Estate Planning FAQs

What Is estate planning?
Estate planning allows you to organize your affairs during your lifetime to provide for yourself and your heirs. Documents including Wills, Trusts, Financial Powers of Attorney and Advanced Health Care Directives are used in the process. An estate plan takes into consideration many issues such as unique family dynamics, income and estate tax reduction and estate liability. When an estate plan is properly executed, it allows for the orderly management of assets in the event of incapacity and the efficient and cost effective disposition of assets following death. An estate plan is best handled by a knowledgeable licensed attorney.

Estate planning attorneys do not sell insurance, annuities, securities or real estate. Estate planning is not financial planning. This means an estate planning attorney will not tell you where or how to invest your money.

Why should I have an estate plan?
Proper estate planning allows you to continue to control the management of your affairs in the event of your untimely death or incapacity. It provides you and your loved ones assurance that the people who mean the most to you will be cared for properly even if you can’t do it yourself.

In times of stress, unless there are detailed instructions already in place, decisions are sometimes made based solely on current emotional reactions and not on the basis of well-reasoned thought. By planning ahead, you create a course of action for your loved ones to follow so that they know they are abiding by your wishes.

What Is a Will?
A Will is the most basic of estate planning documents; everyone needs a Will. It should be prepared by an attorney knowledgeable in estate planning matters. A Will states who will receive your assets after your death. Assets are the things you own including, but not limited to, real estate, bank accounts, stocks, bonds, life insurance, retirement accounts, automobiles, art collections, jewelry and furniture. A Will appoints an executor to distribute your assets after your death. It may also appoint a guardian to take care of your minor children after your death and/or appoint a trustee to manage property for certain individuals after your death. However, it is important to note that a Will is effective only after your death.

What if I do not write a Will?
If you have not written a Will, the State of California will write one for you. Under California law, if you are married, your community property assets will be distributed to your surviving spouse and your separate property assets will be divided between your surviving spouse and your children. If you’re not married and have no children, your assets will go to your parents and if they are no longer surviving, to your brothers and sisters. Beyond your siblings the distribution rules become more complicated but involve your nearest relatives.

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What is a Trust?
A Trust is a legal entity that holds many of your assets. It can be established during your lifetime as well as after your death. A Trust has three important parties: (1) the Settlor who creates the Trust, (2) the Trustee who manages the assets in the Trust and (3) the Beneficiary who gets the benefit of the Trust assets.

What is a Living Trust?
A Living Trust (sometimes called a Revocable Living Trust) is a Trust that you create during your lifetime. As a general rule, initially you will be not only the Settlor but also the Trustee and Beneficiary. It should be prepared by an attorney knowledgeable in estate planning because of the tax and legal implications created by a Trust.

Why would I want a Trust?
There are many reasons why a Trust could be beneficial to you. Some of the reasons are:

1. Avoid Probate and Conservatorship
A Trust can avoid the formal court administration called Probate. Because your assets are in the Trust, upon your death the Successor Trustee manages and distributes them to your designated Beneficiaries, usually without any court intervention. A Trust also can manage your assets for you during your lifetime in the event of your incapacity without the necessity of the formal court administration called Conservatorship. The Trust document typically gives the Successor Trustee the power to automatically take over management of your investments in the event of your death or incapacity without any court action.

2. Minimize Taxes
Properly drafted Trusts may also minimize, or even eliminate, certain Estate, Gift and Income taxes. The tax savings can sometimes amount to hundreds of thousands of dollars.

3. Maximize Control Over Your Estate
A properly drafted Trust continues to give you control over your investments even after your death. Further, a Trust can provide significant protection for your beneficiaries with special needs such as someone who is severely handicapped. It gives you control over future events if you become so ill that you’re unable to manage your investments.

4. Maintain Privacy
The actual Beneficiaries of the Trust are usually the only individuals who have a right to see the Trust provisions. Thus, unlike Probate, which is a public procedure, what you own, the value of what you own, who your beneficiaries are and how you want your estate to be managed and administered in the event of your death or incapacity, is private. Typically, none of your private investment records or private wishes and desires are made available to anyone other than those you want included in your estate plan.

5. Creditor Protection
Certain Trusts, when properly drafted, provide protection for the Beneficiaries (you, during your lifetime, and future Beneficiaries, after your death) so that your creditors are unable to access the assets in the Trust. These Trusts also avoid the expense and frustration of unnecessary litigation.

What kind of estate plan is right for me?
There is no “one size fits all” estate plan. Estate planning is very personal because each individual has unique priorities and needs. Some of us put more emphasis on saving taxes. For others, succession planning is important. You may have elderly parents or young children who rely on you for care and/or support; special provisions need to be made for them. A good estate planner will address your individual situation and tailor an Estate Plan to your priorities and needs.

What is a Financial Power of Attorney?
A general Financial Power of Attorney allows you to authorize another person to act on your behalf in all financial matters. The person to whom you give your Financial Power of Attorney may write checks against your bank account, sell your property, enter into contracts in your name – in short, everything and anything you can do. Obviously this is a very powerful document. Because many issues must be considered and options weighed, it is important that the document be prepared by a knowledgeable attorney after a personal consultation with you.

What is the purpose of an Advance Health Care Directive?
An Advance Health Care Directive is another document that allows you to have a measure of control over future events. It is a Power of Attorney in which you authorize your agent to act on your behalf regarding health-care related decisions if you are not capable of acting for yourself. It includes consent or refusal of consent to life support. In addition, it directs medical professionals regarding your wishes for certain specified procedures. As with all estate planning documents, an Advance Health Care Directive should be prepared by a knowledgeable attorney after a personal consultation with you.

Estate Administration FAQs

When does an estate need administering?
Estate Administration is a very broad term. We help administer estates during a person’s lifetime or following death. Whenever someone can no longer manage his or her affairs, whether through physical disability or mental incapacity, if a plan has been made in advance, a designated person or institution (e.g., a bank or professional trustee) steps in to take care of matters. If no plan has been made, the Probate Court will appoint a person or institution to manage the affairs.

Business Transactions FAQs

How can I be sure my business will continue if I am not capable of managing it myself?
Succession planning is very important for closely held businesses. It is necessary to begin planning long before a crisis arises. Among the decisions that need to be made in advance is to determine who will be best qualified to lead the business. Providing the necessary framework to ensure that your wishes are followed is essential to the success of your plan.

What structure is needed to limit my personal liability while providing a smooth business vehicle?
Often the proper vehicle, Limited Liability Company, Limited Partnership or Corporation, converts a financially hazardous sole proprietorship to a risk-reduced, more efficient, business entity. The issues involved will determine the best vehicle for achieving the desired economic results.

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Dispute Resolution / Mediation/Litigation FAQs

Can I win?
In order to determine whether or not a case is good, it is necessary for the client to provide the attorney with all of the facts of the matter. If it is determined that there is sufficient admissible evidence to proceed, it is then necessary to estimate the cost of an action and weigh that against both the likelihood of prevailing in a court of law and the amount in dispute.

How much is it going to cost?
Because each case is different, it is not possible to give an exact amount. Some disputes are relatively easy to resolve by getting the parties to sit down and discuss the issues and look for a mutually agreeable solution. Others may require the use of mediation or arbitration. Still others may require the use of litigation through the court system.

After an initial evaluation of each case, an estimate may be provided. However, again because each case is different, there is no guarantee that the matter will be settled in the client’s favor for the estimated fee.

Medi-Cal Planning and Elder Law Issues FAQs

If I apply for Medi-Cal for my husband's nursing home care, will I be able to keep my house?
Through proper planning, it is possible to retain a primary residence for the well spouse. But, it is essential to have an attorney knowledgeable in Medi-Cal issues prepare the plan that is proper in your situation. We work with our clients to maximize the well spouse's financial security.

I think my elderly aunt is being taken advantage of. What can I do?
Elder abuse may be physical, mental and/or financial. In all cases it is important to get the facts, quickly secure the situation, and identify the relevant rights and responsibilities. Depending on the situation, it may be necessary to involve Adult Protective Services and/or law enforcement agencies. Above all, it is important that you not ignore the situation and that you consult with an attorney knowledgeable in elder law issues to more fully assess the situation

Our experienced staff works to ensure the safety and well-being of our clients' loved ones.

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