LAW OFFICES OF JASON S. BUCKINGHAM, INC.
560 First Street
Suite C-205
Benicia, CA 94510
ph: 707.745.2200
fax: 707.780.6357
alt: 877.812.2200
Estate Planning
Estate Planning Services
Most people don't need complicated estate plans. For property and business owners in California, the safest way to avoid California's expensive probate fees is through a living trust.
We offer convenient, affordable, reliable advice and service from a California licensed attorney. We offer living trust packages for property owners and business owners at an affordable flat fee. We also provide estate planning services for Registered Domestic Partners. Please contact us to schedule a no-obligation initial consultation.
Do you already have a plan, but you can't find the lawyer who drafted it? Have you reviewed your plan in the past two years? Have you had any major life changes that are not included in your plan? We routinely review, update and amend existing estate planning documents.
What our packages include:
- Living Trust (to avoid probate)
- "Pourover" Will (for assets left out of the trust)
- Durable Power of Attorney for financial matters
- Advance Health Care Directive
- Trust funding documents to transfer assets into your trust
- Notary services
- Free deed recording for your primary residence
Special Services:
- LLC formation for investment properties
- Buy-Sell Agreements for business owners
- Estate Planning for Registered Domestic Partners
- Estate Plan reviews and amendments
- Living Trust (to avoid probate)
California Probate Code § 10810 sets statutory fees for a probate. Both the lawyer and the executor (or administrator) for the estate are entitled to fees, so the costs are generally double the amounts shown below. Higher fees (for "extraordinary services") can be ordered by a court for complicated cases, such as when real estate must be sold to settle the probate.
Statutory fees are based on your "Gross Estate." Your Gross Estate includes anything that does not pass outside of Probate. In valuing a Gross Estate, the whole value of an asset is used, without backing out any open loans. For example, a home worth $600,000 with a $400,000 loan against it is a $600,000 asset for calculating the probate fees.
The fees are:
4% of the first $100,000 (4% x $100,000 = $4,000),
3% of the next $100,000 (3% x $100,000 = $3,000 PLUS the first $4,000 = $7,000),
2% of the next $800,000 (2% x $800,000 = $16,000 PLUS $7,000 = $23,000),
1% of the next $9,000,000 (1% x $9,000,000 = $90,000 PLUS $23,000 = $113,000), and
0.5% of the next $15,000,000 (0.5% x 15,000,000 = $75,000 PLUS $113,000 = $188,000).
For estates larger than $25,000,000, the court determines the fee for the amount that is greater than $25,000,000.
Special information about the upcoming changes in the Federal Estate Tax rules:
As we get closer to 2010, you may see many a politician patting themselves on the back for "repealing the death tax." However, as is so often the case in politics, Congress giveth a little with one hand, and with the other taketh away much more. A 2006 Washington Post article explains the problem in detail.
Ever heard of carryover basis? If not, don't worry - you will.
The impending change will hit roughly ten times more families in 2010 than the current scheme will affect in 2009.
Here's how it works:
Under the current estate tax, in 2009, every person can give away up to $3.5 million ($7 million for a married couple) with no estate tax liability. What’s more important, heirs can inherit an asset that has appreciated in value (like real estate and stocks) and sell it the very next day, at current market value, with no capital gains tax liability. This is called a "step up" in basis, and the current estate tax rules allow a full step up.
Not so in 2010…the carryover basis (heirs "carry over" the original value of the appreciated asset, with some adjustments for capital improvements) replaces the step up basis rule. There are a couple of exemptions: up to $1.3 million for heirs, with an additional $3 million for a surviving spouse. Even with the exemptions, the capital gains rate is scheduled to increase to 20% for 2010, so when heirs go to sell an appreciated asset, they will get a brand new (and perhaps unexpected) tax bill.
For example, let's say a widow dies in 2010, leaving a house acquired in 1987 for (basis) $80,000 with a current value of $1 million. She also had stock acquired in 1995 for $70,000 with a current value of $1.1 million. Our poor widow left two children - one gets the house, the other gets the stock. The real question is: how do the heirs split the exemption total?
Current value of assets: $2,100,000.
Total basis in the assets: $150,000.
Maximum carryover exemption: $1,300,000.
Taxable portion of asset value: $800,000.
Tax due if assets are sold: $160,000.
This same estate would incur no tax liability if our poor widow dies in 2009.
560 First Street
Suite C-205
Benicia, CA 94510
ph: 707.745.2200
fax: 707.780.6357
alt: 877.812.2200
