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Keeping your estate plan private

Many California residents may want to keep their estate plans private so that information relating to their assets and debts does not become public. Wills go through probate, which is a public process, so people might want to consider various alternatives.

Trusts

Unlike wills, trust documents are generally kept private. Trusts can be established either during the life of an individual or take effect after they die, and these vehicles can be used to convey assets and carry out the grantor’s wishes. There are tax consequences and administrative issues associated with establishing and maintaining trusts, so it can be important to discuss these matters with an experienced attorney in advance.

Life insurance

Life insurance policies typically do not go through the probate process and thus are not a part of the public record. Rather, a beneficiary will receive money under a life insurance policy without the involvement of a court. However, the owner must ensure that the beneficiary designation contained in the policy is up to date.

401(k) accounts

401(k) plan assets may also be conveyed to a beneficiary without the funds going through the probate process and information about the contents becoming public. This requires that a beneficiary be listed on the 401(k) account; otherwise, it will be considered to be a part of the decedent’s estate. Individuals should contact their plan administrator to ensure that the process will go smoothly and without any untoward delays.

Advancements

If a person distributes assets to family members as gifts, this generally will not become public. However, if there is a fight about whether such an advance should count against an heir when calculating inheritances, the information could become public. As a result of these considerations, individuals should consult with an experienced lawyer when trying to keep their estate plan private.

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