Estate Planning is often believed to be necessary for only those who have a lot of wealth. However, this is a common misconception. In fact all individuals and families will benefit from having an estate plan in place.
Estate planning prepares not only for death, but for incapacity. It protects your loved ones, and ensures they know what your wishes are if you cannot communicate them yourself, or upon your death. Estate planning documents may include a Trust, Will, and other essential documents for the management of your finances and health if you are incapacitated.
What is Estate Planning?
Estate planning is a process allowing you to arrange how you want your assets to be managed and distributed upon your death. Sometimes, if you have limited assets, limited beneficiaries, and limited instructions on how to distribute your assets to the beneficiaries, planning is pretty straightforward. On the other hand, the more assets, the more beneficiaries, and the more instructions may require an estate plan that is more complex and varied.
Generally, there are two components of estate planning with one involving the legal aspects of it and the other involving the non-legal aspects of the plan. Your estate planning attorney can help with both. Legally speaking, your lawyer will review your personal and financial situation and create documents that address the latter. Non-legally speaking, your lawyer will develop an investment strategy for retirement purposes.
Wills
A will is a legal document that sets forth your wishes for distribution of your property, who you would like to nominate as the executor of your estate, and to nominate a guardian for the care of your minor children upon your death. Wills must be executed in a specific way to ensure their validity.
If you have a will and your assets are not titled into a trust, and your estate is over $184,500.00, your executor will have to initiate a formal probate proceeding.
Revocable Living Trusts
A trust is a fiduciary relationship with respect to property that is held in the trust. A revocable living trust holds assets that will distributed to your named beneficiaries upon your death. All assets that are held in the trust are titled into the trustee's name. The person who makes the trust, also called the trustmaker, will have full control of the assets held in the trust during their lifetime. You may choose to sell, encumber, or transfer the property held in trust.
The benefits of a trust, aside from the trustmaker retaining control, is that a trust is private, and is not subject to probate. Probate can be time consuming, and expensive. With a trust, assets pass from the trustee to the beneficiary without court intervention with a process called trust administration.
Powers of Attorney
California law allows individuals to execute a power of attorney, which appoints an agent to manage financial affairs during incapacity. This will allow the agent to handle your finances, and any other powers that you consent to, which will be specified in the power of attorney. The types of powers that can be handled by your agent are numerous but may include:
- Management and/or maintenance of real or personal property;
- Stock and bond transactions;
- Banking;
- Legal matters;
- Apply for government benefits on your behalf.
The powers that may be granted to an agent will vary, and can be broad or more limited to fulfill the specific needs of the your family.
Health Care Directives
California law allows individuals to use health care directives made in advance. These documents allow your loved ones to know what your wishes if you cannot communicate them for yourself. These documents give you the power to:
- Appoint an agent, multiple agents, or co-agents to make health care decisions on your behalf if you are incapacitated or otherwise unable to make decisions for yourself; and
- Set forth instructions and preferences in regard to health care and treatment during incapacity.
Health care directives allow you to specify the level of treatment desired during incapacity, preferences for personal care and social interaction, preferences for organ donation at death, CPR and pain medication preferences.
Consult a California Estate Planning Attorney
Estate planning options are vast and need to account for your assets, as well as your financial and medical wishes prior to your death. Attorney Jessica Ward is prepared to counsel you to obtain the best plan for your unique family situation. Contact the Law Office of Jessica R. Ward at (925) 459-1777 to schedule a complimentary 30 Minute Consultation.