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Samuel B. Ledwitz. | Photo courtesy of the Law Firm of Bezaire, Ledwitz & Associates, APC
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By Shel Segal
Samuel B. Ledwitz, a longtime estate planning attorney, is encouraging two ideas that he believes to be essential steps later in life.
One, get a living trust to ensure you decide how your assets will be divided upon your passing. And two, make sure you update it every few years so those funds don’t end up in hands you don’t want them in or in a manner that’s unpleasant to you.
And there are definitely reasons for the second reason.
“Let’s say you’ve gotten divorced and remarried and haven’t updated your estate plan,” said Ledwitz, president and managing partner of estate planning law firm The Law Firm of Bezaire, Ledwitz & Associates. “Now there’s a question of who’s going to inherit your money. Did you change your beneficiaries on your 401K and your life insurance policies? If you didn’t, there’s the possibility your former wife could be inheriting something against your better wishes. That means maybe your kids didn’t get as much as you would have liked them to get.”
But naming money in your trust to your kids comes with a ton of questions you really should ask yourself, Ledwitz said.
“Do you want your kids to get that money when they’re 18,” he said. “Maybe they’re too young. Maybe there’s a child you don’t want to give money to. Maybe you have a child with a disability, you didn’t set up a special needs trust and now that child is going to get kicked off of government assistance. Maybe you have a child who has a gambling or drug problem. If you give them all that money it might all go to the bookie or the dealer. We’ve seen that in my office, all of these. So, you really need to think about all the different angles that affect you and your loved ones as you sit down and write your trust.”
Ledwitz said as he’s seen a lot in his nearly 25 years of practicing law, these aren’t far-flung scenarios he’s presenting.
“Things can happen that you didn’t expect,” he said. “That’s why you sit down and figure out how you want to be taken care of and treated. I would rather you sit down with me and talk this out rather than do it in front of a judge with all you family members suing one another or suing your estate for total control so you get to pay everybody’s bill.”
As far as the first reason, Ledwitz said making a proper estate plan is actually a rather simple process that is overlooked by most people.
“It’s true as for as estate planning goes, 70 percent of the population does nothing,” he said. “But the problem is this is usually a ticket to probate court.”
If you own a house and you have no living trust, that will get you to probate, a very lengthy and rather public way of dividing your assets. It’s also rather costly, Ledwitz said.
“There are about $3,000 of start-up costs,” he said. “You have a $500 filing fee with the court. There are a couple hundred dollars of publication fees. Your probate notice has to be published in the newspaper three times in 21 days. A bond has to be posted so no one can run off with the money. And there are a few other costs. That’s a few thousand dollars before you even say anything.”
And don’t forget to pay attorney as fees. Let’s say your house was worth $600,000. Attorneys would run around $15,000, Ledwitz said, adding those fees are set by the state of California.
An additional reason for writing a trust, Ledwitz said, is it can help you when you’re still alive, mainly if you become incapacitated.
“If this happens, who’s going to make your medical decisions?” Ledwitz asked. “Who’s going to make your financial and other personal decisions? If you don’t want to end up like Brittany Spears or have family members fight over your money in public, it would be wise to tackle these questions when you sit down with your attorney to write your trust.”
So, how much is it to write a trust? Ledwitz said it initially is $2,000 roughly and possibly another $1,000 to administer it, which he added is much cheaper actually than doing nothing.
If you would like to discuss any aspect of a proper Estate Plan, please phone The Law Firm of Bezaire, Ledwitz & Associates at (626) 398-0100 or log onto www.SmartEstatePlans.com.
