ESTATE PLANNING 

Regardless of one's net worth, estate planning is for everyone! If you own any property, are a parent with minor children, or have a child of any age with special needs, you need an estate plan.

An estate plan is a blue print for transferring property in accordance with your wishes. Estate planning is not just about assets or providing an inheritance for your children; it is about you as well. Estate plans can also provide for how you will be taken care of in the event of incapacitation.

A comprehensive estate plan includes the following:

Will: This instrument disposes of and transfers certain property at death. In CA, when the assets to be distributed under a will totals more than $150,000, probate is required. Probate is the legal process for administering and distributing the estate of a deceased person. It is a timely, expensive, court supervised and public process. Once probate of the estate is completed, the executor of your estate distributes your probate assets according to your will.

Revocable living trust: This instrument is created during life and becomes effective immediately once it is funded. It allows for current and continued management and control of your assets and for disposition upon your death. A trustee (e.g., yourself or a trusted designee) manages the property in the trust per your instructions and it exists for the benefit of current beneficiaries (e.g., yourself) and can continue for the benefit of future beneficiaries (e.g., your spouse and children). The creator of a revocable living trust can alter, amend, revoke or terminate it during his or her lifetime. It cannot be changed after death. Property passed through a revocable living trust avoids probate. It is less expensive and potentially less time consuming than probate although there is no court supervision.

Power of Attorney (POA): This document gives a trusted person the ability to make financial and other decisions on your behalf if you become unable to do so. The POA is helpful for avoiding a conservatorship, which is expensive and time consuming. In the event of incapacitation and there is a revocable living trust, a successor trustee will step in and take care of your financial matters. The POA will allow someone to step in and take care of your personal matters (which are distinguishable from your financial matters), such as signing your name on a contract or tax return. Designating an executor in a will is not sufficient for addressing incapacitation, as wills only take effect at death. 

Advanced Health Care Directive: This document can provide an agent of your choosing the discretion to make medical and healthcare decisions on your behalf, or you can set forth the decisions ahead of time and make it the agent’s duty is to enforce those decisions. Such decisions include end of life care and organ donation.

When to review your plan
Estate planning is an ongoing process. Your life changes and often; so should your estate plan. Your estate plan should be evaluated periodically to ensure consistency with your present life circumstances and to incorporate changes in the law. A review is wise following life events such as a birth/adoption, death or divorce. Other changes warranting a review are changed financial circumstances (e.g., new job or retirement) or a second marriage that blends two families. Even if your life is relatively constant, periodically reviewing your plan to make sure it continues to reflect your preferences is wise.