Most of us should fear death and probate, not death and taxes

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By Paul A. Hanks
Attorney and Broker

The death of a loved one floods us with feelings of grief, loss and sadness. As those left behind grapple with this human loss, the absolute last thing that is needed is the dagger of probate.

Probate is a trap for the unwary which quickly ensnares one’s estate upon death even where an uncontested will is involved, and plunges the estate into a painstakingly slow and costly probate process. While this process is foreign and confusing to a layperson, it is a boon to the pockets of lawyers. 

There is a misnomer that the government stands in the loot line as well, ready to pillage the decedent’s estate by way of what is commonly known as the death tax. In truth and fact, it’s not death and taxes most of us should be worrying about but death and probate. In large part this is due to a very friendly and favorable federal exemption which shields most estates from taxation.

Historically the federal exemption was not friendly at all and estate planning attorneys had to resort to complicated trusts designed to shelter an estate from the sting of the death tax. Indeed, the federal exemption was as low as $675,000 in 2001, and upon one’s death the taxman would cometh like the hovering presence of the grim reaper and carve out a deep 37% tax on every dollar of the decedent’s estate over the exempt amount.

The result was so harsh and unfair that President George Bush orchestrated the passage of a massive tax reform relief package in 2001 which dramatically raised the federal exemption over time, to levels exceeding five million dollars per individual. The Tax Cuts & Jobs Act of 2017 went even further and doubled the federal exemption to over ten million dollars per individual.  California at the present time remains in line with the federal exemption.

While taxpayers enjoyed a huge sigh of relief, it is still foolhardy to relax as the dagger of not taxes, but probate, still awaits those who do not undertake proper estate planning. Unless the value of one’s estate qualifies as a small estate with the value of all countable assets not exceeding $150,000, the estate is thrust into the nightmare that is probate.

As an attorney, my law firm can make thousands upon thousands of dollars probating an estate, while the mere cost of a comprehensive living trust package averages only about $1,000. It is a very small price to pay in order to avoid probate and allow those you leave behind to seamlessly tend to the affairs of your estate outside of court with the lawyers left on the sideline. 

Attorney Paul A. Hanks operates Ironclad Living Trusts & Rocket Realty at 28581 Old Town Front St. Ste. 106 in Temecula, and can be reached by calling 951-587-3737 or by email at                                            ironcladlivingtrust@yahoo.com.