Useful Info

Useful Info

What documents are in a complete estate plan?

A typical estate plan includes a revocable living trust, an assignment of property, a certification of trust, a pour-over will, a nomination of guardian (if minor children are involved), a durable power of attorney, a health care directive, a health information release, and one or more trust transfer deeds. Once documents are completed, you will receive a folder with all of your original documents, extra copies of your certificate of trust, extra copies of your health care directive and health information release, a medical emergency contact wallet card, and a thumb drive with electronic copies of all documents.

How long does it take to create an estate plan?

An estate plan can take a month or more, depending on how quickly you review and respond with edits or changes to the draft documents that I send to you after our first meeting. You will meet with me 3 times. During our first meeting we will review your questionnaire and I will get all of your family information and find out about your estate planning goals. The second meeting is to review your draft documents and make sure you understand and are comfortable with each document. The final meeting is with a notary present to formally execute your documents.

Do I need a trust or can I just make a will?

I recommend a trust for clients who own one or more parcels of real property. Real property is typically a person’s largest asset. To clarify the difference: a will must be submitted to probate after a person dies and your beneficiaries will have to wait for several months, if not a year or more for distribution of your assets if your estate goes to probate, and the probate process can be costly. For an estate with a gross value of $1 million, the California Probate Code allows a maximum of $46,000 for each of the administrators and attorney costs. And there can be additional fees. A trust allows easy transfer of assets as you direct without the expensive, time-consuming process of probate.

What assets should be transferred to my trust?

Almost all of your assets should be transferred to your trust. As part of an estate plan package, we’ll execute a general assignment that expresses your intent to transfer all assets to your trust. Included is a schedule of assets that lists the current property you want in your trust. Once your trust is executed, it must be “funded”. This means you must formally transfer your assets to the trust. As part of your trust package, we will record trust transfer deeds that transfer your real property to your trust. You will contact all savings, checking, credit union institutions, and investment institutions to have your accounts formally transferred to your trust. Some clients prefer to keep a small checking account outside of their trust. Pension and retirement plans remain outside your trust and are transferred at death via a beneficiary designation form you update during your life.

Once I hire you, what is the process?

Once you fill out a client questionnaire, which includes several pages of questions about personal and financial situations, we will have our first meeting to review your responses. I’ll ask more questions to fully understand the extent of your assets and any issues related to your estate plan. We will fully explore your estate planning goals. Then, I will draft documents and get them to you within 3 – 4 weeks and we’ll schedule a second meeting to review changes and answer your questions about the documents. Once I make the final changes and you review the final draft, we will schedule the third meeting to execute the documents with a notary present to formalize the documents. Once the documents are executed, I will record any deeds, scan all documents, prepare your estate plan package for you, and send you all of your originals and a thumb-drive with an electronic copy of your documents. The process takes about 6 weeks, depending on how quickly you respond to questions and review documents.

What is a durable power of attorney and how do I select my “agent”?

A Durable Power of Attorney is a legal document that establishes your selection of an “agent” to act for you regarding your financial decisions and/or personal care decisions. He/She will be granted broad powers to transact your daily business on your behalf if you are unable to do so for any reason, or because of incapacity. The power of attorney is called “durable” because it stays intact during your incapacity and until your death. The power may be granted upon a determination of your incapacity (“springing”) or it may be immediately effective, which is often the case with married couples having each other act as power of attorney. The choice of an agent is very important. That person will have the powers that normally only you have over your financial affairs and personal care choices. It is important that you trust this person completely to carry out your business as you direct in your best interests. If you have no such person, you may want to designate a private fiduciary. This person is licensed by the state to act as a fiduciary.

What is a health care directive and how do I select my “agent”?

A health care directive authorizes a person to act as your agent for your healthcare decisions. It includes a healthcare power of attorney, which is your designation of an agent to make health care decisions for you in the event you are unable to do so. The health care agency becomes effective immediately so that if you are in a sudden accident and unable to respond, the person can make health care decisions for you. A companion document to each health care directive is a Health Information Privacy Protection Act (HIPPA) release which authorizes your health care agent to get medical information from your doctors. Your agent will have the power to speak for you only if you are incapacitated or otherwise unable to speak for yourself. You should trust your health care agent to act as you would direct if you could speak for yourself.

What’s the difference between a trustee and an executor?

A trustee is the person you designate to have control over all assets in your trust. When you establish a revocable living trust, that person is often initially you (or you and your spouse for married couples). You will designate “successor trustees” in your trust. They will have defined authority over your trust assets in the event of your incapacity or death.

An executor is the person you designate to administer all assets outside your trust. If you have a trust, your will is used to “pour-over” any remaining assets to your trust, so the executor is often in charge of marshalling any assets outside the trust and putting them into the trust, at which point the trustee takes over. In the event you have a will only, you give an executor the authority to handle the administration of your estate. This usually involves filing for probate of your will and obtaining authority from the court to distribute your estate assets as you designated in the will.

Should a person have more than one revocable trust? (separate property)

For couples where one or both parties have significant separate property, we will discuss whether it is beneficial to have a separate property trust. A separate property trust is desirable if the distributions are different for the separate property than for the couple’s community property. The separate trust helps to avoid commingling of separate and community property.