There are often many questions about Estate Planning and the various components which often make up your Estate Plan. What is it? Do I need to do it? Why is it important to me? Is it important to my family.
Below are some of the common questions about Estate Planning to hopefully answer some of your questions.
Also, you may call my office and set up an free consultation appointment to discuss any Estate Planning needs that you may have.
WHAT IS ESTATE PLANNING AND DO I NEED TO DO IT?
Estate planning is a process. It involves people—your family, other individuals and, in many cases, charitable organizations of your choice. It also involves your assets (your property) and the various forms of ownership and title that those assets may take. And it addresses your future needs in case you ever become unable to care for yourself.
Through estate planning, you can determine:
- How and by whom your assets will be managed for your benefit during your lifetime if you ever become unable to manage them yourself.
- When and under what circumstances it makes sense to distribute your assets during your lifetime.
- How and to whom your assets will be distributed after your death.
- How and by whom your personal care will be managed and how health care decisions will be made during your lifetime if you become unable to care for yourself.
For more detailed information about Estate Planning, visit the following like to the California State Bar about Estate Planning.
WHY IS A DURABLE POWER OF ATTORNEY IMPORTANT?
A durable power of attorney for property management is a legal document that provides instructions on how to handle limited financial transactions and to deal with assets if you become incapacitated. By doing this, you designate an agent or attorney-in-fact to make financial decisions and manage your assets on your behalf if you become unable to do so.
In addition, this legal document with an Advanced Health Care Directive can contain your wishes concerning such matters as life-sustaining treatment and other health care issues and instructions concerning organ donation, disposition of remains and your funeral.
If you have not made any such arrangements in advance and you become unable to make sound decisions or care for yourself, a court could appoint a court-supervised conservator to manage your affairs and be responsible for your care.
The court’s supervision of the conservator may provide you with some added safeguards. However, conservatorships can also be more cumbersome, expensive and time-consuming than the appointment of attorneys-in-fact under powers of attorney.
Even if you appoint attorneys-in-fact who could manage your assets and make future health care decisions for you, you should still document your choice of conservators in case a conservatorship is ever necessary.
WHAT IS AN ADVANCED HEALTH CARE DIRECTIVE?
Developments in medicine are increasing the need for people to have a special durable power of attorney which we refer to as an Advanced Health Care Directive or AHCD. This need is far greater today than even a decade ago.
Better access to health care and advanced medicine allow people to live longer lives today than in previous years. Unfortunately, longer lifespans are often fraught with physical and mental conditions that cause people to be incapacitated for longer periods of time. Further, people are increasingly being kept alive in these incapacitated states today that would have been fatal in the past, which raises further issues. As a result, there is an increasing need for people to have versatility in deciding how their agents make decisions for them due to the likelihood of becoming incapacitated.
WHAT IS A WILL AND DO I NEED ONE?
A will is a legal document in which you give certain instructions to be carried out after your death. For example, you may direct the distribution of your assets (your money and property), and give your choice of guardians for your children. It becomes irrevocable when you die. In your will, you can name:
- Your beneficiaries. You may name beneficiaries (family members, friends, spouse, domestic partner or charitable organizations, for example) to receive your assets according to the instructions in your will. You may list specific gifts, such as jewelry or a certain sum of money, to certain beneficiaries, and you should direct what should be done with all remaining assets (any assets that your will does not dispose of by specific gift).
- A guardian for your minor children. You may nominate a person to be responsible for your child’s personal care if you and your spouse die before the child turns 18. You may also name a guardian-who may or may not be the same person-to be responsible for managing any assets given to the child, until he or she is 18 years old.
- An executor. You may nominate a person or institution to collect and manage your assets, pay any debts, expenses and taxes that might be due, and then, with the court’s approval, distribute your assets to your beneficiaries according to the instructions in your will. Your executor serves a very important role and has significant responsibilities. It can be a time-consuming job. You should choose your executor carefully.
WHAT IS A TRUST AND DO I REALLY NEED ONE?
A Trust is a legal document that can, in some cases, partially substitute for a will. With a revocable living trust, your assets are put into the trust, administered for your benefit during your lifetime and transferred to your beneficiaries when you die—all without the need for court involvement.
Most people name themselves as the trustee in charge of managing their living trust’s assets. By naming yourself as trustee, you can remain in control of the assets during your lifetime. In addition, you can revoke or change any terms of the trust at any time as long as you are still competent. (The terms of the trust become irrevocable when you die.)
In your Trust, you will also name a successor trustee (a person or institution) who will take over as the trustee and manage the trust’s assets if you should ever become unable to do so. Your successor trustee would also take over the management and distribution of your assets when you die.
A living trust does not, however, remove all need for a will. Generally, you would still need a will—known as a pour over will—to cover any assets that have not been transferred to the trust.
You should consult with a qualified estate planning lawyer to assist you in the preparation of a living trust, your will and other estate planning documents. Also, keep in mind that your choice of trustees is extremely important. That trustee’s management of your living trust assets will not be automatically subject to direct court supervision.
For more detailed information, see the State Bar pamphlet Do I Need a Living Trust?
WHAT IF I’M NOT SURE IF I NEED ANY OF THESE DOCUMENTS?
After reading all of the above questions and you still are not sure if you need to do anything regarding Estate Planning, what should you do?
Call my office and set up an appointment where you or you and your spouse, and I can talk about Estate Planning so that I can answer your questions to help you decide if you need some Estate Planning for yourself and your families benefit.
I am happy to provide you with a free consultation regarding your Estate Planning needs.