Will, Trusts, and Estates

When you die, what will happen to your assets? Who will inherit them? How much will each person inherit? What will happen if you become incapacitated? Who will make medical and financial decisions for you? Who will take over your personal, financial, and medical affairs?

Estate planning is the process of answering these questions and putting your financial and health affairs in order before you die or become incapacitated. It is done in order to maximize the wealth that you pass on to your heirs after you die with the minimum inconvenience to them. It is also done in order to make sure that someone you trust will be making health care and financial decisions for you in the event that you become incapacitated. Most important of all, it is a way to document your wishes so that they will be adhered to upon your death or incapacity.

Without an estate plan, a large portion of your estate could be taken by estate taxes and probate fees. However, a little education and some planning can save thousands of dollars for your children and their heirs.

You can rely on the Kisner Law Firm to create an estate plan that saves you substantial amounts of money, prevents unnecessary complications, eliminates probate expenses and minimizes or eliminates estate taxes. Call the Kisner Law Firm today.

Are you aware of the fact that a large portion of your estate may be taken by estate taxes and probate fees when you die? Without an estate plan, a judge will decide how to distribute your assets among your heirs by following California's laws of intestate succession. This probate process can take over a year to complete and will cost your family thousands of dollars. Furthermore, the government may impose an estate tax on the transfer of your assets to your heirs when you die if your estate is over the applicable exclusion amount. This tax could cost your estate hundreds of thousands of dollars.

Without an estate plan, your children will be forced to endure an expensive and lengthy probate procedure, wait a year or more to receive their inheritance, and may be required to pay thousands or hundreds of thousands of dollars in estate taxes. Don't leave your children wondering why you burdened them with these delays and expenses when they could have been easily avoided if you had done just a minimal amount of planning.

What Is a Will?

A will is a document that is effective when you die, in which you leave your assets to your heirs. You can also use a will for other purposes, such as to provide instructions on how you want to be buried, to disinherit one of your heirs, or to nominate a guardian for your minor children. The person who creates a will is called a "testator" and those whom the will names as beneficiaries are called the "devisees." A will must either be properly executed and witnessed in order to be valid or be a "holographic will" that is entirely in the testator's handwriting and signed and dated by him or her. Once a will is executed, it can usually be changed or canceled throughout the testator's lifetime. Having a will does not avoid probate. A court order for distribution at the conclusion of a probate proceeding will be required before title companies, banks, investment companies and stock brokerages will recognize your heirs as the owners of your estate.

Do I Need A Will?

If you die without a will (a.k.a. dying intestate), the administration and disposition of your assets will be decided by a probate court following the laws of intestate succession in an estate administration proceeding. If you want to control who your assets will go to and how much will go to each one, you will need to create a will. A will is necessary if you want to change your beneficiaries from those determined by law to include those who would not normally inherit if you died without a will. You would also need a will in order to make unequal distributions or specific gifts to a particular beneficiary. A will is also necessary if you want to disinherit a child or other usual beneficiary. 

A power of attorney is a written document in which a person (called the principal) appoints someone else (called the agent or attorney-in-fact) to act on his behalf. A "non-durable" power of attorney terminates when the person who created it becomes legally incapacitated. A "durable" power of attorney, on the other hand, continues to be valid even after the principal becomes incapacitated. If you want to prepare a power of attorney but do not want the attorney-in-fact's powers to become effective until you become legally incapacitated, you can create a "springing" power of attorney. A springing power of attorney becomes effective only upon the happening of an event that you have designated. No matter what type of power of attorney you create, it will terminate when you die.

Why Do I Need a Durable Power of Attorney?

The older we become the more likely we are to develop a mental disease or disability such as dementia. A person suffering from a disabling condition may one day become unable to understand and appreciate the consequences of his/her actions. If this occurs, our legal system may find them legally incapacitated. A person who lacks legal capacity cannot take certain actions or make decisions for themselves. For example, they may not be able to enter into contracts, transfer property, or consent to medical treatment. This can leave the incapacitated person's assets frozen and important health-care decisions unmade. A durable power of attorney allows you to appoint someone else to manage your finances and/or make health care decisions for you when you are incapacitated. It is, therefore, a valuable tool that you can use to prepare for incapacity. Everyone should have a durable power of attorney for financial management and a durable power of attorney for health care decisions. They give you security in knowing that someone you trust will be managing your finances and making health related decisions for you in a way that serves your best interest.

What Happens If I Have Not Given Someone a Durable Power of Attorney and I Become Incapacitated?

No one can take charge of your assets or make healthcare decisions for you without being a court-appointed conservator, if you become incapacitated and have not given someone a durable power of attorney. A conservator is a guardian for an adult, who will be in charge of most, if not all your financial and healthcare decisions. Someone must file a petition with the court to have your conservator appointed, and give notice of the proceedings to your relatives. If the court after a hearing and reviewing all the relevant facts, including the court investigator's report, determines that you are no longer legally competent, it will appoint conservator over your estate and/or person. The conservator will be subject to the continuing supervision of the court and must file periodic reports and accountings. Certain transactions will require the prior court approval after a hearing. The initial appointment can take months and costs thousands of dollars for legal fees and costs, which will usually be paid from your assets.

Can I Use the Power of Attorneys Sold at Stationery Stores?

If properly signed and notarized or witnessed, a power of attorney sold at a stationery store is valid and will authorize your agent do many things on your behalf. However, it is not advisable to use these forms for Medi-Cal planning because they do not authorize the agent to make gifts. The power to make gifts is often needed in order to plan for a person's long-term care in a nursing home. Many middle income families lose their homes and life savings due to the high cost of nursing home care. But many of those families could have preserved their major assets and had their nursing home bills paid for by Medi-Cal, a federally funded health care payment program administered by the state of California. Applying for and planning for Medi-Cal can be complicated. An elder law attorney can help you through the application process and can design a plan for you that will preserve the maximum amount of your assets and income.

The attorneys at the Kisner Law Firm are also elder law attorneys and are trained and experienced in Medi-Cal planning. 

Simply stated, a revocable living trust is a trust that you create while you are alive, which you can revoke (cancel) or change at any time. Revocable living trusts are used to avoid probate, plan for incapacity, make provisions for management of your estate for your spouse and young or disabled children, and to reduce or in some cases, avoid estate taxes.

Why Do I Need a Revocable Living Trust?

A revocable living trust is the cornerstone of any estate plan. There are several advantages to creating one. A revocable living trust avoids the need for probate, along with its high fees and delays. It provides an efficient means of distributing your assets upon your death and provides a way of avoiding a court-ordered estate conservatorship if you become incapacitated. It can also reduce your estate taxes. Thousands, and sometimes hundreds of thousands of dollars can be saved by using the revocable living trust.

Beware of Trust Mills

A living trust for $399.00. Sounds too good to be true. Well, it usually is. Some companies or firms put on seminars at local hotels or meeting rooms, advertising living trusts at low prices. Usually, an attorney will give the presentation and offer you a special deal if you sign up that day. You fill out a questionnaire form and give them your check, which is sent to their computer processing center, usually in another city. Data entry clerks input your information and a computer-generated form living trust is printed based on your responses. Sometimes the final documents are delivered to you by their representative; who may be an annuity sales person, who will then try to convince you to convert your savings, IRAs, 401Ks, stocks, bonds and other investments to annuities. The promise that an annuity will give you is a good return on your money, protecting your estate from creditors thus exempting your assets from Medi-Cal requirements if you need long-term care in a nursing home. Such promises are rarely true, but these annuities generate large commissions that are split with the trust mill that you hired to do your trust. That's where they make their money. Don't rely on these assembly lines to create the best estate plan for you.

For information on a class action lawsuit that was filed in November 2004 by the California Advocates for Nursing Home Reform against certain trust mills, click on the following link: canhr.org - Trust Mill Lawsuit

What Is an Advance Heath Care Directive?

California law requires that you cannot appoint someone to make health care decisions for you in a power of attorney that is for financial matters, usually described as a Durable Power of Attorney. California law allows you to appoint an agent to make health care decisions when you are no longer able, in a document described as a Durable Power of Attorney for Health Care Decisions and provided a form that was approved by the legislature. California law provided for a separate document that allowed you to direct your doctor to withdraw life support if you were in a coma and near death, by a document called a Directive to Attending Physician. The law now provides that both the durable power of attorney for health care decisions and the directive to attending physician will be combined in one approved document called the advance heath care directive.

Why Do I Need an Advance Heath Care Directive?

If you are not able to make your own health care decisions, for example, if you are in a coma, or if you have severe dementia, you cannot give your consent to medical procedures, such as consenting to surgery or other medical treatment. Sometimes doctors and hospitals will look to the immediate family for guidance, but may require medical decisions to be made by your appointed health care agent or court appointed conservator before they will act, especially if there is a conflict among family members. Also, if the person whom you feel should be making the decisions is not your spouse, such person's wishes and directions may be ignored unless you appointed them as your health care agent in an Advance Health Care Directive. No one wants to put their loved ones through additional stress over such matters and does not want them to act contrary to their wishes. The Advance Heath Care Directive is a simple and considerate way of allowing your family to cope with such difficult times.