If you have a fixed income in retirement, you may think that you do not need an estate plan. The truth is, if you have any significant assets or want to make sure your wishes are carried out, you should start estate planning now.
Why You Need a Plan
Even if you have limited income to meet your expenses now, you may have significant, unliquidated assets. These assets could include retirement accounts, lifetime pensions, real estate, jewelry, or investment vehicles like bonds. Many people in retirement also have specific wishes for who will receive property after their deaths.
Without an estate plan, even a simple one, your relatives will have little say in how your assets get distributed after your death. You cannot just make verbal promises to give certain people items, or make a list and leave it in your safe. If you do so, California law says that your estate will be distributed by intestate succession. This is a special list indicating who inherits an estate that is used by courts when someone dies without a will.
Costs of Estate Administration
In comparison to the cost of working with a lawyer to create a few simple estate planning structures, estate administration is extremely expensive. In California, probating a will can cost tens of thousands of dollars alone (depending on the estate size). Your estate may owe a huge tax bill, especially if its value exceeds the estate tax exemption. This can occur even if you currently live on a fixed income – for example, if you have valuable unliquidated assets such as real estate. If you are a non-U.S. citizen, you may owe more taxes due to U.S. restrictions on foreign estates and gifts.
In short, though paying for a lawyer now may seem expensive when you have limited income, it could result in your heirs receiving more from your estate in the long run. For those with significant assets, important wishes, or international connections, seek out an estate planning attorney who can help.
Planning your estate? Look to Janet Brewer, Esq. for thorough and thoughtful estate planning advice. Janet’s more than 20 years of legal experience will give you confidence and peace of mind. To schedule a “Get Acquainted” meeting, visit Janet's website or call her office at (650) 469-8206.