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How can I learn more about estate planning in California?

Learning about how your state handles estate planning is a great starting point to gaining a better understanding of why it is important. Conveniently, the State Bar of California has a wealth of information to serve the general public on a variety of legal topics topics. Here's the page for free legal information.

If you go to that page, you will see that 3 of the 12 guides is about estate planning, which just goes to show you how important the topic is. They include the following guides:

  1. Do I Need a Will?
  2. Estate Planning
  3. Living Trust

Having an understanding of why estate planning is important for everyone--young or old; poor or wealthy--is super important, and one of the best starting points if you're on the fence about getting started.

What do I need to do if I already have an estate plan?

Even if you already have an estate plan, it's still important to review it periodically to ensure that your wishes are accurately reflected. By reviewing your estate plan every 1-3 years, you can make sure that you and your family's needs are appropriately met. 

Updating Your Estate Planning Documents

If some time has passed since you created your estate plan, you may want to consider reviewing it (either with or without an estate planning lawyer) to see if there's anything you want to update.

If circumstances have changed since you initially created your estate plan, then you may need to hire an estate planning lawyer to help you make updates. Here are some common situations that prompt people to update their estate planning documents:

  1. The death or birth of family members.
  2. A substantial increase or decrease in wealth.
  3. Changes in the law.

Partial Amendment or Restatement? 

If the changes to your Revocable Living Trust or Will are minor, you may only need a partial amendment or codicil, respectively.

However, if the changes are substantial, it's often best for the lawyer to "restate" or re-write the entirety of your trust or Will. This is often because your existing trust may contain provisions that depend on one another and making too many changes may detrimentally affect how your trust operates.

Indeed, with the rise of word processing and document assembly programs, restating documents can often be much cheaper than trying to hobble together changes to an existing document.

In simple situations, estate planning documents rarely need a complete overhaul. However, it's still a good idea to review your estate planning documents periodically, and at the very least, when there are major events such as the birth or death of a family member. In fact, you might consider setting a date every year where you review your financial situation, as well as your estate planning documents to ensure that both are performing properly.

Be Prepared

Kudos to you if you've already established an estate plan. You're among the small minority of responsible adults! You (and more importantly, your family) are likely in a much better position than other people you know. Interestingly, after a client finishes signing their estate planning documents, they often sigh and tell me how relieved they are. When I ask how it feels to be done, they reply, "I honestly can't believe I waited so long. I feel a sense of relief about concerns that I didn't even know I had!"

What is an Advance Health Care Directive? (A Brief Overview)

When most people think of estate planning, they think of money, investments, real estate, and other items of value. One thought that is overlooked are the important medical decisions that may need to be made if you became incapacitated. For this reason, just about every estate plan also includes a document called the Advance Health Care Directive.

Features Of An Advance Health Care Directive

The Advance Health Care Directive allows you to tell your medical providers your wishes with respect to life-sustaining treatment if you have a terminal illness, if you're in a coma, or the risks of treatment would exceed the expected upsides of that treatment. You may also specify the parameters of any relief from pain that you want or organ donation. Perhaps one of the most important things the Advance Health Care Directive does is allows you to name one or more individuals (also known as an "health care agent") to make decisions for your regarding your health care.

Powers of A Health Care Agent

In general, the health care agent has the following powers:

  1. He or she has the right to receive your medical information
  2. He or she has priority over others in making health care decisions for you
  3. He or she has the power to deal with your remains after you pass away (except to the extent that you specify in the Advance Health Care Directive)

California has conveniently created a statutory form of Advance Health Care Directive. You can find it for free in the California Probate Code Section 4701, so there's no reason not to have one!

What is a Durable Power of Attorney? (A Brief Overview)

A shorty, but a goody today. The Durable Power of Attorney is a legal document that allows you to name someone (also known as an "attorney-in-fact" or "agent") to make financial decisions for you. The Durable Power of Attorney can even be drafted broad enough to allow the agents to make gifts on your behalf or to transfer assets to your revocable living trust if you have created one. This document is only effective while you're alive. 

Why Do You Need One?

Most people only plan for death, but with advancements in medicine, it's possible to be alive for quite a while but be incapacitated to the point where you're unable to make decisions regarding your assets. Having a Durable Power of Attorney can help you avoid a court-supervised conservatorship and may allow your loved ones to act more quickly in the event that something happens to you and important decisions need to be made regarding your financial affairs.

Overlap With Trustees?

You may be thinking that the agent under a durable power of attorney would seem to have a conflict of interest with the Trustee of your Trust, but that is generally not the case. First, the agent under your Durable Power of Attorney is often the same individual that you've chosen to be your successor Trustee. Second, your Trustee deals with assets contained within your revocable living trust, whereas the agent under your Durable Power of Attorney principally deals with assets that are outside of your trust.

The Durable Power of Attorney is frequently a standard document that is incorporated into an estate plan, so don't be surprised if your estate planning lawyer includes one for you as well. Even if the cost of estate planning is outside of your budget, I encourage everyone to have a Durable Power of Attorney, as it is inexpensive to prepare and can even be found in the California Probate Code (Section 4401).