California Probate - Law Offices of Janet Brewer Blog

A Tale of Two Estates: Which one will be yours?

A story of two people who handled their planning differently can be helpful as you think about your situation. Which one are you?

The value of advance planning aimed at helping loves one in the event you pass away or become disabled is strongly reinforced in an article in the Sedona Red Rock News titled “Plan ahead in case of sudden sickness or death.”

One man called Ben has been married for 47 years and he’s always overseen the family finances. He has a stroke and can’t walk or talk. His wife Shirley is overwhelmed with worry about her husband’s illness. Making matters worse, she doesn’t know what bills need to be paid or when they are due.

Another person is Louise. At 80, she fell in her own kitchen and broke her hip, a common injury for the elderly. After a week in the hospital, she spent two months in a rehabilitation nursing home. Her son lives on the other side of the country, but he was able to pay her bills and handle all the Medicare issues. Several years ago, Louise and her son had planned what he should do in case she had a health crisis.

More good planning on Louise’s part: all her important papers were organized and put into one place, and she told her son where they could be found. She also shared with him the name of her attorney, a list of people to contact at her bank, primary physician’s office, financial advisor and insurance agent. She also made sure that her son had copies of her Medicare and any other health insurance information. Her son’s name was added to her checking account and to the safe deposit box at the bank. She made sure to have a legal document prepared so her son could talk with her doctors about her health and any health insurance matters.

And then there’s Ben. He always handled everything and wouldn’t let anyone else get involved. Only Ben knew the whereabouts of his life insurance policy, the title to his car and the deed to the house. Ben never expected that someone else would need to know these things. Shirley has a tough job ahead of her. There are many steps involved in getting ready for an emergency, but they are necessary.

First, gather up all your important information. That includes your full legal name, Social Security number, birth certificate, marriage certificate, divorce papers, citizenship or adoption papers, information on employers, any military service information, phone numbers for close friends, relatives, doctors, estate planning attorney, financial advisor, CPA, and any other professionals.

Your will, power of attorney, health care power of attorney, living will and any directives should be stored in a secure location. Make sure that at least two people know where they are located.

Financial records should be organized. That includes all your insurance policies, bank accounts, investment accounts, 401(k), or other retirement accounts, copies of the most recent tax returns and any other information about your financial life.

If you have any questions about what would happen to you or your loved ones in these kinds of situations, please call or email us today for a consultation.

Reference: Sedona Red Rock News (July 9, 2019) “Plan ahead in case of sudden sickness or death”

You Have Questions, Estate Planning has Answers

Having a good plan can prevent some problems from ever arising.

There are many questions in a family just waiting to arise, when it comes to passing assets from one generation to the next. However, a good estate plan can bring up the right questions followed by the answers, according to the East Idaho Business Journal in “Estate plans can help you answer questions about the future.”

Let’s look at some of these questions:

What will happen to my children when I die? You hope that you’ll live a long and happy life, and that you’ll get to see your children grow up and have families of their own. However, what if you don’t? A will is used to name a guardian to take care of your children, if their parents are not alive. Some people also use their wills to name a “conservator.” That’s the person who is responsible for the assets that any minor children might inherit.

Will my family fight over their inheritance? Without an estate plan, that’s a distinct possibility. Without a will, the entire estate goes through probate, which is a public process. Relatives and creditors can both gain access to your records and could challenge your will. Many people use and “fund” revocable living trusts to place assets outside of the will and to avoid the probate process entirely.

Who will take care of my finances, if I’m too sick? Estate planning includes documents like a durable power of attorney, which allows a person you name (before becoming incapacitated) to take charge of your financial affairs. Speak with your estate planning attorney about also having a medical power of attorney. This lets someone else handle health care decisions on your behalf.

Should I be generous to charities, or leave all my assets to my family? That’s a very personal question. Unless you have significant wealth, chances are you will leave most of your assets to family members. However, giving to charity could be a part of your legacy, whether you are giving a large or small amount. It may give your children a valuable lesson about what should happen to a lifetime of work and saving.

One way of giving, is to establish a charitable lead trust. This provides financial support to a charity (or charities) of choice for a period of time, with the remaining assets eventually going to family members. There is also the charitable remainder trust, which provides a steady stream of income for family members for a certain term of the trust. The remaining assets are then transferred to one or more charitable organizations.

An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances.

Reference: East Idaho Business Journal (June 25, 2019) “Estate plans can help you answer questions about the future.”

 

Does POA Mean No More Control?

If you do not have a power of attorney, you can face some real challenges.

People, especially seniors, often fear that if they create a power of attorney, they have lost control and are more vulnerable to being exploited. However, that does not have to be the case, according to the Daily Local News in “How to stay in control when appointing a power of attorney.”

On one hand, without having a signed power of attorney, which is relatively simple to obtain from an estate planning attorney, the family may be faced with going to court to file for guardianship.

Guardianship is expensive, time consuming, can limit the individual’s freedom and may even result in an appointment of someone the person does not want to be their guardian. There are some instances where guardianship is necessary.

On the other hand, the seniors who believe that a power of attorney is a powerful document that requires careful consideration, are right to give it the thoughtfulness this document deserves.

Here’s how to maintain some measure of control, while having a power of attorney:

Be certain about the agent you name. This is not a role for someone you recently met who feels like an old friend. It must be someone you would easily trust with your entire life savings, without a second thought. You need to be 100% sure that the person would act responsibly, in your best interests, following through in paying bills, consulting with experts when necessary, keeping records and being scrupulously honest and putting your interest first in everything they do.

Don’t name someone just because they are your oldest child and someone’s feelings would be hurt. If a person has money problems themselves, that person is not a good candidate for this role.

Have a backup. Or two. If your primary “attorney in fact” is unable or unwilling to act on your behalf, have a second person, or even a third, ready to act.

Ask your estate planning attorney to create documents that work for you. There are forms you can use, but they may not be appropriate for your situation. Your best bet is to have an attorney prepare a power of attorney document that meets your needs. For instance, you may not want to give someone unlimited power, or you may want to give them power to do everything but gift assets. You might want to give them the ability to cash in insurance policies for your medical expenses, but not to change the beneficiaries on your insurance policies.

If you want two agents to act together, you need to know whether your bank, brokerage house, financial institution or financial advisor will accept two. Will they be able to work together?

Separate financial power of attorney and health care power of attorney. One person does not need to handle all your tasks. One of your children is great in crisis situations, while another is good at finances. Divide up the tasks, so that each can participate in decision making, in different areas.

Who needs to know about your power of attorney? It’s best if all your children know if one of them has been named attorney in fact and others have not. They will find out eventually, and it may be better, even if there is some grumbling, for them to know in advance of a crisis.

Fire at will. You retain the right to fire your agent(s), by serving them with a revocation or by appointing another attorney in fact. If the family is not getting along and things have turned ugly, speak with your estate planning attorney to ensure that the proper protections are in place. If you have any questions about your current power of attorney or estate plan in general, please call or email us today.

Reference: Daily Local News (June 11, 2019) “How to stay in control when appointing a power of attorney”

How to Prepare the Right Information for Loved Ones

Do you really want them to conduct a frantic search for your papers?

We all face the chance of becoming ill later in life and it is a certainty that we will all pass away. Therefore, perhaps it would be best to prepare some important information for your loved ones, according to Catching Health in “Getting your affairs in order.”

Start with the concept of incapacity, which is an important part of estate planning. Who would you want to speak on your behalf? Would that person be the same one you would want to make important financial decisions, pay bills and handle your personal affairs? Does your family know what your wishes are, or do you know what your parent’s wishes are?

Financial Power of Attorney. Someone needs to be able to pay your bills and handle financial matters. That person is named in a Financial Power of Attorney, and they become your agent. Without an agent, your family will have to go to court and get a conservatorship. This takes time and money. It also brings in court involvement into your life and adds another layer of stress and expense.

It’s important to name someone who you trust implicitly and whose financial savvy you trust. Talk with the person you have in mind first and make sure they are comfortable taking on this responsibility. There may be other family members who will not agree with your decisions, or your agent’s decisions. They’ll have to be able to stick to the course in the face of disagreements.

Medical Power of Attorney. The Medical Power of Attorney is used when end-of-life care decisions must be made. This is usually when someone is in a persistent vegetative state, has a terminal illness or is in an irreversible coma. Be cautious: sometimes people want to appoint all their children to make health care decisions. When there are disputes, the doctor ends up having to make the decision. The doctor does not want to be a mediator. One person needs to be the spokesperson for you.

Health Care Directive or Living Will. The name of these documents and what they serve to accomplish does vary from state to state, so speak with an estate planning attorney in your state to determine exactly what it is that you need.

Health Care Proxy. This is the health care agent who makes medical decisions on your behalf, when you can no longer do so. In Maine, that’s a health care advance directive. The document should be given to the named person for easy access. It should also be given to doctors and medical providers.

DNR, or Do Not Resuscitate Order. This is a document that says that if your heart has stopped working or if you stop breathing, not to bring you back to life. When an ambulance arrives and the EMT asked for this document, it’s because they need to know what your wishes are. Some folks put them on the fridge or in a folder where an aide or family member can find them easily. If you are in cardiac arrest and the DNR is with a family member who is driving from another state to get to you, the EMT is bound by law to revive you. You need to have that on hand, if that is your wish.

How Much Should You Tell Your Kids? While it’s really up to you as to how much you want to share with your kids, the more they know, the more they can help in an emergency. Some seniors bring their kids with them to the estate planning attorney’s office, but some prefer to keep everything under wraps. At the very least, the children need to know where the important documents are, and have contact information for the estate planning attorney, the accountant and the financial advisor. Many people create a binder with all their important documents, so there are no delays caused in healthcare decisions.

An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances and will be helpful to your loved ones.

Reference: Catching Health (May 28, 2019) “Getting your affairs in order.”

Planning International Travel? Why to Talk to an Estate Planning Lawyer First

Before you leave for an international trip, talk to an estate planning lawyer first. Not only should you update your estate plan before travelling, but also you may want to sign additional documents to take with you. When travel takes you far from home, be prepared.

Update Your Estate Plan Before Travelling Internationally

If you have not reviewed your estate plan in a while, take a look at it before you leave on your trip. You may notice that information is very out of date or that your wishes have changed. Make an appointment to talk with your estate planning attorney and make the necessary updates to your plan.

If you do not have an estate plan or only have a will, now is a great time to make your plan. You never know if an emergency will come up when you travel internationally. There could be limited Internet access, medical personnel may not understand you or know how to contact your relatives, or you may be incapacitated and far from home. Estate planning provides peace of mind that your wishes are written down. In addition, you can take a few more steps to smooth out issues when abroad.

Health Care Directive and Emergency Contacts

While travelling, you could have a medical emergency and be unable to communicate your wishes to doctors. An advance health care directive or medical power of attorney allows someone else to make medical decisions for you when you cannot. You can spell out exactly which decisions the person can make and what kinds of treatment you want in particular situations.

It is a good idea to bring a paper copy of your health care directive or power of attorney along with you and keep it with other important papers. Also, if you are travelling with the person who has your power of attorney, you may want to execute a separate temporary power of attorney allowing someone who is not on the trip to make decisions.

In addition, make a list of emergency contacts such as your relatives back home, your doctor, and even your lawyer. You may want to include your lawyer in case you encounter a legal problem or if someone needs to know the contents of your will or power of attorney. Also include a list of any allergies or health conditions. Put all this information in an easy-to-find place, such as near your passport.

Children and International Travel

Finally, take some additional steps if you are travelling with children or leaving children at home. If you are travelling with children, it is a good idea to bring along a signed and notarized document indicating their relationship to you and that you have permission to take them on the trip. This is especially true if you are not related to the children, you have a different last name, or you do not resemble the children. If you are leaving children at home, entrust someone to care for them in your absence, whether informally or by executing a legal document.

Planning to travel internationally? Look to Janet Brewer, Esq. for thorough and thoughtful estate planning advice. Janet’s more than 20 years of legal experience will give you confidence and peace of mind. To schedule a “Get Acquainted” meeting, visit Janet's website or call her office at (650) 469-8206.

You Need a Power of Attorney but Which One?

A will may not be sufficient to handle all situations, so other documents are added to your estate plan.

Everyone needs a power of attorney. However, it is important to know there are different kinds and you need to know which one is best for your circumstances, according to Wicked Local in “Investors, Plans & Money: Power of attorney,” It is also important to keep in mind that a power of attorney gives a person the legal right to make decision in certain areas of your life and that person does not have to be an attorney or a spouse.

Each type of power of attorney works to achieve a slightly different goal. As you work with your estate planning attorney on developing your overall estate plan, you will want to know which type you need and what your state’s requirements are. You will have to be of sound mind, with awareness of what you are signing, when the documents are prepared and signed.

Here’s a look at the basic powers of attorney:

A General Power of Attorney gives the named agent the broadest scope and authority to act and make decisions for another person. The document ideally lists the actions the person wishes them to take. This requires absolute trust, because it gives the agent complete control.

A Limited, Specific or Special Power of Attorney is a document that gives an agent the authority to act on your behalf in a very specific area of your life, task, or within a specified time frame. An example would be if you wanted someone to sell, maintain, or manage property for you.

The Springing Power of Attorney is “triggered” (hence the name) when, and only when, certain conditions are met. That might be a loss of mental capacity, for example. This document also must be very carefully defined, and proof of the condition being met may need to be presented.

A Healthcare Power of Attorney goes by different names depending upon the state. However, it is named, this is the legal document that gives the authority to make healthcare decisions, if the person is incapacitated through illness or accident. The person named as your healthcare agent should have a clear understanding of your wishes regarding extreme life-sustaining measures, as well as critical care.

There can be problems with powers of attorney. The person named to act as an agent must be entirely trustworthy and reliable. Other issues arise, if the documents are not prepared properly. This is why an experienced estate planning attorney is the best source. Here are some examples of what can go wrong:

• Details are lacking, so the document is declared invalid;
• The wrong type of power of attorney is created;
• The state requirements are not met;
• An agent is named who the attorney would immediately know is a bad choice; and/or
• A generic document does not contain the correct language.

An estate planning attorney can advise you on creating a plan that fits your unique circumstances. If you have any questions about your current estate plan or powers of attorney, please call or email us today.

Reference: Wicked Local (April 24, 2019) “Investors, Plans & Money: Power of attorney”

Your Assets, Your Wishes: You Decide or Should the State?

The state will most likely be happy to do it for you after you die.

If you do not have a will or an estate plan, your wishes may not be carried out but your assets will be distributed, according to the Concord Monitor in “Make Your Wishes Known.” The reason? Because your property will be distributed according to the law of intestate succession in the state where you live at the time of your death. 

If you want to have a say in what happens to your property, including financial accounts and personal items, you need a will. However, that’s not the only document you need. Here’s a list of the documents that are part of an estate plan.

Last will and testament. This transfers property through the probate process. It ensures that you get to tell others how you want your assets distributed. It may include naming a guardian to be responsible for a minor or incapacitated heir’s personal care and assets.

If you have minor children, you may wish to include a testamentary trust so assets can be managed, and their distribution controlled. If your family includes an individual with special needs, you’ll want a Special Needs Trust (SNT), so they do not lose their eligibility for government benefits.

There are many different types of trusts, and they serve different purposes.

Revocable Trust. This can distribute property without going through probate. It also preserves privacy, since documents do not become public. To avoid probate, the trust must be funded during your lifetime, by changing the title on assets from your name to the name of your revocable trust. That may include bank and investment accounts, personal property and real estate. Income, dividends, gains and losses continue to be reported on your tax returns, while you are living.

If you own a business, talk with your estate planning attorney about whether the ownership of the business should be transferred to a trust.

Married couples should speak with their estate planning attorney about having a joint trust together, or if they should each have separate trusts for estate tax planning, creditor protection, protecting children from prior marriages, or ensuring the continuation of a family business.

You may need a pour-over will with your revocable trust, so assets may be transferred into the revocable trust that are outside of the trust at the time of your death. Your estate planning attorney will be able to discuss this in detail, to see if it is a good option.

Joint ownership. If assets are owned in joint tenancy, property automatically transfers upon death to the surviving joint owner. It is not affected by your will and is a way to avoid probate. However, there may be a loss of control and there may be gift, estate, or income tax consequences.

Beneficiary designations. Life insurance, retirement assets, annuities and other Pay on Death accounts all have a person named to receive the asset upon the death of the owner. Every asset you own with a beneficiary designation should be checked every few years to make sure the right person is set to receive the asset. The beneficiary designation supersedes anything written in your will. There should always be a primary and a secondary beneficiary named, just in case the primary predeceases you or does not want to accept the asset.

Power of Attorney. Everyone should have a Power of Attorney, in the event of incapacity. This permits someone to act as your agent in any financial matters. There is also the Health Care Power of Attorney, which gives another person the authority to make health care decisions on your behalf, if you are not able to communicate your wishes.

An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances. You can read more about how our process works, how we can make sure we are a good fit for your needs, and how to get started today right here.

Reference: Concord Monitor (April 22, 2019) “Make Your Wishes Known”

Where Do You Want Your Assets to End Up?

Meeting with an estate planning attorney is a good way to get started and meet your goals.

The size of the estate really doesn’t matter. If you have assets, you really do need to have an estate plan, according to the Observer-Reporter in “Set up an estate plan so your assets go where you want.” If you don’t have an estate plan? It is unlikely your assets will end up where you want them to go, as state law takes over.

If your will was done more than four years ago and was never updated, it may lead to some unwanted results. If people you named as beneficiaries or executors have died, or if there were divorces in your family, these are examples of changes that should be addressed in the estate plan.

Many people don’t know that insurance policies, annuities, 401(k), or IRA accounts that have a designated beneficiary are going to the designated beneficiary, regardless of what is in the will. If the will says everything in the estate should be divided equally between children, but one child was named the beneficiary on the life insurance policy, then only the named child will inherit the insurance policy.

Another part of an estate plan that is needed to ensure that your wishes are followed, is a financial power of attorney and a health care power of attorney. The financial power of attorney gives the person you name the legal ability to make financial decisions for you, if you are incapacitated. The health care power of attorney, similarly, gives the person you name the power to make health care decisions for you, if you cannot do so for yourself. A living will is another part of planning for incapacity that is a part of a comprehensive estate plan. The living will lets your wishes for end of life care be known to others.

Assets that pass to heirs through beneficiary designations do not go through the probate process. However, assets distributed through your will do so. Probate administration of an estate takes some time to complete, depending upon where you live. In some states, probate is more involved and time consuming than in others.

Another reason why people like to avoid probate is that documents, including your will, are filed with the court and become part of the public record. That’s why many people who lose a family member find themselves receiving direct mail and phone calls about buying insurance policy or selling their home.

There are ways to minimize the number of assets that pass through probate, which your estate planning attorney will be able to explain. Trusts are used for this purpose. There are a variety of trusts that can be used, depending upon your circumstances. Some are used to protect inheritances, if a person has an opiate addiction or cannot manage her own affairs. Others are used, so individuals with special needs do not receive inheritances that would make them ineligible for government benefits.

Reference: Observer-Reporter (April 19, 2019) “Set up an estate plan so your assets go where you want”

Unmarried and Partnered? Your Estate Planning Needs

If you are legally unmarried and have a partner in California, you may have unaddressed estate planning needs. Estate planning can give you peace of mind about your partner’s ability to inherit from you, make medical decisions for you, and more.

Giving an Inheritance to Your Partner

Unless you have a common law marriage that is recognized in another state (California does not recognize common law marriage), your partner will not automatically inherit from you. Intestate succession, the line of inheritance if you have no will, defaults to giving your estate to spouses, children, and other relatives.

Since you probably want to give all or part of your estate to your partner, you need a will or another estate planning structure. In a will, you can leave your estate to anyone – not just blood relatives or spouses. Further, to make a valid will in California, you must follow specific legal requirements. Writing down your wishes on a piece of paper kept in your safe is not sufficient and could jeopardize your partner’s ability to inherit.

You could also consider creating a trust. In California, a trust can provide income to a partner for as long as you wish, while preventing your family members (and potentially creditors) from accessing the money.

Permitting Your Partner to Make Medical Decisions for You

In California and other states, your doctors most likely will not allow your partner to make any medical decisions for you. Unfortunately, the medical system defaults to blood relatives in the absence of a marriage certificate. But you have ways to permit your partner to make medical decisions if you are incapacitated. You need to sign a medical power of attorney or an advance health care directive, naming your partner as your agent. Without one of these documents, your partner may be shut out of medical decision-making – or even not allowed to visit you in the hospital.

Check the Rest of Your Estate Too

While you are doing all this estate planning, be sure to check that other items you own will go to your partner. For example, you may have a 401(k) or other retirement accounts such as IRAs. You need to fill out beneficiary forms naming your partner in order for him or her to receive the accounts if you pass away. The same is true for life insurance – you need to fill out a form to allow your partner to receive the proceeds. While it may be a pain to find all these forms, you will have peace of mind that your partner is protected.

Planning your estate? Look to Janet Brewer, Esq. for thorough and thoughtful estate planning advice. Janet’s more than 20 years of legal experience will give you confidence and peace of mind. To schedule a “Get Acquainted” meeting, visit Janet's website or call her office at (650) 469-8206.

A Health Care Directive Can Become Real Important, Real Fast

What happens if you suddenly cannot make your own decisions?

A health care directive can become very important, if you should find yourself incapacitated. That is why it is part of a comprehensive estate plan, according to the McPherson Sentinel in “Advance health care directives important to all adults.”

Documenting your wishes about future health care lets a cognitively healthy person express their wishes with a clear perspective. Unfortunately, only one in four American adults has their advance health care directive in place. Many wait to begin the planning process, until they are in their 50s or 60s. The problem is, life doesn’t have a plan. At any time in life, tragedy can strike. A serious illness or an accident can occur, and leave the family wondering what the person would have wanted.

The most common advance directives including a durable power of attorney for health care, living will, and pre-hospital do not resuscitate directive, known also as a “DNR.”

The durable power of attorney for health care allows you to name a person to make medical decisions for you, in the event you cannot. They are also referred to as a “medical power of attorney” or “health care agent.”

This is different than a durable power of attorney, which gives a person the right to act as another person’s agent and conduct all business and financial matters on their behalf.

It’s very important that the people you name to fulfill these roles are told that they have been named. They need to fully understand what your wishes are, what kinds of treatments are and are not acceptable for you, your preferences for doctors and where you would like the treatment to take place.

The person selected will need to be trustworthy and have the ability and willingness to communicate your wishes, even if family members don’t agree with your choices. They will need to follow your wishes, even if they are not the same as their own.

Keep family dynamics in mind. If a younger sibling is selected to be your health care agent and they have been dominated throughout their life by an older sibling, will your wishes be honored, or will they become the subject of an extended argument?

A living will is a document that details the type of care you want to receive at the end of life. It explains your wishes about accepting life-sustaining procedures, like being placed on a ventilator, receiving artificial nutrition and hydration, if at least two physicians deem your condition to be terminal.

These documents should be prepared for you as part of your overall estate plan, with the guidance of an estate planning attorney. Be aware that the laws vary from state to state, so you’ll want to work with an attorney who knows your state’s laws. If you relocate to another state, you will need to have your estate plan updated to ensure that it is still valid.

You can read more about how our process works, how we can make sure we are a good fit for your needs, and how to get started in our Palo Alto office right here.

Reference: McPherson Sentinel (April 17, 2019) “Advance health care directives important to all adults”