Everything Palm Desert Residents Need To Know About Estate Planning

If you pass away with no estate plan, a California court decides what happens to everything you own. That includes your house, your money, your belongings, even your minor children—all of it. The process is slow, expensive, and public. And your family has no say.

An estate plan puts you in charge of that instead of a judge. That's really what it comes down to.

What is An Estate? 

An estate is everything you own. From your car to your social media accounts to your pets, everything you have is your estate. 

What Does Estate Planning Do?

When you die, someone has to figure out what happens to your estate and where your assets go. Estate planning is just deciding that ahead of time while you’re healthy and level-headed.

It also covers what happens if you're not dead, but you can't make decisions for yourself anymore, due to an accident, medical emergency, rapid dementia, a stroke, etc. Estate planning handles that too.

Why You Can’t Skip Having an Estate Plan

When someone dies in California without a plan, their estate goes through something called probate. It's a court process where a judge oversees the distribution of everything you owned.

The problem is that California probate is one of the worst in the country. It typically takes one to two years. The legal fees alone (set by state law) can eat up 4 to 7 percent of everything you own. And it all becomes public record, meaning anyone can look up what you had and who got it.

If you’re concerned about probate, there’s one tool that can bypass it completely. It’s called a revocable living trust.

A Revocable Living Trust

A revocable living trust is a legal document that holds your assets in a structure that passes everything directly to your family when you die, with no court involved. It works by you legally transferring your ownership over to the trust itself.

While you're alive, nothing changes. You still own and control everything. You can buy and sell property, spend your money, change your mind about who inherits assets after your death. The trust doesn't limit you in any way.

When you die, your assets go straight to the people you named without any probate or court involvement. 

A Last Will and Testament

Most people assume a revocable living trust replaces a will. It doesn't. You still need one because no matter how carefully you set up your trust, there's a good chance something gets left out. A will catches all of it and directs it into the trust automatically. But the bigger reason to have a will—especially if you have kids—is that it's the only place you can legally name a guardian for your minor children. If something happens to you and there's no will, a judge decides who raises them. That judge doesn't know your family, your relationships, or your wishes. A will makes sure that decision stays yours.

A Durable Power of Attorney

This document names someone to manage your finances and legal matters in the event you're alive but unable to handle things yourself, such as after a stroke, a serious accident, or a medical procedure that leaves you incapacitated for weeks. The person you name can pay your mortgage, manage your investment accounts, file your taxes, and deal with your bank. Without this document, none of that is possible without a court order. Your family would have to petition a judge for something called a conservatorship just to keep your bills paid. That process can take months and costs money you'd rather keep. A power of attorney prevents all of it with a single document signed while you're healthy.

An Advanced Healthcare Directive

It does two things. First, it names a health care agent—someone you trust to talk to your doctors, ask questions, and make treatment decisions on your behalf if you're unable to. Second, it records your actual wishes: whether you want aggressive life-saving measures in a terminal situation, whether you want to be kept on a ventilator, or whether you want artificial nutrition. These are hard questions, but they're much harder when your family is standing in a hospital hallway trying to guess what you would have wanted. This document takes that load off them and makes sure your doctors know exactly what you want.

The California Property Tax Rule

Since 1978, a California law called Proposition 13 has capped how much your property taxes can increase each year. As long as you own your home, your tax bill can only go up about 2% annually, no matter how much the home's value rises. If you bought your Palm Desert home in 1995 for $250,000, you're likely still paying taxes based on something close to that original price, even if the home is worth $900,000 today. That difference can save you thousands of dollars every single year.

The problem is what happens when you die, and the home passes to your kids.

A lot of homeowners assume their children will inherit that low tax rate along with the house. But a 2021 law called Proposition 19 changed that. Under Proposition 19, if your child doesn't move into your home and make it their primary residence within one year of inheriting it, the property gets fully reassessed at today's market value. A home you've been paying $3,000 a year in property taxes on could suddenly cost your child $9,000 or $10,000 a year, every year, permanently. And for vacation homes, rental properties, or any real estate beyond your primary residence, there's no exception at all. Those are automatically reassessed the moment they transfer, no matter what.

For many Palm Desert families, where adult children often live in Los Angeles, out of state, or abroad, this is a serious issue. The good news is that there are ways to plan around it. 

Spousal planning. Proposition 19 doesn't apply between spouses—a surviving spouse inherits property with no reassessment at all. So for married couples, the tax issue only kicks in when the second spouse dies and the home passes to the kids. That gives couples more runway to plan, and it's worth using that time.

Irrevocable trusts. An irrevocable trust is different from the revocable living trust described earlier. When you transfer a property into an irrevocable trust and structure it carefully, the property may pass to your heirs in a way that preserves some or all of the low tax base. The tradeoff is that you give up direct control of the asset—you can't simply take it back or change your mind. 

Selling instead of inheriting. Sometimes the math actually favors selling the property while you're alive, paying whatever capital gains taxes apply, and leaving your kids cash instead of real estate. They avoid the reassessment problem entirely. Whether this makes sense depends on how much equity is in the home, your overall tax situation, and what your kids actually want—but it's an option worth running the numbers on.

We hope this article was of use to you. If you have further questions or would like to talk to an estate planning attorney, feel free to contact us!