Newman Law Group

Tustin Estate Planning Law Blog

Should wills be simple or formal?

Estate planning need not be a difficult or overwhelming task. When people in California think about writing wills, they be at a loss as to where to begin. The question isn't so much what the estate plan should consist of but rather what is the right estate plan for the individual or individuals who are creating it.

Simple wills may suffice when there is likely to be no probate required. This would typically apply to estates with values below $150,000. The exception is when assets are going to a surviving spouse. Probate is not required in this instance regardless of the amount of the estate, though a spousal property petition may be required.

Estate planning need not be complicated

More and more people are recognizing the need to have an estate plan in place, even if they are at the beginning of their careers and adult lives in California. There are still almost 64 percent of Americans without a last will and testament. Estate planning can help ensure that a person's final wishes are carried out as he or she intends.

There are many possible pieces to an estate plan, but there are some basic documents that should be considered an integral part of any plan. These documents may consist of a last will and testament, a health care proxy and a power of attorney. These documents form a good basis for building an estate plan.

Protecting assets not subject to probate

There are many pieces to an estate plan in California. Many of these involve assets to be distributed to beneficiaries following a person's death. Some of these assets are subject to probate and some are not. Typically, the assets that have a named beneficiary are not subject to probate.

Assets that have a named beneficiary include items such as life insurance policies and retirement accounts. Other such accounts are transfer-on-death accounts and property that is held jointly with full rights of survivorship. These types of assets may not be subject to probate as the beneficiary or beneficiaries are named in the asset.

Including frequent flyer miles in estate planning

Estate planning can be a complex undertaking in California. In creating an estate plan, a person is determining who will inherit his or her accumulated assets after the person's death. Assets can include personal belongings, financial assets and real property, to name a few. Assets included in estate planning can also include frequent flier miles and loyalty rewards from credit cards.

When Anthony Bourdain recently passed away, some people were surprised at the relatively modest size of his estate. The bulk of the estate was left to his young daughter. His frequent flyer miles he left to his estranged wife to use as she feels he would have wished. Considering the number of miles he flew, this was probably not an insubstantial bequest.

Trust preparation for the care of a specific loved one

Estate planning can be a complex process, especially when considering the care and support of a loved one well into the future. California families seeking to provide for loved ones who are unable to care for themselves may consider taking specific steps, particularly drafting a special needs trust. Trust preparation requires thoughtful consideration of future needs and appropriate guidance.

Some people may think it is best to leave money to a sibling or another family member for the care of a special needs loved one, but that is not always the best option. In fact, if that person dies or is unable to speak for him or herself, that money may end up being used for something else. Leaving money and assets for the special needs person directly, however, could lead to the loss of certain benefits.

Advice to seniors: Transfer assets to a trust to protect them

Thanks to healthier living and better medicine, people are living longer in California. However, the mind does not necessarily stay sharp into old age. A loss of mental capacity can leave a person financially vulnerable. This is particularly true if the individual has a significant amount of money and does not have a trust in place. A decision to transfer assets into a trust could ensure that a person's estate is handled according to his or her wishes should one become incapacitated.

The estate of Stan Lee, the creator of Marvel Comics superheroes such as Iron Man, Black Panther and Spiderman is said to be the target of financial predators. Mr. Lee, who is 95, is said to be suffering from vision loss, hearing loss and mental impairment and family members and colleagues are reportedly trying to gain control of his considerable assets. With people living longer, estate planners are concerned that such situations will become more common.

Wills are drafted to inform others

Proper estate planning can be a gift to one's loved ones. By outlining a plan for the distribution of assets, an individual may reduce the amount of time and money spent to settle one's estate after a death. Wills are an important tool for individuals in the estate planning process. Individuals in California may wish to know more about the function of a will and how it is implemented. 

A will can be drafted by hand, typed or written with the aid of an attorney. In the will, the person writing it should name an executor, or the person who will take responsibility for settling the estate. The will should contain instructions for paying one's final debts and also tell who should receive any remaining assets. 

Revocable living trust a good choice to transfer assets

Many people wish to make the distribution of their estate assets as easy as possible for their family and friends. There are options to ensure that loved ones receive their fair share after one passes away. To transfer assets quickly, privately and to avoid probate, many individuals in California select a revocable living trust

By choosing to place assets in trust versus granting them to heirs in the will, the person's family and friends will likely face fewer challenges when the time comes to administer the estate. The revocable living trust is a legal document like a will, but it allows the estate to avoid probate when correctly used. A living trust also prevents the family from having to work with a lawyer after the individual's death while they are grieving.

Trust preparation includes funding the trust

Some individuals have questions about what assets should be included in their trusts. Certain financial accounts such as CDs and money market accounts can be placed into the trust or left separate. While, sometimes, there may be a good reason for leaving certain accounts out of the trust, it is usually good practice to fund the trust with all of one's financial accounts. In California, doing so can be a part of trust preparation. 

A trust can only control the assets that have been titled in its name. However, most people include a pour-over provision in their wills that will funnel any probate assets into the trust eventually. However, usually an individual's goal in creating a trust is to avoid probate and also to allow another person to have administrative abilities if they become incapacitated as well. 

A medical power of attorney can help you in times of need

Most people think of estate planning and wills, but there are other elements that can assist the individual during times of need while still living. A medical power of attorney is one such element of a complete estate plan that an individual in California can utilize to assist him or her while alive and in need of extra support. The medical POA enables the individual to assign a person to make medical decisions on his or her behalf if he or she is incapacitated. 

A medical power of attorney differs from a living will in that the medical POA may act on the person's behalf any time the person is incapacitated instead of just at the end of life. By appointing a medical POA, the individual can prevent family members from having to make difficult decisions and disagreeing about treatments. The individual will tell the designated person about his or her wishes, and then the POA will take action when the right time arrives.