Don’t let the phrase fool you, as this isn’t a service reserved just for older or wealthier California residents. In fact, we believe that families and individuals with smaller asset portfolios have more to lose when they don’t plan for the future. If you have children under the age of 18, a home, and/or titled assets (bank accounts, brokerage accounts) valued over $150,000, you should be talking with an estate planner. Below is a brief explanation of the most common estate planning documents that we draft on behalf of our clients, either as a complete package or individually, depending on our client’s respective needs.
The State of California has a fairly invasive and expensive mandatory court proceeding, called Probate, that is required for changing title to and distributing assets. However, if a person dies and their assets are owned by a trust, the process of probate may be avoided and assets can be distributed by way of a trust administration.
Avoidance of probate is just one of the many benefits that may be gained by establishing a trust. Setting up either a revocable or irrevocable trust provides you with the ability to provide for yourself and your family should you become incapacitated, strategize to minimize tax liability (if applicable), and declare your wishes as to distribution of assets upon your death. The guideline that we give our clients for determining whether a trust is necessary is if they own a house or own titled assets (bank accounts, brokerage accounts) valued at over $150,000.
Typically, most of our clients gain the most benefit from a revocable living trust, in conjunction with a pourover will, and Power of Attorney documents for both medical and financial decision making.
More information on Trusts ⇢
For clients with assets below the probate guidelines ($150,000 total asset value OR $50,000 for real property), we recommend a will. For clients with children under the age of 18, guardians may be appointed within this document as well as directives given for the use of any proceeds from retirement accounts or life insurance policies for the care of minor children. For other clients, a will can accurately reflect their final wishes as to the distribution of remaining assets as well as the disposition of remains.
More information on Wills ⇢
Power of Attorney
Regardless of asset portfolio or familial situations, at a minimum, every person should have Power of Attorney documents in place granting both financial and medical decision-making powers should that person become incapacitated. These documents are only valid during a person’s lifetime and are incredibly useful in granting family members and loved ones the ability to ensure that, upon incapacity, all financial and medical matters are addressed.
From managing day-to-day financial tasks, such as paying bills and transferring funds within accounts, to buying or selling property, a valid Durable Power of Attorney Financial can be critical upon the incapacity of an individual. Without this document granting authority to your “Agent”, most financial institutions will not allow anybody to access your accounts on your behalf. This can mean that, in the face of incapacity, funds that would otherwise be available for your care are essentially frozen without further court involvement. However, with a Power of Attorney, life as you knew it prior to any incapacity can proceed with little to no interruption until you are able to resume control.
The medical Power of Attorney usually accompanies an Advanced Health Care Directive, within which your wishes as to the administration of life sustaining procedures and medical treatment are clearly expressed. With an Advanced Health Care Directive, you have peace of mind that your family and loved ones won’t have to make those tough decisions (and won’t be able to deviate from your wishes). Even if life support is not at issue, upon your incapacitation, your “Agent” for medical decision making will be able to speak with your doctors, advise as to the administration of any procedures, treatments, and medicines until your capacity is restored.
Business Succession Planning
A business succession plan ranges in complexity depending on the nature of your business, type of business entity, and what your vision for the future may be. Regardless of these factors, all business owners should have a outline as to what they want to happen to the business upon their possible retirement, incapacitation, or death.
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