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Estate Planning Is NOT Just for the Wealthy


The notion that estate planning is only for the wealthy couldn't be further from the truth. Estate planning always has been linked to tax planning, which everyone needs to be conscious of. If you fail to take care of basic estate planning documents, you'll find additional costs and attorney fees through the administration of a probate estate or guardianship, for example, and these costs can exceed $5,000.

It costs money to resolve who should administer your estate simply because you died without a will. The court will require that a family member post a bond to show good credit, and if no one can, an attorney or other third party then serves as the administrator. This adds extra expense. If any property needs to be sold, a court order is needed and more attorney fees are racked up.

All this and more can be avoided with fewer up-front costs by establishing simple estate planning documents. If not accomplished, the probate and guardianship processes can lead to unpaid bills and default on debts, including one's mortgage. But with proper estate planning — including a power of attorney — someone can step in quickly, paying bills to prevent default and saving significant money. For low- or modest-income families, the cost of not meeting with an estate planning attorney can be much greater than the cost to meet with one.

Attorneys always touted the tax planning benefits of comprehensive estate planning, and fear of the taxman used to be a prime motivator for the argument that everyone needs estate planning. Today, the human relationships aspect of estate planning is highlighted. It's important to help modest families as well as the wealthy determine who should get the estate — which child is more deserving? The important decisions regarding disposition of assets at death may be challenged or manipulated, as some relatives cheat and steal to get a bigger piece of the pie. Will and trust contests are filed daily.

Other newer considerations that are part of all kinds of families: Medicaid planning for nursing homes, as well as same-sex couples and estate planning. It's important to understand the rules and penalties for Medicaid gifting, for example; without planning, you may become ineligible for benefits right when you need them most.

And let's consider the role of women in families — even though women have more earning power than ever before, many wives take a back seat to their husbands when the subject of estate planning comes up. But both spouses should be fully involved.

People tend to think of estate planning as something that only the wealthy or elderly need to do. In truth, regardless of age, your situation in life or your level of wealth, estate planning accomplishes universal goals. Sometimes in an attempt to avoid thinking about the worst, we miss the opportunity to do the best for our loved ones. Estate planning helps you confront your fears and eases even a modest family's responsibilities should the unexpected happen.


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Kim & Lee
Kim & Lee, LLP
2305 W. 190th St. Suite 100
Torrance, CA 90504
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Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
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