ESTATE PLANNING PROCESS
To help you get the right plan in place, we will generally need to have at least two meetings with you.
We understand that estate planning can seem overwhelming, but it doesn’t need to be. These are important decisions you are making about your life savings and safeguarding your loved ones, and we are here to answer all your questions. Every family situation is different.
Our firm doesn’t just create great estate plans; we also help our clients’ successors and families put the estate plan into action when the time comes. From our trust and probate litigation experience, we also have a very unique view of what will be required to make sure your estate plan will perform its intended purpose when the time comes, even if it is attacked. While no one can guarantee the outcome of any particular case, we have steps in place from your very first contact with us that are intended to protect YOUR wishes and make sure the instructions YOU provide in your estate plan will be followed and honored by your loved ones to give them the best chance of success.
Here is what you need to know about working with us:
Step 1 – First Contact
We strongly recommend that YOU, the person or married couple who owns the property that will be the subject matter of the estate plan, be the one/s to initiate the first contact with our office. For many reasons, we recommend that you not delegate this important step to anyone else. We understand that there are situations where a family member, employee, or friend lends a hand to help out, but we recommend that any help with transportation to your appointment, assistance with technology use, etc. happen only after YOU have chosen an attorney you are interested in working with and YOU initiate the first contact with that attorney. There are many reasons for this but the main concern is to protect your wishes in the event any disgruntled party chooses to attack your estate plan in the future.
Most people who don’t handle trust and estate litigation matters don’t realize that if someone is unhappy with the plans you have made for your property and you can no longer speak up about those wishes due to your death or incapacity, the attorney who helped YOU prepare your estate plan is a key witness. When the drafting attorney is asked who initiated the estate planning process, the answer should ideally be “the client contacted us to ask about doing XYZ.” If on the other hand the answer is “the client’s friend” or even that “the client’s child” initiated the process, the attacking party will always argue that the estate plan was that other person’s idea and that it was all done at THEIR instruction, not YOURS. The First Contact is very important because it establishes that the estate planning process with the attorney YOU chose, was initiated by YOU and no one else.
At the time of the first contact with YOU, our staff will set up a date and time for the first consultation meeting for which you should set aside 1 to 2 hours to go over your wishes and options. For married couples, this first consultation will need to be attended by both of you. After the first consultation meeting is scheduled with us by YOU, you can then delegate certain other people amongst your friends or family to help you with the other parts of the estate planning process. This is an important first step among others, to making sure your wishes will withstand a future challenge.
At this point in the process, our staff will not be able to quote fees for our services because we don’t yet know what kind of assistance you need from us. The flat fee for your estate plan can only be quoted by the attorney upon review of your situation and the type of planning you need at the First Consultation meeting.
Step 2 – The Client Questionnaire
We want to maximize your access to the information YOU need to meet YOUR goals. When you come to your First Consultation, we ask that you bring your completed Client Questionnaire, where you provide your general asset and family information to help us understand and analyze your current situation. The types and values of property you hold, the ages of your children, your marital status, and general information about your concerns will help us provide you with information that is directly relevant to your situation. All information you provide is confidential. We will send the Questionnaire to you by email or mail, or you can complete it in our office by arriving 20 minutes before your consultation time.
Step 3 – First Consultation Meeting – Approx. 1-2 hours
Our First Consultation meeting is a two part process and will generally take 1 to 2 hours. First, attorney Ernest Kim or Catherine Kim will review your goals and concerns with you and recommend the types of estate plans and trusts that would meet your needs. The attorney will also provide a general flat fee quote for the estate planning options that would best meet your goals. If you decide at that point that we are not the right fit for your needs, the meeting will end and no fees will be charged to you. Once you choose us and the type of estate plan that you would like to put in place, we will go into the design and specific terms and conditions you would like included in your plan, asking very detailed questions you have probably never been asked before. It is very important that you share any information that could be relevant to the needs of your family, your family’s future financial situation, and goals. This includes complete honesty about problems in your family including substance abuse issues, challenging relationships, and special needs anyone has. At the meeting, you will sign our flat fee retainer agreement if you decide we are the right firm for you, and 50% of the flat fee quoted will be due.
Step 4 – Estate Planning Binder and Document Preparation
We will prepare all of the documents that will become part of your estate plan. During this process, we will contact you for further information and follow up questions about your estate plan. On completion of the documents, we will contact you to set up your review and signing meeting with us. The documents are reviewed for quality control purposes throughout the process, and this document preparation stage can take 3-6 weeks.
Step 5 – Final Signing Meeting and Estate Planning Binder Review – Approximately 2 hours
At the final review and Signing meeting, we will go over your documents with you to confirm that they reflect your instructions and wishes, review the administrative steps and future management of your Trust by you as a Trustee, and you will sign your documents with our notary that day. We will provide you with the original documents in your Estate Planning documents in their protective binder, for your safekeeping.
Step 6 – Trust Asset Funding
Funding your assets into your Trust is an important step that must be completed to ensure that your estate plan will control them in case of your death or incapacity. At your signing meeting, we will provide you with the instructions and the needed documents for you to instruct your banks, real estate professionals, insurance agents and financial advisors on the proper titling of your assets. If you opt to have us help you with the real estate transfers into your Trust, we will conclude the recording of deeds with the County Recorder and provide you with these important Trust Transfer Deed documents to add to your Estate Planning binder for safekeeping once the County/ies have processed them. We encourage all of our clients to confer with their banks, financial advisors, realtors and insurance professionals to make sure your asset management partners are aware of, and can assist you with confirming that your assets are properly transferred into your Trust going forward. For most clients, the estate planning process is complete at this point and they will simply maintain the Trust going forward.
We recommend that all of our clients contact us for a periodic review of their plan every 4-6 years or when there are changes in their family situation or property profiles, to make sure their estate plan still meets the needs of their family in a changing landscape.
Step 7 – Liquidity Planning
Setting up an estate plan that fits your family’s needs is an important step to safeguard their future wealth and well being. The plans you make today will affect your ability to take care of yourself and your spouse, and the ability of your children and future generations to fund their educational goals, and achieve financial stability for themselves if something happens to you. No one intends to leave their families in financial turmoil. And yet in our almost three decades as probate and trust attorneys, the single most common problem we see our clients encounter year after year is the lack of liquidity.
Simply put, liquid assets = cash available for expenses. When a parent/spouse/breadwinner in the family becomes incapacitated or dies, their income stream ends. Most families today rely on dual incomes generate by two parents, or on one parent who works outside the home, and one who works inside the home to keep the home running. Single parents leave their families even more exposed to the problems posed by lack of liquid assets. A family that had a parent who provided childcare at home but who can no longer do so, will need to find others to fill that gap, often at significant financial cost.
We have found that many families even in the most affluent areas of California – and even among families with “assets” in the seven figures – have not properly planned for the cash that is needed to replace income from the incapacity or death of a key family member. Expensive California homes and the family cars generally also have monthly mortgage and loan payments attached that don’t end until they are paid off. The equity in real property is often difficult to tap without selling the property, especially on a single income that makes qualifying for loans much harder. Many people have never thought about the fact that their family can either live in the house keeping the equity unusable, or that it must be sold to use some of the money, but that a new home and a new mortgage requiring payments will be needed.
Without a proper plan to replace lost income, mortgages, living expenses, and tuitions can’t be paid and assets must be sold. Real estate, stock accounts and retirement savings must be liquidated, whether the market conditions are good for selling at that time or not. The death or incapacity of a loved one that was already a traumatic event, is generally followed by more upheaval when the family learns they must move out, leaving behind friends and important connections, and that college, graduate school and other plans must be changed to fit the new financial reality of the entire family.
Estate planning to protect your family is not complete without also including liquidity and life insurance planning for income replacement, especially in areas with high costs of living like California. Here are some simple questions to consider:
- If I retired or stopped working today, could my family still take care of the mortgage, educational costs, medical, and other financial needs?
- If my spouse retired and stopped working today, could I on my own still take care of your family’s housing, educational, financial, medical, and caregiver needs?
- What is the monthly cash burn rate for my family’s needs, and what will it become when my children are in college/graduate school/private school? Do we have enough cash without my income to cover the monthly cash needs, and if so, where will that cash come from and how long will it last?
If you and your spouse are not in a financial position to stop working right now because you need to support your family, please talk to us or to your insurance advisors today to make a plan for your family’s income needs in the event that you can’t work.
Step 8 – Optional – For Further Reviews and Documentation
Some situations will require further reviews, more complex planning, or further documentation of your wishes. Many family situations lend themselves to disagreements and litigation over property, and if your situation has such “red flags,” there will be further recommendations made by the attorneys to help your successors defend your legacy from attack. Not every family will need these further steps however, so these will be determined on a case-by case basis. It is very important that you share all relevant information to help the attorney advise you properly. Your attorney absolutely needs to know certain things about your family, even uncomfortable issues such as:
- Problematic family relationships or history of disagreements, especially between children;
- Family members with unreliable spouses, or who may be at risk of divorce;
- Family members who have past issues with substance abuse or addictions;
- Family members who have a past history of being involved in litigation over money;
- Family members with a history of gambling/ problematic spending habits/ bad investment decisions;
- Family members who don’t get along with others;
- Family members with a history of mental health issues;
- Financially struggling family members, or family members who are in debt;
- Family members with bankruptcy or creditor issues, or judgments against them;
- Family members in risky professions prone to being sued, such as dentists, doctors, lawyers, etc.;
- Family members with health problems that affect their ability to work
As a separate issue, business owners will often need to do additional planning for the succession of the business, if they expect it to continue to operate beyond their own management. Many business owners don’t realize that a family owned business will typically disappear if it is improperly operated due to the illness or death of the owner. Many valuable businesses that could have been sold for a profit or continued to generate income for the family, will fail because of the lack of planning. A business succession plan can ensure continued operation and success, even if there is no one else the family who can run that business.