ESTATE PLANNING 101

Back to Articles

Estate planning: it’s a topic no one wants to think about, yet it’s essential. Having an estate plan can give you peace of mind that your assets will be distributed according to your wishes when you die. If you’re your own estate planner and don't have your financial affairs in order, you will leave it up to your loved ones to decide what to do, or worse, the court.

A gavel and 3 books on a desk. One books title is "Estate Planning." — Estate planning by Nick Youngson CC BY-SA 3.0 Pix4free

Estate planning checklist

A major part of estate planning has to do with taxes. Estate tax is a tax imposed on an individual's estate after their passing, before it is distributed to heirs and beneficiaries. With the assistance of an estate attorney and/or tax professional, a thoughtfully designed estate plan can effectively manage and reduce estate taxes, gift taxes, and other tax implications.

Step 1: Make an Inventory of Your Assets

By creating a comprehensive inventory, you can clearly understand your tangible and intangible assets.

Tangible assets typically include:

· Real estate properties, such as homes and land
· Vehicles, including cars, motorcycles, and boats
· Collectibles like coins, art, antiques, or trading cards
· Other personal belongings of value

Intangible assets encompass:

· Savings and checking accounts
· Stocks, bonds, and mutual funds
· Life insurance policies
· Retirement plans include 401(k) accounts and individual retirement accounts (IRAs)
· Health savings accounts
· Ownership in a business

A Living Trust document on a desk with pen and gavel — Living Trust by Nick Youngson CC BY-SA 3.0 Pix4free

Step 2: Address Your Family's Needs

Once you, as estate planner, have a clear picture of your assets, it's vital to consider safeguarding your them and your family's well-being after your passing.

· Draft a Trust
Unlike a will, a trust is a separate legal entity a person sets up to hold their assets. A revocable living trust is a trust in which the terms can be changed at any time and doesn't require probate. A testamentary trust is a trust created by the grantor's will, while a living trust (sometimes called an inter-vivos trust) is one created by the grantor during his or her lifetime. Check with your advisor to find out which is best for you.
· Ensure you have adequate life insurance coverage. The amount of coverage needed depends on factors like marital status and your family's financial needs, particularly if you have dependent children.
Appoint a guardian for your children and consider designating a backup guardian.

Step 3: Establish Your Directives in Your Estate Plan

A comprehensive estate plan checklist should include essential legal directives to uphold your wishes. Here are some crucial directives to consider:

· Revocable Living Trust: With this kind of trust, you can transfer your assets into it and designate a trustee to manage them for your benefit and that of your beneficiaries.
· Medical Care Directive (Living Will): A living will includes your medical care preferences if you cannot decide for yourself. You can also assign a medical power of attorney to a trusted person.
· Durable Financial Power of Attorney: This directive enables a loved one or professional to manage your financial affairs if you are medically incapable. This person can act on your behalf in both financial and legal matters.
Limited Power of Attorney: If you're concerned about giving complete control to someone else, a limited power of attorney restricts the powers of your named representative.

Step 4: Review Your Beneficiaries

Ensure your estate plan is comprehensive by reviewing your beneficiaries on various accounts and policies. Take the following steps:

· Check Retirement and Insurance Accounts
· Verify Designated Beneficiaries
· Name Contingent Beneficiaries

Step 5: Get Familiar with California’s Estate Tax Laws

At the federal level, estate tax applies only to larger estates, regardless of the state of residence. However, estate tax laws vary among states, resulting in differing approaches to taxation.

California is among the 38 states that do not impose estate tax. However, it's important to note that this does not automatically guarantee a tax-free inheritance. Regardless of the estate's size, the Franchise Tax Board does not impose any estate taxes on inheritances. It's crucial to emphasize that this applies only at the state level, as the Federal Government has its own set of estate tax rules.

Step 6: Prepare to Reassess Your Estate Plan

Whenever your circumstances undergo significant shifts, such as marriage, divorce, the arrival of a new child, the passing of a loved one, or changes in employment status, it's essential to revisit your estate plan and make necessary adjustments. Even without significant life events, periodic estate plan reviews are crucial. Laws and regulations may have changed, so ensuring your plan remains up-to-date is vital.

I recommend all Santa Barbara homeowners (especially if acting as their own estate planner) work on creating their Estate Tax Check List with an estate attorney and/or tax professional. They can help maneuver the sometimes-complicated implications and leave you with a sense of relief that you’ve taken care of the issues long before you’re gone.

Of course, if you’re in the market for property to enhance your estate and think a new one might be in Santa Barbara, Montecito or the surrounding communities, call me at (805) 886-9378 or email me at Cristal@montecito-estate.com. I’ll happily show you what’s on the market right now, as well as share my pocket listings.

Other Resources:

How to Find the Best Santa Barbara Real Estate Agent
10 Luxury Amenities Every Cutting-Edge Home Needs
What Makes Santa Barbara One of the Best Places to Live?

Back to Articles

Client Reviews

“It was an emotional experience selling our mother’s home in Montecito that we all loved so much but Cristal made the process easier on our whole family by guiding us through the transaction every step of the way. She knows the market so well and everything she recommended was on point including the asking price, painting, and staging the home, which looked beautiful and helped the buyer envision her new home. We sold it the first day it hit the market with an offer above asking! Cristal did an incredible job communicating with us and the buyer to ensure that the transaction would run smoothly. We highly recommend using Cristal, she was a pleasure to work with! ”

- J & A

“Cristal is a pleasure to work with! Her knowledge of the local real estate market coupled with her amazing listening skills resulted in her showing us an array of homes that were all excellent choices. Her low-pressure patient attitude made us feel extremely comfortable with the whole process. I cannot recommend her highly enough.”

- M.F.

“Cristal Clarke is #1 in her field - and you don't become #1 by luck. Cristal works harder, and longer, and with more charm and patience than any real estate agent I have ever worked with in the past; her calendar has no weekend, her days have no clocks, her only concern is selling your property as soon as possible and for the best price on the market. Am I a fan? You bet!”

- P.B.

“We have used Cristal now several times and cannot express how grateful we are for her expertise, dedication, and unwavering support throughout the entire home-buying process. Cristal is knowledgeable, patient and attentive. Her attention to detail is remarkable, and she consistently went above and beyond to provide us with all the information and resources we needed to make informed decisions. Cristal is a skillful negotiator and advocate. She can navigate complex negotiations with professionalism and grace and felt like a true partner to us in the home-buying process. Cristal has a genuine passion for real estate and a deep commitment to her clients' satisfaction. I cannot speak highly enough of Cristal and her exceptional service. She is a true expert in her field and her dedication to excellence, combined with unwavering support is the reason we choose to work with her for all our real estate buying needs.”

- T.C.

“Cristal is a top-notch realtor who sold my home before it ever went on the market. I had two competing offers that enabled me to get top dollar for my home. Not only is Cristal superb but her team is extraordinary. I cannot say enough about Cristal and her team. They are simply phenomenal, the consummate professionals, who took care of every possible detail, making the sale and transition period, smooth from our end. They are also lovely, caring people, who knew all the right professionals, to get the job done. Thank you, everyone!”

- D.R.

“I could list lots of cool adjectives to describe Cristal. All good by the way. But, that is not why I or anyone should hire Cristal. My reason for hiring her, which proved to be correct, is very simple. She got the job done. And, she does it time and time again and with zero issues. And, that is why she is one of the top agents in the country. End of subject. ”

- M.A.

“Working with Cristal was a complete pleasure. Cristal was extremely patient with us as we evaluated nearly 2 dozen homes over a span of 2 years. Her knowledge of the market is unmatched. Cristal provided us with exceptional counsel as we evaluated opportunities and negotiated pricing. The closing process was handled thoroughly and efficiently. We could not be happier with our purchase and even more happy to now call Cristal our friend.”

- D.K.

“Cristal Clarke has conducted numerous real estate transactions for me beginning 13 years ago with the purchase of a Lemon Ranch. She has handled both large and small purchases and sales with equal dedication. As a negotiator, you can’t find anyone better. Her transactions are always conducted in the most appropriate and professional manner. Cristal has considerable knowledge of the Santa Barbara market.”

- S.N. Decker Ph.D.

“Living in Europe, we were to say the least, unaccustomed to the nuances of Real Estate acquisition in California and Cristal steered us through the process with absolute professionalism and personal attention to detail at every turn. Her in-depth knowledge of the market place combined with enthusiasm and drive was the only reason we secured the property of our dreams and will be forever grateful. If you are looking for personal discrete and private representation of the highest quality we suggest you look no further than Cristal Clarke.”

- Johan and Paula van den Berg

“Cristal is very straightforward, cheerful, helpful, professional and trustworthy….we felt very lucky to work with her.”

- John and Lacey Williams

“After considering our many choices, we are grateful it was Cristal Clarke of Sotheby’s International who represented the sale of our Montecito cottage. We are familiar with Cristal’s reputation of hard work and dedication to clients, but it was her attention to detail that made our experience so positive. She offered suggestions for staging the property, worked in harmony with potential buyers and was even able to secure back up offers. The sale of our cottage was completed much sooner than we expected, due in great part to Cristal’s professional skills and support. We highly recommend Cristal as a first choice for anyone needing representation with real estate.”

- Michael & Nancy Lee

“Our experience in working with Cristal Clarke resulted in the successful and discrete acquisition of a property which was not yet on the open market. Her knowledge of the Montecito/Santa Barbara area and vast expertise blended with her passion for real estate and architecture, provided us with the very highest level of professionalism and personalized services. Cristal exhibited a rare combination of excellent communications, attention to detail, creativity and patience.”

- Richard and Catherine Frinier

“Cristal really breaks the mold. She knows every nook and cranny of this real estate market, understands value, and follows up on everything, all the time. She was incredibly patient with our two year quest to find the perfect house. Every house hunting trip from across the country was well planned, and our time was never wasted. On top of her professionalism and expertise, she is delightful to spend time with. We are thrilled with the home we purchased, and grateful to Cristal for so wisely advising us through this process, right through to the close and beyond.”

- Laurie Siegel

“We met Cristal first in the course of renting a winter home (for three years), then buying a house using her as our agent. She was amazingly good at listening to our wants and showing us homes that fit our needs. Her mastery of the paperwork was perfect. Most importantly, there was never a situation where we doubted her straightforwardness or integrity. If we do another real estate transaction in Montecito (which I doubt, we’re happy with what we purchased), without question we’d use Cristal again.”

- Ken Saffir

“Susan and I just want to thank you for your efforts in the sale of our home. You are really quite amazing. Your competence, persistence, optimism and humor made the entire process effortless. Every problem that arose, you somehow fixed; any obstacle, you overcame. We have bought and sold many homes. It has never been such a painless and enjoyable process!”

- Michael & Susan Marquart

“A little something about “our” realtor, Cristal Clarke. My wife and I came to Santa Barbara about fifteen years ago looking for a seasonal home from which to enjoy the weather and amenities of the central coast. Being in the real estate business myself I was familiar with agents and brokers so entered the market with open eyes. We “flipped” a few houses in the early years, dealing with various agents and finally ended up in Montecito. That’s when good fortune put us together with Cristal. To say we were impressed is to put it mildly. Cristal really knows the market. She is familiar with the area, its history and trends. When we have questions about a particular property she either has the answers immediately or gets back to us by phone or email. There is no waiting or wondering with Cristal. She is an agent who is “on top of it.” Her recommendations as to price points, contractors, inspectors and title agents have proven to be exceptional, showing great insight and the highest professional standards. We consider ourselves exceedingly fortunate to say that Cristal Clarke is our realtor and would recommend her services to any serious buyer or seller.”

- Rob & Judi Kelch