As simple as the question may be, seeking its answer can guide you through understanding estate planning better. An estate goes through an extensive process – from planning until its administration. Understandably, some may be curious whether the process is the same for big and small estates.
Estate planning eligibility: No
Some may think that estate planning is only for those with numerous properties. But contrary to that belief, estate planning can benefit anyone who wishes to set the parameters of the distribution of their properties, no matter how few, when they pass away. A well-established estate plan will also help your loved ones avoid a lengthy and costly distribution process.
Tool selection: Yes
When choosing which tools you should include in your estate plan, the size and complexity of your estate will somewhat matter. For example, let’s say that you only have life insurance naming your spouse and child as beneficiaries. You may not need a will or a trust since life insurance already specifies the beneficiaries and the distribution process.
But of course, other factors will also play a role in your planning, including your goals, priorities and the types of assets you hold.
Estate administration: Yes
Depending on its size, an estate may avoid probate in California. According to the state’s probate code, if the real and personal properties in the estate amount to a total not exceeding $184,500 (as of writing), it qualifies as a small estate and won’t have to go through probate. Note that the administration shall calculate the total value of the assets as of the date of the decedent’s death.
Yes, the size of the estate matters, but not in the way that you think. Do not let the size of others’ estates discourage you from starting your own estate plan. Having protection over your assets in case you pass away can help secure your properties and greatly benefit your loved ones.