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  • Gabriel B. Lenhart

Strategies to Keep Your Money in Your Family

Currently, if you’re single, you can own up to $5.45 million in assets before your heirs have to worry about paying estate taxes. We’re in an election year so this figure is subject to change, but even if it is rolled back to $3 million most families don’t have to worry much about tax planning. The bigger issue that families do need to concern themselves with are managing the step-up in basis on inherited assets such as a piece of property or investments. A step-up in basis changes the base value of inherited property so that the equity or gains created during one’s lifetime goes untaxed to their heirs. Meeting with your accountant and estate attorney is the best first step to navigating these complex issues. While you’re talking to your professionals, you should also ask them about these three strategies.

In order to deviate from California’s statutory law regarding what happens to your property upon your passing, you should first draw up a will to reflect your desires regarding passing your property on once you’ve passed. While this is a good first step, many people don’t realize that a will typically results in the probate of your property and can take years to complete resulting in tens of thousands of dollars spent.

Not all assets need to be probated through a will, and there are ways to avoid the perils of probate without having to create a trust. Some accounts, such as life insurance policies and retirement funds allow owners to name beneficiaries to be paid after their passing. It’s always wise to check the beneficiary information periodically, especially after a major life change, to ensure that a beneficiary is listed and it is not a former spouse or loved one who has passed. While this may be a good alternative for some, by merely naming a beneficiary the extra step of protecting these assets from unforeseen circumstances in the future is not accomplished.

If you have a sizeable estate, own a home, or are worried about your heirs’ management of their inheritance, a trust that will allow you to exercise more control regarding the management and distribution of your assets after your passing, and it also allows your heirs to avoid the expensive and time consuming process of probating your estate. Trusts are set up in various ways to protect assets during your lifetime as well as after you pass, they also provide guidelines that will take into consideration changes in your beneficiary’s circumstances to ensure that your hard-earned money is managed and spent wisely.

Complex strategies and changing tax codes can make estate planning feel intimidating, however ignoring this “elephant in the room” can result in high taxes and other costs to your beneficiaries. Estate planning is designed to provide you with more control over your assets, prevent disputes within your family, and ultimately result in a cohesive plan to be followed that will allow your loved ones to navigate this process efficiently and painlessly.

Please note that this article is a general summary of law and omits many important details, footnotes, and caveats. It is no substitute for legal advice from a lawyer based on your particular circumstances.

For more information or to speak with a lawyer, please call us at (530) 268-5485, visit our website,, or send us an email at

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