney for her financial affairs. With the assistance of her attorney, a deed was prepared, signed and filed to transfer her home into the ownership of her trust, as well as her bank accounts, stocks, bonds and mutual funds.

A few years ago, Jane passed away. Her only daughter, Diane, inherited the property in Jane’s living trust, including her home and other property. Diane moved into her mother’s home shortly thereafter.

Diane experienced the value of her mother’s planning. As part of the administration of Jane’s estate, Jane’s home was transferred out of Jane’s trust and into Diane’s name. Because her mother had placed all of her property into her living trust, Diane had an inexpensive transfer of all of her mother’s assets, including the home, into her name. No Probate Court proceedings were required, and everything was handled working directly with her mother’s lawyer in his office.

Jane’s attorney counseled Diane to get her own estate plan prepared right away, so that her daughter Mary would be able to avoid Probate as well. Diane promised to make an appointment, but somehow her business and social life kept interfering and she never did.

About a year after Jane passed away, Diane was driving home when she lost control of her car. Her car crashed through the guardrail and flipped over, and Diane was killed instantly.

After Diane’s funeral, Mary went to her grandmother’s attorney to help her handle Diane’s estate. She discovered that her mother hadn’t preserved her inheritance. The property from her grandmother’s estate was over $1 million, but the lack of planning forced the estate through probate.

Bills for the estate and attorney, filing and court appraiser’s fees came to over $30,000. In addition, it took almost a year for the legal ownership of Diane’s property to finally be turned over to Mary, who was the sole heir.
If Diane had followed through with the suggestion of her mother’s attorney, Mary would have been able to avoid the increased expense and complications of putting the estate through probate.

Nobody likes to think about becoming incapacitated or dying, but the fact remains that many of us will become incapacitated, and we will all die someday. It is human nature to delay planning for incapacity or death. Don’t let your own human nature prevent you from taking the steps to plan for your family.

The choice is yours. You can be Jane, or you can be Diane.

Robert P. Bergman is an estate planning attorney and counselor who assists individuals and couples for possible incapacity and the eventual transfer of their property to their heirs. For more information, or to schedule a free consultation with him, visit his Web site at www.lawbob.com,. You can also reach him by e-mail at rpb@lawbob.com, fax at (408) 416-4591, telephone at (408) 247-0444, or mail at 920 Saratoga Avenue, Suite 107, San Jose, CA 95129. All inquiries are confidential.

This column is intended to provide general information about estate planning ideas, concepts, and laws, and is not to be relied upon as rendering legal advice about your particular situation. No attorney-client relationship is created by these articles. The laws concerning estate planning, wills, trusts, and estate taxes are very complex, often state-specific and change on a regular basis. Consult with an experienced attorney before taking any action that would affect your personal or business matters.