Who needs an estate plan? Top 7 reasons why you need one even if you think you don’t. Part II:

Last time, we talked a little bit about the top reasons why you may need an estate plan, even if you think you don’t.  Here are the last three reasons.

  1. Your children’s guardian.  Have children?  Have you named their guardian?  Is this document posted prominently in your house in case it’s needed?  If you don’t decide on your guardian, the court will.  The court doesn’t know you, your children, your family, or who you think would be most appropriate (or, conversely, who would NOT be appropriate).  You may not have decided on someone, but you’ve probably eliminated some candidates.  When you name no one, no one knows who you have eliminated, as the job is up for grabs to anyone.  Name your preferences or your very last choice could very well raise your children.
  2. Your child’s guardian, part two.  What happens if you’re in an accident and you and your spouse go to the hospital?  Will the police leave your children with the underage babysitter?  No, of course not. If you have not chosen a guardian, and posted that prominently (and told the babysitter), then the police are going to take your children to the police station.  They may very well put your children into foster care while you recover.  While the chance this would happen may be slim, why take the chance?
  3. Other documents necessary.  If you don’t have an estate plan, you’re less likely to have powers of attorney, a living will/advance directive, and other necessary estate planning documents.  These documents generally help you when you become incapacitated and cannot make decisions on your own behalf.  Often a spouse is your first choice, but what happens if your spouse is also incapacitated?  You need to prepare these documents to protect yourself and your wishes from being honored if you can’t speak for yourself.
Convinced?

So you have a living trust! Congratulations…now here’s some tips on what to do with it

Where to keep it, when to update it, and what to do with it:

o Keep your estate plan in your house, accessible to your family. If it’s in a safe deposit box when something happens to you, your family may not be able to get to it.
o Tell your family, and particularly your successor trustee, where your estate planning documents are located.
o Keep a copy (it does not have to be executed; I give my clients a blank copy) in a safe place, such as a safe deposit box in case your original is destroyed or lost.
o Review your estate plan each time there is a major life event in your family, such as a birth, death, marriage, or divorce. Also review it if you’ve bought or disposed of real property.
o Barring major life events, review your estate plan every two-to-three years to make sure it still reflects what you want. You can spend 15 minutes skimming through the summary sections to ensure you don’t want to change anything.
o Give your power of attorney for health care decisions and living will to your agent (the one who will be making decisions for you), and if it’s your spouse, also give one to the successor agent.
o Give your power of attorney for health care decisions and living will to your doctor(s) for your file, to the hospital if you have one you would go to in an emergency, and to your pharmacist.
o Give your power of attorney for your property to your agent or successor agent as well as to the institutions they will likely be dealing with, such as your bank, your financial advisor, or other account managers.
o Give your named guardian and conservator the nomination documents and make sure all caregivers know about them and how to find the documents in an emergency.
o TALK to your family about your wishes, your plans, and who you have designated as agent, conservator, and guardian.

Estate planning for same sex couples in California

California has made some strides toward equality for same sex couples, but it cannot be said that there isn’t still a long way to go.  As unfair as it is, same sex couple have to do more: prepare more documents, plan for more contingencies/eventualities, update more frequently – than their heterosexual counterparts.  The worst thing that a same sex couple can do is bury their heads in the sand, hoping or assuming it’s ok not to put anything in place – that somehow, some way, it’ll all be taken care of should something go wrong.

Uh, no.

Even in the best of circumstances, what you effectively do when you don’t plan is place an enormous burden on your loved ones; the ones who have loved you and cared about you the most, and the ones you have loved and cared about the most, are going to be put in a horrific situation should something happen to you and you haven’t planned for it.  And this horrific situation, not only does it come at a time of grief for your loved ones, but it is entirely avoidable.

Some tips to get you started:

  1. With no estate plan (will, trust), you die intestate (i.e. the government decides your estate plan) and the government’s plan discriminates against same sex couples.
  2. Without powers of attorney in place, the parents who threw you out of the house when you came out could be making medical and financial decisions for you if you’re incapacitated.
  3. Being a Registered Domestic Partner in California, or married, does not change these points in their entirety.
  4. Holding your property in joint tenancy with your property will not avoid the problems here, plus they could work to DIS-inherit your children and/or cause additional problems down the line.
  5. Not choosing a guardian for your child(ren) could mean they end up in foster care should something happen to you.
  6. Without a living trust, probate fees could take up to 10% of your gross estate (your estate not taking debt into account) and take 2-3 years – if not more – to resolve.

The best way to take care of your family when you are a same sex couple is to put an estate plan in place.

Estate planning for new parents

Your bundle of joy has arrived, and now you’re trying to figure out the new schedule and when you’ll ever get any sleep again.  Also, in the back of your mind, you know that you should probably “do something” about your will or figure out what will happen should you pass away.  Now there’s another life to worry about!  But time passes, you don’t know what to do or how to do it, or who to ask, so it gets placed on the back burner.  Suddenly Junior is 14 and you’re dealing with the death of your parents.  What are the things you wish you had known when Junior was a baby?

  1. The time to do your estate planning is NOW.  Should both parents be in an accident and hospitalized for a period of time (or, obviously, if you die), Junior could end up in the court system and/or in foster care.  If you do not choose who will care for your child if you cannot, then the court will decide.
  2. Having the court decide who will be the guardian for your child is NOT what you want.  When the court decides, the court does not have the time or ability to distinguish between your crazy Aunt Rose, who you have not seen in years, who lives in a small town in Arkansas (not that there’s anything wrong with Arkansas) and can’t seem to keep a steady job, and your sister and brother-in-law who are close to the entire family and would be the perfect guardians.  If YOU don’t decide who is going to raise your child, a stranger will.
  3. Not being able to decide on who your guardian will be it not a good excuse for delaying your estate plan.  A good estate planner will help you decide.  In addition, while you may not have decided definitively, you have probably narrowed the field among the options.  Remember, the court won’t know who you have ruled out.  I can help you to know what to think about, what to consider in making the decision, how to make the decision, and how and when to change it.

Don’t wait.  Once you have a child, it’s time to put your affairs in order.  You love your family and you love your child: it’s them, not you, who will suffer if you neglect these very important tasks.

Demystifying the estate planning process in California

The estate planning process is often put off because of the feeling that it is a long, difficult process.  There are a lot of decisions to be made, a lot of time to be spent on making the decisions, and lots of long, boring meetings with the attorney.

Not so!  Well, perhaps this is the case with other attorneys, but I have found that my clients appreciate the ease of the process as well as the flexibility.

The reality of it is – unfortunately – putting estate planning off until too late can mean a long, difficult, expensive probate process where your family, those you love the most in this world, suffer.

Making Decisions

This can be, and often is, the most difficult part of the estate planning process.  In fact, it often prevents the clients from proceeding.  What most potential clients don’t realize is that I can help you to make the decisions.  One of the advantages to creating a living trust as opposed to just a will is the ease with which changes are made.  I encourage my clients to make the best decision for right now, and then change it if circumstances change.  Plus, actually making a decision is critical.  Most couples may not have it nailed down who they want to be their children’s guardian, for example, but they have narrowed the field.  By not picking someone, if something should happen to them, then the position is open to anyone in the world who wants to petition, including those who the couple has excluded (and perhaps for good reason!).  It not only makes the issue of who will raise your children a crap shoot, but also could subject your child to a nasty custody battle.

The Process

I meet with my clients for an initial, no fee consultation to discuss their situation and potential estate planning needs.  We go over what they have, what they want, and the various options available to them.  Generally at that point most of the decisions are made, but sometimes a few remain to be decided.  Once all the decisions are made, we set a time for the estate plan closing.  This is a meeting where we sign all of the paperwork, and this takes about 90 minutes.  Other than the trust funding, which is straightforward, that is the extent of the process.  Usually just two meetings, the process is not nearly as daunting as it may seem.

So, what are you waiting for? Make an appointment by clicking here.

Estate planning for unmarried individuals in California

If you’re not married, you may think that you don’t need an estate plan. Not true! Generally, you need to get yourself an estate plan once you buy a house or have a child – or both! When you own real estate, your estate will (particularly in California) go above the $150,000 exemption for probate. This means that, once you own property in California, your estate will go through probate. Probate is what you want to avoid like it’s a disease: it will take 18-24 months to settle your estate and also take about 10% of your gross estate in fees – and that fee is not taking any indebtedness into consideration. And that’s just to start.

So once you buy a house, you need an estate plan. In addition, once you have a child, you need to have an estate plan because you will need to decide who is going to take care of your child should you be unable to. This can only be done in your will. In addition, if you don’t have handy who is responsible for your child if you become injured or incapacitated, then the police could TAKE your children if something happens to you. Just think: you’re out to a nice dinner, the babysitter’s with little Suzy, and you get into an accident on the way home. The police won’t be leaving little Suzy with the 17 year-old babysitter, and if you don’t have clearly posted who is to be responsible for Suzy, then the police could TAKE your child. You don’t want that to happen.

Both of these circumstances – buying a house and having a child – necessitate an estate plan, regardless of whether you are married or not. In fact, it becomes more important to have an estate plan when you’re single because you don’t have the potential benefit of joint tenancy.

What are you waiting for?

Estate planning, the Forbes Guide

Don’t believe me when I talk about the importance of estate planning, for everyone?  Here is the Forbes Guide to Estate Planning, which echoes much of what I have said in my various posts, and even includes a guide to estate planning “on the cheap”!