Plan Your Estate or Plan on Probate...
When you ask someone: "Do you have an estate plan?" You get a myriad of answers, from the: 1) "Planner" types, that say "Definitely!" or 2) "Middle of the Road" types, "Well I have a will, that's an estate plan, right?" or 3) "Resistant" types, "What, do I look like a Rockefeller?" And, of course, every imaginable response in between.
Well, everyone has an estate plan. The issue is whether you have created an estate plan that maximizes your amount of control under the laws, or whether you let the government's default plan (generally termed probate) decide what happens to your assets.
I have talked to many people--even those that have substantial assets--about estate planning and probate, with the following exchange occurring, almost verbatim, each time:
I'll say, "Do you have an estate plan, or are you familiar with probate?" And the other person will respond, "Oh, I don't have to worry about probate, I have a will." My response is invariably, "Well given the amount of assets in your estate, then you WILL go to probate. Further "probate" essentially means to prove the documents (will)." For example, in California if you are a single homeowner and you have a house titled in only your name, then most likely its gross value (not net equity) will trigger a probate. (NOTE: In California, a probate generally occurs when an estate has real and personal property with a combined value in excess of $100,000)
The point is that if you have not created an estate plan that directs how assets are to be transferred upon your death (i.e. through the use of a revocable living trust, or other planing device)--then the government has a plan for you. So, you can call it a "Probate Plan," "A Plan for Probate," or "Just Plain Trouble." Your loved ones and heirs will most likely call it a nightmare!
Some professionals attempt to define probate in terms everyone can understand. I will attempt to summarize these other definitions found in the Internet world--while trying to keep its somewhat humorous tone:
A probate is a case you bring against yourself (your estate),
With the costs coming out of your pocket (paid by your estate), and
That provides arguably as much or more protection to creditors (people you owe money to at your death) and to "disgruntled" heirs (people you may be related to but may not really care about)--
When compared to the protection provided to the ones your really care about (true loved ones).
If you have "no estate plan" then start your year off right and make a plan to do something--or when someone asks if you have an estate plan, you can at least sound somewhat knowledgeable as you say, "No, I have decided on a probate plan."
