CA Estate Planning Blog

Friday, December 25, 2015

Building Blocks of an Estate Plan

What estate planning documents do I need to have in place?

Many people put off establishing an estate plan either because they believe (wrongly) that they do not need an estate plan because they do not have substantial assets. While planning an estate can be daunting due to the complexities of federal and state laws, it is necessary to have a plan to protect your assets, ensure your wishes are carried out as well as to protect your loved ones. By consulting with an attorney, you can achieve these objectives while minimizing your tax obligations.

Everyibe should have the following four basic documents in their estate plan:
• Power of Attorney (POA) -- There are different types of powers of attorney. Generally, a durable power of attorney enables you to choose someone such as a spouse, adult child or close friend to conduct your affairs in the event of your disability or lack of capacity. A non-durable POA, however, can only be utilized to temporarily elect someone to manage your affairs while you are alive and well and are not incapacitated.

• Advance Directives -- Commonly referred to as a proxy for healthcare, advance directives authorize another person to make medical decisions for the type of treatment you should receive (or not receive) if you are unable to make those decisions for yourself.

• Will -- A Last Will and Testament is designed to transfer assets according to a person's wishes at the end of life. This document appoints a personal representative or an executor to carry out those instructions. While a Will is necessary to establish guardianship of minor children, this document must be probated in court which can be a time-consuming and costly process. For this reason, many people often take advantage of trusts to reduce the delay, cost and potential hardship of probate on loved ones.

• Revocable Trust. A revocable trust can hold legal title to and provide someone with a way to manage his or her property. Because the trust is revocable, you can make changes during your lifetime while you have the capacity, and minimize the expense, delays and publicity associated with probate. 

These estate planning documents are complicated as are the many issues related to estate planning. Ultimately, a well-designed estate plan requires the advice of a an attorney experienced in trust and estate law.


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