Estate Planning Attorneys

Estate Planning Attorneys

There are many reasons to prepare your estate plan now.  They include:  avoiding probate; nominating a Guardian for your minor children should something happen to you; planning for long-term care costs; nominating a conservator should you become incapacitated; avoiding conservatorship; having a say in who should be in control of you and your assets should you become incapacitated; and having a say in who gets what when you pass away.  Estate planning is appropriate and necessary for most people of all ages.

Understanding the Value of Estate Planning

An Estate Plan should reflect one’s personal desires and goals.  For most people with an estate over $150,000 and/or who own any real estate, the estate plan should include at least:  a revocable living trust; a pour-over will; a durable power of attorney; a healthcare directive; and a HIPAA authorization.  In some cases an irrevocable trust will used instead of a revocable trust.  Those cases usually involve an adult with special needs, Medi-Cal or VA planning goals, or estates with over $5.34 Million.  Following is an explanation of the basics of estate planning.

Essential Aspects of Estate Planning

Avoiding Probate:  Probate is a timely and expensive court process.  The probate process is, simply put, a process in which the court distributes one’s estate after death.  This process is necessary if there: 1) is no estate plan in place or if there is just a will in place and  2) the estate is over $150,000 or the estate owns any real estate.

Probate costs are set forth in the California Probate Code and depend on the size of the estate.  The attorney’s and executor’s fees mirror each other.  Both are:  4% of the first $100,000 of the estate; 3% of the next $100,000; 2% of the next $800,000; and 1% of the next $9,000,000.  As an example, an estate with $500,000 worth of assets would have attorney’s fees of $13,000, plus executor’s fees of $13,000, plus court costs.  In addition, an attorney and/or an executor may request additional fees for extraordinary services provided.

Revocable Living Trust:  A Revocable Living Trust is a legal entity, separate from yourself, that you create to hold title to your property so that when you pass away, property can be distributed according to the terms of the trust without court involvement.  There are three separate roles that are played in a trust (however, all three roles may be filled by the same person):  A Settlor or Grantor is the person who creates the Trust; A Trustee is the person who follows the rules of the Trust and is in charge of distributing the assets of the Trust as outlined in the Trust document; and the Beneficiary (or beneficiaries) is the individual who will benefit from the assets of the Trust.

The Settlor, upon creating the trust, determines who will play the other roles.  Typically, the Settlor appointments himself as Trustee during his lifetime for as long as he is competent and capable of making decisions.  The Settlor will also usually make himself a beneficiary of his own trust during his lifetime.  The “death” beneficiaries will be those individuals to whom the assets of the trust will be distributed upon the Settlor’s death.  The Settlor has the authority, when creating the trust, to say “how” those death beneficiaries will receive their distribution (i.e. in trust for their life, outright, etc.).

Administration of the Trust:  Upon the death of the Settlor, a Trust is administered by the successor Trustee.  The Successor Trustee must follow the rules of the Trust established by the Settlor and must also give notices pursuant to California law.  In many cases the successor Trustee will seek legal counsel to assist in administering the Trust in order to make sure that all applicable laws are followed.

A Pour-Over Will:  A Trust holds only what is “put” into it.  Sometimes, assets will get left out of the trust inadvertently.  The Pour-Over will allows the successor Trustee to “pour” these assets back into the Trust and distribute them pursuant to the terms of the Trust.

Durable Power of Attorney:  A Power of Attorney is a legal document that gives a named agent authority to take certain actions.  A Durable power of attorney is one that continues in effect even after the Principal (the person granting authority to the agent) becomes incapacitated.  A Durable Power of Attorney can be limited in scope or be very broad.  It is imperative that one have a Durable Power of Attorney in order to prevent conservatorship proceedings if one becomes incapacitated.

Advance Health Care Directive:  An Advance Health Care Directive consists of several parts.  First, the Advance Health Care Directive can be used to designate a Health Care Agent.  The Agent is a person designated to make health care decisions on one’s behalf in the event of incapacity.  Part II of the Advance Health Care Directive may include “Instructions for Health Care.”  This portion has to do with the “End-Of-Life” decisions and involves one’s decisions regarding prolongation of life by artificial means, relief from pain and other wishes.  Part III of the Directive is optional and reflects one’s decisions regarding donation of organs, tissue and other body parts.  Part IV involves the designation of one’s primary care physician. This document is also vital in avoiding conservatorship proceeding should one become incapacitated.

HIPAA Authorization:  This document grants authority to named individuals to access one’s medical records.

For more information about the Estate Planning with the attorneys of Lanzone Morgan, LLP, give us a call at 1-888-887-9777 today.

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