Taking control of one’s future and setting down wants, goals, and dreams on paper is done through the creation of an Estate Plan with an attorney. The plan is when a series of documents encompasses all the “what ifs” of life — spending time to minimize gift, estate, generation-skipping transfers, and income tax that can affect a person’s wealth. By investing time in the future, a plan prevents family members from taking on the burden of navigating the legal logistics and the emotional guessing game.

What Is A Will?

A will is a stand-alone document that is legally binding. However, having this document does not mean that your family can avoid probate court. Instead, you need additional documentation called a revocable living trust to avoid the probate process. Both legal documents work in tandem, therefore person’s will can ensure that upon their death, anything earned outside the trust reverted to the trust.

Additionally, there are no two identical estate plans as the documents should reflect the client’s life and should include multiple components. A properly drafted plan consists of a trust, will advance healthcare directive, a living will, durable financial power of attorney, and a Health Information Privacy Authorization Act that empowers your loved ones to speak with medical staff on your behalf. Additionally, your plan should include all the necessary funding documents to ensure that your family avoids the court process when a person is deceased or become incapacitated.

What Happens If I Die Without an Estate Plan or A Will In Place?

When someone dies without any proper documentation in place, including a will, the courts consider them to have died intestate. If this occurs, there are two methods to manage this circumstance. First, is probate court, which is a public process, and the fees are set based on the gross market value of the estate. For example, if the estate is worth one million dollars but has accrued an estimated $980,000 in debt, it only leaves $20,000 in the estate before processing any probate fees. For those residing in California, if the estate has a gross value of $150,000 or less, the estate heirs can use a small estate claims affidavit and used a declaration to administer the estate. On the other hand, the banks will need probate to open when an estate grosses more than $150,000 in value.

In some cases, if the situation does not involve a beneficiary, the probability of the bank or institution will force probate to open on a small amount is high but also incredibly cumbersome.

What Are the Main Components of a Successful Estate Plan?

Estate plans are customized to meet the client’s wishes for what they need to occur if the situation arises that the client is unable to care for themselves or upon their death. There are four key components that one needs for the estate plan to be a success. The first section is a living will, which is essential in directed loved ones on how to manage a person’s life once they are unable to make decisions for themselves, such as being on life support. Including a healthcare power of attorney empowers a person’s loved ones to make all medical decisions on their behalf. The purpose of the Health Information Privacy Authorization Act waiver gives a designated person the ability to communicate with health care providers, along with discussing treatments. For personal finances, a durable financial power of attorney is required to name the person responsible for making any financial decisions for the individual. California, clients that own property will need not only a will but also a living trust and a pour-over will.

For more information on Estate Planning Process in California, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (619) 550-3080 today.