Estate Planning allows an individual or family to consider their current circumstances and to proactively plan for numerous lifetime contingencies and eventual death (we’re all going to die – someday). A comprehensive estate plan will identify people you trust who can deal with your property or person when needed. It will also provide or consider:

• a framework for your care and financial affairs if you become incapacitated;
• disability income, long-term care funding, and life insurance;
• the succession or transfer of your business at your retirement, disability, incapacity, or death;
• a guardian for your minor children’s care or a conservator for you (if required);
• family members with special needs without disqualifying them from government benefits;
• children of a prior marriage;
• loved ones who might be irresponsible with money or who may need protection from creditors or in the event of divorce;
• taxes – the effect of various transfers on death, income, gift, and property taxes;
• retirement accounts;
• ultimate distribution of your property to your spouse, descendants, pets, charities, or anyone else; and
• avoiding or minimizing court costs, and legal fees typically associated with Probate.

Estate planning is for everyone – not just the elderly or wealthy Hollywood celebrities. When you’re young, the probability of unexpected incapacity or death is minuscule. However, without some planning, the impact of your sudden disappearance could be catastrophic to your family. You need the peace of mind knowing that your minor children will be brought up by those you choose and the money you leave will be spent on your children so you would have done had you survived.

Probate in California is a court proceeding (i.e., before a judge) which can be time consuming, frustrating, and costly. It can be easily avoided by creating and funding a trust. Further, a trust is confidential whereas a Probate proceeding is public.

Incapacity can happen to you, and you must prepare for it. The primary documents that allow your trusted friends or family to care for you are the Power of Attorney for finances, the Advance Health Care Directive and the HIPAA Authorization.

Typical documents in an estate plan include a revocable trust, will, durable power of attorney, advanced healthcare directive, HIPAA release.

Almost always I recommend a revocable living trust as the nucleus of the estate plan. While there is a lot of common or boilerplate provisions in a trust to address a myriad of potential issues, the essential part is leaving your estate to selected beneficiaries according to your wishes. Each client has unique needs, and the dispositive provision is where we can be creative in addressing your requirements. Also, but no less important is who and how this will be managed by successor trustees.

While the revocable trust is the centerpiece of your estate plan, you need additional documents to address your potential incapacity – i.e., power of attorney for finances, the advance healthcare directive and the HIPAA authorization.

As for your finances, the revocable trust and power of attorney are complimentary. Your successor trustee handles property inside the trust, your agent under the power of attorney handles everything outside the trust. Your trustee and healthcare agent will coordinate to get you the optimal housing and support.

The advance healthcare directive and the HIPAA authorization are also critical in your estate plan. You need to designate who you want to be to make health care decisions for you if you cannot make those decisions yourself. The HIPAA Authorization gives your health care agents, successor trustees, attorney and family the ability to talk to healthcare providers to determine what medical problems you may have and your competence. When problems arise, your close acquaintances are going to help you and they need to understand your condition and prognosis.