Will, Trusts, & Estate Planning
When it comes to estate planning, the firm offers a number of services for individuals who are concerned about their estate. We carefully explain and recommend different options for our clients. Some individuals do not need any estate planning while others require a lot of attention. Below are the common estate planning components:
- Consultations. For some folks, all they need is a consultation. Estate planning is a choice and informed decision is sufficient for some, even though not recommended. Some people don’t have any assets and with existing lifestyle, will never have any. Regardless, everyone needs to assess their assets and make an informed decision.
- Revocable Trust. A revocable trust is a testamentary instrument used to transfer assets from the settlor (the original party) to the trustee (the trusted individual), for the benefit of the beneficiaries (the heirs). Trusts can be revocable, irrevocable, special needs, disclaimer, simple, and many other shapes and sizes – all depending on the individual with assets. Revocable trusts are used as alternatives to traditional wills. They transfer ownership during the lifetime and avoid large probate expenses that accompany traditional wills.
- Transfers of Personal, Real, and Business Property. Upon creation of a trust, assets need to be transferred. Personal property is transferred via general assignment. Real property is transferred via Trust Transfer Deed. Business is transferred by retitling and stock ownership change. In addition, stocks, bonds, mutual funds, bank accounts, life insurance policies, vehicles, and other ownership interest could be transferred into the trust.
- Will and Pour-Over Will. A will is a testamentary instrument used to transfer assets to an heir. A pour-over will is a safety net that is used to transfer assets otherwise not transferred via trust.
- Durable Power of Attorney. A durable power of attorney authorizes someone else (called an agent) to handle certain financial affairs either immediately or upon your incapacitation. These instruments are very important for folks whose health condition is declining. We strongly advise all of our estate planning clients to have a durable power of attorney, regardless of their age. We just simply don’t know what will happen to us.
- Advance Health Care Directive. An advance health care directive authorizes someone else (called an agent) to handle medical affairs either immediately or upon incapacitation. It is important for folks who cannot take care of themselves or are no longer understand what is going on. We strongly advise all of our estate planning clients to have a health care directive, regardless of their age. We just simply don’t know what will happen to us.
- HIPAA Waiver. A HIPAA waiver is a document that allows another individual (an agent) to obtain certain medical records on your behalf. This is necessary for situations where the client may not be able to grant such consent (unconscious, vegetative state, etc.). We strongly advise our clients to have such waiver, regardless of their age.
- Final Disposition Instructions. Final disposition instructions are instructions that document your wishes concerning your funeral. It contains specific wishes on how your funeral would take place, the cremation details, or other very specific wishes. Most folks just indicate their preference whether to be buried or cremated while others just elect to omit having those instructions.
- Change of Ownership. Change of ownership in context of estate planning is paramount. It is the reason people engage us. Estate planning provides a solution for the most efficient transfer of assets upon death. It can be during the client’s lifetime (via trust or deed) or after death (via will). Whether folks like or not, change of ownership will occur after death and it is better to plan rather than leaving it to the probate proceedings.
- Disputes. Disputes in context of estate planning typically occur after the client passes. Beneficiaries frequently want a larger portion of the estate, or they dispute certain action by an executor or a trustee. We draft our estate plans in disputes in mind, with an attempt to reduce friction and reduce the legal costs if any. Individuals especially need estate planning if their children are contentious and will most likely fight after you pass.
- Capacity. Capacity is the person’s ability to understand the nature of the documents they are signing. This is especially relevant for folks who are older and who start development memory issues. For some, it is too late since they are no longer aware of where they are and why. As such, it is important to plan ahead.
FAQs
If I do not have any property, do I need estate planning?
Yes. At least get a consultation. There are certain things you should know about as you obtain assets.
I don’t need estate planning, I just need a will. Can you do it?
Drafting a will is part of estate planning. Estate planning is an analysis of your assets in order to transfer them efficiently.
What is the major difference between a will and a trust?
A will transfers assets after death while a trust transfers assets during your lifetime.
When is a trust preferred over a will?
When you have trust, it is transferred to a trustee (usually yourself) and regain full control. A will usually kicks in after death and cannot control certain elements of your estate.
When is a will preferred over a trust?
In certain circumstances a will may be preferred. Speak to our firm to learn more.
What if my trust does not have anything in it?
A trust cannot exist without property. You cannot simply give nothing to a friend to hold on to something. A trust is a relationship between two parties to hold assets. So, without assets, the trust does not exist.
Do I need to transfer everything into my trust?
Not necessarily. We advise to transfer everything that is subject to probate. This will reduce legal fees and expenses.
Do I need a lawyer for my estate planning?
Yes. A qualified lawyer provides competent advise with respect to what approach to take. Sometimes, a non-lawyer may potentially draft a will but not understand the interrelationship of different elements nor provide an analysis of a specific approach.
Why do I need a durable power of attorney?
Yes. Since we do not know what can happen to us, it is advisable to have an agent communicate your wishes when otherwise you cannot.
Do I need a health care directive?
Yes. Since we do not know what can happen to us, it is advisable to have an agent communicate your wishes when otherwise you cannot.
Can I just add my son or daughter to my deed?
You may but it is highly risky. Once added, the child becomes part-owner of your property and can initial legal action to partition (separate) the property. As such, transfer by deed is used only in certain narrow circumstances.
What if my children will most likely kill each other over my estate?
That’s why you need an estate plan to address the distribution of assets as well as address any potential dispute.
What if I don’t care about my estate?
Not caring about your estate is a form of estate planning. You see, if you don’t do anything, California has and estate plan for you. As such, when you pass, the estate will be distributed pursuant to California probate laws.
What if my mother is no longer aware? Can she still sign her estate plan?
Your mother may be lacking capacity to enter into an agreement. Even though you can make her sign something, since she did not have legal capacity to sign in the first place, the courts may invalidate what she signed. This depends on the specific situation, and we need more facts to answer this question. One thing we know for sure, the sooner your planning is, the better.