Estate planning is one of the most important things you can do to protect your loved ones and ensure your assets are distributed according to your wishes.

Unfortunately, many Californians make avoidable estate planning mistakes that can lead to costly legal battles, unnecessary probate delays, and unintended troubles for their heirs. Working with an estate lawyer is crucial into avoiding mistakes.

Understanding Estate Planning

What is Estate Planning and Why is it Important?

Estate planning is the process of preparing for the distribution and management of your assets after your death or incapacitation. It involves creating a comprehensive plan that ensures your wishes are respected, and your loved ones are protected. Estate planning is essential for individuals of all ages and income levels, as it helps to avoid confusion, conflict, and unnecessary expenses.

A well-planned estate can provide peace of mind, knowing that your assets will be distributed according to your wishes, and your loved ones will be taken care of. It can also help to minimize estate taxes, ensure the continuation of your business, and protect your assets from creditors.

The Estate Planning Process

The estate planning process typically involves the following steps:

1. Assessing Your Assets: Start by identifying and valuing your assets, such as real estate, investments, retirement accounts, life insurance policies, and personal property.
2. Defining Your Goals: This could include ensuring the well-being of your loved ones, minimizing estate taxes, and protecting your assets from creditors.
3. Choosing Your Estate Planning Documents: Common documents include a will, trust, power of attorney, and living will. Each document serves a specific purpose in your estate plan.
4. Selecting Your Beneficiaries: Choose who will inherit your assets and in what proportions. This step ensures that your assets are distributed according to your wishes.
5. Naming Your Executor: Select a person to manage your estate after your death and carry out your wishes.
6. Creating Your Estate Plan: Work with an experienced estate planning attorney to create a customized estate plan that meets your unique needs and goals. An estate planning lawyer can help you navigate the complexities of estate law and ensure your plan is legally sound.
7. Reviewing and Updating Your Estate Plan: Life changes such as marriage, divorce, the birth of a child, or significant changes in financial affairs may necessitate updates to your plan.

By following these steps, you can create a comprehensive estate plan that ensures your wishes are respected, and your loved ones are protected.

1. Not Having Any Estate Planning Documents

You’d be surprised how many people assume they don’t have enough assets to justify an estate or involve a good estate planning lawyer. Sometimes they think their family will “figure it out” when the time comes.

Why This is a Problem:

• If you die without a will or trust, your assets will be distributed in ways which may not align with your wishes.
• Your estate may go through probate, which is a lengthy and expensive court process that can take months or even years to resolve.
• If you have minor children, the court will decide who becomes their guardian rather than you making that decision.

How to Avoid It:

• Get trust and estate counsel on your side. The estate lawyer team at Best Coast Estate Law, PC can create a will or trust with you as soon as possible, regardless of the size of your estate.
• Working with an experienced estate planning attorney can ensure your documents are legally sound. We can guide you through the estate planning process. Brittany Britton, our chief estate planner, is a licensed attorney who specializes in end-of-life planning. She helps educate clients about the estate planning process and relevant laws regarding estate transfer and taxation.

2. Not Updating Your Estate Plan Regularly

Estate planning is not a “set it and forget it” process.

Major life events inevitably happen, things change, and so, your estate plan should evolve with them. Life changes can impact an estate plan significantly, which means it’s important to regularly update it in response to big life events.

Unfortunately, many people create a will or trust and never review it again.

Why This is a Problem:

• Outdated beneficiary designations could result in assets going to an ex-spouse or someone you no longer wish to inherit.
• New state laws may impact how your estate is taxed or distributed.
• Changes in family dynamics (births, deaths, divorces) can create conflicts if your plan doesn’t reflect your current wishes.

How to Avoid It:

• Review your estate plan every 3-5 years with the help of an estate lawyer, or after major life events such as marriage, divorce, the birth of a child, or a significant change in financial affairs.
• Update beneficiary designations on life insurance policies, retirement accounts, and payable-on-death accounts.
• Work with an estate planning attorney to ensure your estate planning documents comply with current California laws. Estate planning attorneys assist in creating customized estate plans based on individual circumstances, ensuring the plan remains effective and up-to-date.

3. Failing to Name Beneficiaries (or Naming the Wrong Ones)

Beneficiary designations are just as important as the estate planning documents.

Many people forget to name beneficiaries for key assets, or they fail to update them when their circumstances change.

Why This is a Problem:

• Assets with no named beneficiary may have to go through probate, delaying the distribution of funds.
• If you name a minor as a beneficiary, the court may have to appoint a guardian to manage the funds, which can be costly and complicated.
• If you name a disabled loved one as a direct beneficiary, it could affect their eligibility for government benefits.

How to Avoid It:

• We can help ensure all retirement accounts, life insurance policies, and financial accounts have updated beneficiaries.
• We can help you set up a trust to manage distributions for minors or loved ones with special needs.

4. Misunderstanding California’s Community Property Laws

California is a community property state, which means that assets acquired during marriage are generally considered jointly owned by both spouses.

A common mistake we encounter is people assuming they can pass on property however they wish, without understanding how these estate laws apply.

Why This is a Problem:

• A spouse may have a legal right to a share of assets, even if they are not explicitly included in a will or trust.

How to Avoid It:

Work with an estate planning attorney who understands California’s community property laws. Selecting the right estate planning attorney, or law firm is crucial, as their expertise in estate law, tax planning, and trust administration can significantly impact the effectiveness of your estate plan.

5. Not Planning for Incapacity

The estate planning process isn’t just about what happens after you pass away—it also includes preparing for a situation where you become unable to make decisions for yourself.

Failing to include incapacity planning in your estate plan leaves your family with difficult decisions.

Why This is a Problem:

• Without a durable power of attorney, your family may have to go to court to get permission to manage your finances.
• Without an advance healthcare directive, your loved ones may struggle to make medical decisions on your behalf.
• Failing to plan could lead to court-appointed conservatorship, where a judge decides who controls your affairs.

How to Avoid It: Consult an Experienced Estate Planning Attorney at Best Coast Estate Law, PC

• We can help you create a durable power of attorney to allow a trusted person to manage your finances if you become incapacitated.
• We can set up an advance healthcare directive to outline your medical preferences and designate a healthcare proxy.
• We can ensure your trust includes incapacity provisions, which allows a successor trustee to step in if you are unable to manage your affairs.

Working with an estate attorney helps cover your bases. At Best Coast Estate Law, PC our estate planning attorney consistently receives referrals from various financial advisors, and past clients. We have a proven track record of helping clients navigate inheritance taxes, the legal process,, and avoiding probate court.

Avoid Estate Planning Pitfalls in California

Estate planning is one of the best gifts you can give to your loved ones, but only if it’s done correctly, with the help of an estate attorney.

If you’re unsure whether your estate plan is up to date or legally sound, consulting an experienced California estate planning attorney is a smart step.

Call Best Coast Estate Law, P.C. to prevent expensive legal battles and make sure you have the peace of mind you need for you and your family to move forward. 

Disclaimer: The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship. Brittany Britton is licensed to practice law in the state of California only