Estate Planning and Inherited Assets

What Estate Planning Tools Should I Use to Ensure My Inherited Assets are Distributed Per My Wishes?

Estate planning is a critical step towards preserving your legacy, yet fewer than half of all Americans have even a will in place, according to the most recent Gallup poll. Without an estate plan in place, your assets will be distributed per California law.  Assets that you inherited in your name alone may be treated differently than community property, which could cause issues for your spouse in attempting to take control over the assets.  Our California estate planning lawyers discuss some estate planning tools you should consider if you have separate inherited assets.

Distribution of Inherited Assets

Inherited assets are those assets you inherit in your name alone. Potential inherited assets could include stocks, bonds, property, trusts, cash, and more.  Under California law, assets you separately inherit will be considered separate property. While this directly impacts you in the event of divorce, it can also have implications for estate planning.  

Without a will in place, distribution of your inherited assets will depend on several factors, including how the stocks, trust, or other property are titled.  With some assets, you can re-title the asset so that your spouse is a co-owner.  Upon your death, ownership should go solely to the remaining spouse. Other assets, like an inherited trust, may not be so easy to alter.

In California, if your estate is valued at $150,000 or more, your spouse and children could be forced to wait many months or even years before they can gain control of your inherited assets and other funds.  This limbo period could prove devastating for your family.  In addition, your estate may be significantly diminished by taxes and probate expenses.  

Californians should take steps now to protect their heirs by creating a comprehensive estate plan.  Your estate plan could include a will, trusts, powers of attorney, and more.  With the help of your estate planning attorney, you can ensure your spouse and children swiftly have access to the funds they need after your death.