Although estate planning is very personal, and requires a detailed understanding of your intent, there are four critical documents that every California estate plan should have, particularly if you want your heirs to avoid probate or costly litigation.
Your will serves as the ultimate guidebook on who will receive the assets of your estate. A will is the most basic form of estate planning. Generally speaking, everyone should have a will.
A will identifies the “executor”, the individual who oversees the probate process, and actually distributes the assets. The executor should be prepared to represent your wishes to the court, seek to be appointed the administrator of your estate, and obtain the Letters of Testamentary. These Letters authorize the administrator to access bank accounts, change title to property, and distribute assets according to your wishes.
Wills are notoriously creatures of statute, and each state has specific requirements for creating a valid and enforceable will, and especially in amending and/or destroying a will. As always, you should consult an experienced estate planning attorney to discuss the nuances of a California will, and how to avoid probate.
Unlike a regular will, a living will provides written legal instructions about your preferred end-of-life health care decisions. This type of document is also called an advance medical directive.
A living will can specify your preferences regarding CPR, mechanical ventilation, tube feeding, dialysis, comfort care (palliative care), organ and tissue donations, and can even outline when you would prefer a “do not resuscitate” order to be in place. COVID has brought the importance of this estate planning document to the forefront of many individuals minds. As an estate planning attorney will tell you, you can never be too prepared. Additionally, this type of will takes the decision-making burden off your family or loved ones.
Living wills must comply with all statutory requirements, and each state has different forms and requirements. To discuss how a living will in California should look to avoid litigation down the road, speak with our skilled attorneys.
Durable Power of Attorney
A general power of attorney authorizes someone else to manage your affairs, including your finances or health care. A general power of attorney is terminated by operation of law, if you become incapacitated. A durable power of attorney remains in effect even if you become incapacitated. How do you know which one is right for you? Your legal counsel will go over the pros and cons as they relate to your situation.
The purpose of a durable power of attorney is to plan for cognitive decline later in life, accidents, or other situations in which you may no longer be capable of making decisions. A durable power of attorney may take effect immediately or can be “springing” taking effect only upon a specific occurrence, i.e., incapacity.
A durable power of attorney is different from a living will, or advance medical directive, in that it names someone to make medical decisions any time you are unable to do it yourself, even if you are expected to make a full recovery. Durable powers of attorney are a powerful tool when used properly.
A trust is created by a settlor, who decides how to transfer his assets to a trustee. The trustee holds the assets for the beneficiaries of the trust. While alive, the settlor may serve as the trustee, and upon the their passing, the successor trustee steps in to distribute the assets to the beneficiaries.
A trust can be used to determine how to manage the assets and/or distributed while the settlor is alive, or after their death. Once thought to be associated with only the very rich, trusts are now more commonly used for a variety of purposes to achieve specific goals for individuals of all income levels. For example, they can be used to avoid taxes and probate, to protect assets from creditors, or to protect assets for an underage and/or mentally challenged beneficiary.
There are several unique categories of trusts and every state has specific requirements for creating an enforceable trust.
As a firm that handles estate litigation issues, we see on a regular basis the issues associated with improperly drafted estate planning documents. Probate, litigation, and in-fighting between families members to name a few. Many families can avoid this headache with a will or trust that has been prepared by experienced legal counsel who understands the ins and outs of their wants, needs, and personal situation.