Estate Planning Services

If you have possessions, you have an Estate. The proper management of your assets during your lifetime is financial management. The disposition of your possessions after your death is called estate settlement. Deciding in advance how this will be done is called Estate Planning. It's that simple. 

 

You owe it to yourself and your family to create a well-drafted Estate Plan. Don't get lost in the legal complexities of an estate plan - instead focus on the comfort and welfare that you can bring to your loved ones and peace of mind for yourself. 

While you are planning for the financial needs of loved ones, your primary concern should be your own security and current standard of living. By planning and protecting your assets, you can rest assured that your loved ones will have more direction and less drama to overcome upon your death or incapacity. 

Even more importantly, if you have minor children, then regardless of what and how much you own, it is imperative to nominate guardianship and spell out your wishes for their financial care. Instead of having a court appoint a guardian for your children, wouldn't you want to do so yourself? Or what if your minor children were to inherit assets? Would you want them to get a lump sum distribution when they turn 18 or do you prefer to give them a chance to chase their own dreams before being handed a fortune on a silver plate?

Death may be certain, but the drama and confusion that might ensues doesn't have to be. 

If you have minor children, a house, retirement accounts, and/or are simply worried about how you will be cared for in case of incapacity, let's talk sooner than later!

Revocable / Living Trust

A revocable trust is often referred to as a will-substitute but is generally used together with a simplified will called a pour-over will to: 

  • Avoid or minimize probate

  • Maintain privacy

  • Avoid guardianship during life if you become incapacitated. 

  • Allow for seamless control of your assets during your incapacity and after death. 

 

In California, the person creating their revocable trust (also known as a settlor or grantor) typically serves as the initial trustee of their trust. 

 

A revocable trust can be created by either a single settlor or jointly by two settlors (typically a married couple or registered domestic partners) and can generally be changed or revoked during their lifetime(s).  

 

Assets must be properly transferred to the trust soon after signing (this is often called "trust funding" or "funding a trust"), so the trust can carry out the intended legal effect upon death or incapacity. 

 

At ILS, I aim to maintain regular contact with my clients to remind them to pay ongoing attention to their estate plan as assets are bought and sold. Estate planning does not end when you sign your papers at my office. It is important to continue to manage the trust as your financial portfolio grows or changes with you over the years. 

 

Some common types of revocable trusts that can be either single settlor or joint are:

  • A basic revocable trust.

  • A revocable trust with continuing trust(s) for children - which is often used by younger families with minor children. Couples can distribute their trust remainder to each other on the death of the first to die, and the trusts for children are created at the death of the surviving spouse. 

  • A revocable trust with estate planning - Married couples frequently include a credit shelter trust as either a mandatory trust or an optional trust on the death of the first spouse. A credit shelter trust typically benefits the surviving spouse for life but is not included in the survivor's taxable estate at death. 

  • A trust for pets - Under California law, one can create a trust that provides directly for the care of a specific animal. 

Last Will and Testament

Although revocable trusts are the most common vehicle for estate planning in California, wills are sometimes used as the primary method to transfer assets on a person's death. A person who creates a will is a called a testator and there are strict formalities necessary to create a valid will. 

These formalities include testamentary capacity and procedures for executing/signing a valid will (which vary depending on the type of will).

Even though some property does not pass by will, such as assets held in a revocable or irrevocable trust, property held jointly with right of survivorship, or assets with beneficiary designation, it is still important to create a valid will as part of an estate plan. Sometimes property that you think will pass outside of probate does not pass as intended for a number of reasons. In this case a probate is required and without a will, the property passes by intestacy.

 

Assets that do pass under the will are called probate assets. In addition to typical assets that you may own at death, probate assets may also include refunds issued to the decedent after date of death, such as income tax refunds, overpayments of insurance and other premiums, utility account refunds, and overpayments of monthly rent at assisted living facilities and nursing homes.

 

Even a person who uses a trust as their primary estate planning vehicle should have a pour-over will to provide for assets not transferred to the trust during life. 

Power of Attorney

A Power of Attorney is a legal document that allows you (the principal) to give authority to another person (the agent) to make legal decisions and financial transactions on your behalf.  The agent does not have to be an attorney - just a trusted adult.

A Durable Power of Attorney (DPA) states in the document that your agent will retain legal authority even if the principal loses mental capacity. The standard Power of Attorney becomes effective immediately, giving the agent the ability to manage the principal's money even if the principal still has capacity. 

In some situations, a Springing Durable Power of Attorney is used which becomes effective only upon a designated time, such as when a physician certifies that the principal has lost capacity. 

An agent under a power of attorney should be someone you completely trust, as they will be able to act for you while you are alive (but unable to do so), and their authority ends when the principal dies.

Health Care Directive /
Living Wills

As long as a person is still mentally competent, they can create an Advance Health Care Directive (AHCD). This document allows a competent person to state what type of medical treatment they prefer especially regarding the use of life-sustaining medical treatment, and who they want to speak on their behalf for making health care decisions.

 
The powers given a health care agent (aka attorney-in-fact) under an AHCD can be limited or broad, from the right to access medical records to the power to make anatomical gifts. Specific health care instructions can also be spelled out, such as naming the doctor you'd like to supervise your care, wishes regarding pain medications, organ donation, etc. 

Ethical Will

I encourage all my clients to complete two important Questionnaires before meeting with me: 

  1. a value-based Ethical Will and 

  2. a detailed Family & Asset Form. 

The value-based Ethical Will is a great way to reset your mindset about Estate Planning and lay an intentional foundation for important decisions and instructions. 

An Ethical Will allows you to express your values and ideals for future generations and helps you declutter your thoughts about aging, mortality, and incapacity. 

Once these deeply personal values are clarified, it may become easier to specify how you wish to be cared for in case of incapacity, and the distribution of your assets to your beneficiaries. 

Disclaimer

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.

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