An estate is everything that you own: your car, home, your business, personal possessions, and more. If you have assets over $150,000 you need an estate plan to protect yourself and your finances during your lifetime, and to distribute your assets to your loved ones after your death. I work closely with my clients to help them recognize their specific goals in estate planning and create a customized and reliable estate plan that advances their unique needs.
A well-drafted comprehensive Estate Plan includes instructions for your care if you become disabled or incapacitated; names a guardian to care for your minor children; minimizes taxes, court costs, and unnecessary legal fees; provides for family members with special needs without disrupting government benefits; enables the successful transfer of your assets to your loved ones at your retirement, disability or death; and most importantly, allows you to bypass a very lengthy and expensive judicial process called Probate.
Your Complete Estate Plan will include the following documents: Trust, Will, Financial Power of Attorney, Advance Healthcare Directive, HIPPA Authorization, and other ancillary documents.
A revocable living trust is written document which places your assets into a trust to be used for your benefit during your lifetime, and, at your death, transfers your assets to your designated beneficiaries. A revocable living trust covers three phases of your life: your lifetime, possible incapacitation and what happens after your death. The primary purpose of a trust is to avoid a very lengthy and expensive process of Probate. You can revoke and amend your revocable living trust whenever you wish to do so. Thus, a revocable living trust helps you:
- avoid the costs and delays of probate;
- control assets during your life should you become incapacitated;
- control out-of-state as well as in-state property;
- minimize taxes and expenses;
- keep your affairs confidential – as opposed to probate, which is a matter of public record.
An irrevocable trust is a trust that cannot be modified or terminated by the grantor. This is distinguished from a revocable trust, which is commonly used in estate planning and allows the grantor to change the terms of the trust and/or take the property back at any time.
protect assets from creditors, and provide for family members who are minors, financially irresponsible, or who have special needs.
The main reasons for setting up an irrevocable trust are for estate and tax considerations. The benefit of this type of trust for estate assets is that it removes all incidents of ownership, effectively removing the trust’s assets from the grantor’s taxable estate. It also relieves the grantor of the tax liability on the income the assets generate. An irrevocable Trust also allows to protect assets from creditors, and provide for family members who are minors, financially irresponsible, or who have special needs.
Supplemental needs trusts (also known as “special needs” trusts) allow a disabled beneficiary, who currently receives or Supplemental Security Income (SSI) and/or Medi-Cal, to receive gifts, inheritance, lawsuit settlements, or other funds and yet not lose his or her eligibility for certain government programs. Such trusts are drafted so that the funds will not be considered to belong to the beneficiary in determining her eligibility for public benefits. As their name implies, supplemental needs trusts are designed not to provide basic support, but instead to pay for comforts and luxuries that are not available from public assistance. These trusts typically pay for things like education, recreation, counseling, and medical services not provided by Medicaid.
A Will allows you to leave your property and possessions to the people and organizations you chose. It also allows you to nominate a guardian to care for your minor children after you pass. Unlike a Trust, a Will does not avoid probate. If you only have a Will, but no Trust, your estate will go through probate, the court proceedings through which your assets will be distributed according to your wishes stated in your Will. If you don’t use a will (or trust) to direct who gets what, the probate court decides for you – and the court may give your assets to people who you would not have chosen. A judge could even decide who would care for your minor children.
Because a will does not take effect until you die, it cannot provide for management of your assets if you become incapacitated. That is why it is important to have other estate planning documents that become effective if you should become incapacitated.
A durable financial power of attorney grants someone else (your agent) legal authority to act on your behalf in financial matters in the event that you become incapacitated and are unable to make those decisions
An Advance Healthcare Directive allows you to have legal control over your health care treatment in the event that you are unable to speak for yourself, by doing either of both of the following two things:
- Appoint a health care agent.The AHCD allows you to appoint a health care agent (also known as “Durable Power of Attorney for Health Care” or “attorney-in-fact”), who will have the legal authority to make health care decisions for you if you are no longer able to speak for yourself.
- Prepare instructions for health care. The AHCD allows you to make specific written instructions for your future health care in the event of any situation in which you can no longer speak for yourself. The AHCD replaces the Natural Death Act and is now recognized as the legal format for a living will in the state of California.