Estate Planning

Estate planning is planning for the future. It is a mechanism for you to make important decisions about yourself, your loved ones, and your financial affairs instead of leaving those decisions to someone else or the court. An estate plan should accomplish three key goals: (1) Ensure that your property and assets are distributed to the people or entities that you choose; (2) Minimize or eliminate estate taxes, court interference, and the costs associated with probate; and (3) Prevent others from interfering with your estate planning decisions.

Many people mistakenly believe that only wealthy individuals need an estate plan. This is not true. If you own property, have minor children, or have a desire to ensure that your loved ones and financial affairs are taken care of, then you probably need an estate plan. If you do not properly plan your estate, a court-appointed individual will make decisions on your behalf if you become incapacitated, and the law will determine how and to whom your property and assets will be distributed upon death.

For most people, an estate plan consists of the following documents: revocable living trust; pour-over will, durable power of attorney for health care and advance directive; and durable power of attorney for property management.

Revocable Living Trust

A revocable living trust is a legal document that allows you to direct how you want your assets to be distributed at death while allowing you to maintain control of those assets during your lifetime. A revocable living trust also facilitates the management of gifts to minors or dependents with special needs without court intervention. With a living trust, when you pass away, your assets automatically and quickly transfer to your beneficiaries without going through the time consuming and expensive probate court system. During your lifetime, you can add to the living trust or revoke it entirely if you wish.

“Pour-Over” Will

A “pour-over” will is a legal document that works in conjunction with a revocable living trust. If you unintentionally neglect to add certain assets to your living trust, a “pour-over” will add these assets to the trust at your death. A “pour-over” will does not prevent the need for probate of those assets added to the living trust at the time of your death. However, it does allow them to be distributed according to the terms of the living trust and circumvents the need for the State of California to intervene to determine how the assets should be distributed.

Durable Power of Attorney for Healthcare/Advance Directive

A durable power of attorney for healthcare is a legal document that gives someone else the authority to make health care decisions in the event you become incapacitated. An advance directive, also known as a “living will,” is a legal document in which you set forth your wishes regarding life prolonging medical treatment. A living will should not be confused with a living trust, which is used for holding and distributing your assets.

Durable Power of Attorney for Property Management

A durable power of attorney for property management is a legal document that allows you to designate an attorney-in-fact, or agent, to manage all of your business and financial affairs. This power of attorney avoids costly court-supervised conservatorship in the event you become incapacitated.