Quick Guide to Your Estate Planning Needs
Everyone needs to play for what might happen in the future. It can often be overwhelming or seem unnecessary. This quick guide briefly breaks down what you need and why.
Revocable Living Trust
Who Needs this? If you own a home, or have assets valued greater than $150,000.00, you should have a revocable living trust.
Why is it important? When you die in California, your property must pass through probate even if you have a will. This is expensive, and it gives the court the power to make decisions for you. A Trust acts similar to a business entity and the creator, known as the "Trustor" gets to dictate those rules. It functions similar to a will and is often used to designate beneficiaries. However, it also functions to protect your assets if you become incapacitated.
This article highlights the estate planning failure of actor, James Gandolfini: http://trialandheirs.com/blog/celebrities/james-gandolfinis-estate-planning-mess
Who needs this? Everyone. But especially people with children.
When a Trust is created, the will is usually a "pour over" will. It is a basic document that essentially defers all decisions to the trust. It's still required by the courts and is looked to if the Trust is found invalid for any reason. If there is no Trust, the will determines an estate's asset division and beneficiaries. The will also has the unique ability to dictate who gets custody of your children if you die.
Power of Attorney
Who needs this? Everyone.
Consider, who would pay your rent and other bills if you were in the hospital or stuck overseas on vacation? Designating a power of attorney gives a person authority to handles these types of financial matters for you.
Advanced Health Care Directive
Who needs this? Everyone.
An AHCD is the document that allows you to dictate the person you feel most comfortable to make health care decisions for you if you are unable. You are also able to tell that person whether you want relief from pain or prefer to be drug free. You also empower that power to "pull the plug" if you do not want to be kept alive and unconscious. We often think of hospitalization as something that happens to us when we're old. But any day an accident or illness could temporarily or permanently put a person in the hospital. If you are unconscious for any reason, the doctors need to know who to look to for answers. Telling your family isn't enough.
A well-known example is the Terri Schiavo case, in which Ms. Schiavo was in a persistent vegetative state for 15 years. Her husband and family battled over whether to take her off life support. Ms. Schiavo was only 26 when she took ill.