Estate Planning While Moving Your Estate

The closing has happened. You’re trying to pack boxes, arrange for charitable donations of things you no longer need, and eyeing every belonging with a critical eye.

As you prepare to move into your new home, it’s also a good time to think about your final home – a cemetery, crypt, or urn.
In fact, this is the perfect time for developing your estate plan and funeral arrangements. Why? “You’re in the mode to plan,” explains Mitchell Munroe of Chapel of the Chimes.

Purchasing a home is also a common trigger for people to consider the long-range plans they have made. “It’s usually some sort of major life event that makes you think of your own mortality,” he explains. “You’re not going to wake up one day and say, ‘It’s a sunny day. I’m going to go to the cemetery and plan my funeral.'”

While the thought of additional expenses might be unwelcome, making your funeral arrangements now can actually save you money. In addition to any discounts or specials, and locking in today’s prices, Mitchell points out that expensive mistakes can be avoided by arranging for what you want now.

“You want to make decisions now, when you are clear-headed,” he explains. He gives two recent examples of why this is important. In one case, a man whose wife became suddenly ill chose a crypt high up on a wall. After a short time, he realized he wanted the crypt closer to the ground, where he felt closer to her. He ended up moving her remains, at what Munroe says is “both a financial and an emotional cost”. Munroe has also had people choose to scatter a loved one’s ashes, only to regret it later, when they realize there is no physical place for them to feel they are in the presence of their departed loved one.
Of course, such plans should be part of an overall estate planning process. Attorney Andrew Dosa, who practices estate planning, agrees with Munroe that big life events, such as a home purchase, can act as a catalyst for people to take action.
“My experience is that people know they have to do certain things, but it’s the timing. There’s usually a trigger event, such as a job change, planning for retirement, or buying a home,” Dosa notes. “They say, ‘Now’s the time to do it’.”
Dosa says that, for new homeowners, estate planning is particularly important. “After you purchase the home,” he explains, “your assets will exceed $100,000, which requires probate in California.”

Nor does that $100,000 take into account any debts. So even if your $500,000 home has a $525,000 mortgage, for probate purposes, only the value of your $500,000 home is considered. “It’s the assets you have, it’s not the liability that drives you to a net value,” Dosa adds.

Avoiding probate can be done through careful estate planning, and usually involves the formation of trusts, Dosa notes.
But why avoid probate? Dosa defines probate as, “a legal proceeding where the court makes sure your assets are distributed to the people who should receive them”. That sounds desirable.

However, probate generally costs, by Dosa’s estimates, from 5 to 10 per cent of the total estate, in the form of executor fees, attorney’s fees, and other related costs.

Perhaps more disconcerting to some is the fact that probate is also a public proceeding. “All of your financial affairs, good or bad or embarrassing, are there for anyone who wants to take a look at it,” Dosa states.

Dosa says that solely having a will does not prevent probate from occurring, so trusts are often the ideal vehicle for many people’s estate plans.

Of course, it isn’t just the fact of your eventual demise that estate planning can cover. “Estate planning involves both pre-death and post-death considerations,” Dosa observes. “One of the major pre-death considerations is helping to preserve your assets.”

In plain-spoken terms, that means having an estate plan in place can also take care of you and your home if you are suddenly disabled. If you are hit by a truck tomorrow, who will pay your mortgage? Who has the right to collect your paycheck or other wages, and to make mortgage and insurance payments from those?

Dosa says that such a disabling incident is not unlikely. “You are much more likely, by the age of 65, to be disabled, at least temporarily, than you are to die,” he states. By naming someone to handle your affairs for you, should that occur, your home won’t be in jeopardy because of a one or two month hospitalization, for example.

Of course, more than the home or any other material possession, many people make estate planning arrangements as they realize the value of the loved ones who are moving into their new home with them.

Dosa relates a story of talking to a woman about estate planning on the phone. “I was going over various things, ‘you have to think of this, and this and this’. And then I said, “And you have to think of someone to care for your kids.'”

That was all that mattered. On the other end of the phone was silence, and it was clear that other arrangements were secondary. “That’s what hit her. After awhile, she said, ‘I want to make sure my kids are OK.'”

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