Four Estate-Planning Documents You May Need Today

Everyone needs an estate plan to protect themselves, their assets, and their loved ones. Without an estate plan, state laws and probate judges will make sensitive and important decisions for your loved one after your death. Our California estate planning attorneys typically recommend that individuals consider executing at least four basic estate-planning documents (and often five, if a trust is advisable) to protect themselves and their families.

Four Basic Estate-Planning Documents Everyone Needs

1.  Last Will and Testament and Revocable Living Trust

Regardless of your financial situation, marital status, and family situation, you need a will. A will is the basic estate planning tool that ensures your property is distributed to the individuals or organizations you choose after your death. Without a will, California’s intestate laws make these decisions for you. Also, a will allows parents to name a guardian for their minor children.  Keep in mind, however, that a will alone cannot keep your property out of probate court following your death. Nor does a will offer the best protection for you and your assets if you’re incapacitated. If you have substantial assets, including real property, you will likely need to execute a revocable living trust to protect your heirs from lengthy and costly probate proceedings and to ensure that minor beneficiaries, and other beneficiaries with special needs, inherit your assets in a trust to best protect their well-being.  Our California estate planning attorneys will help you analyze how you and your heirs may benefit from your execution of a revocable living trust to hold your assets.

2.  Financial Power of Attorney

A durable power of attorney appoints an individual to act as your agent regarding financial matters and is important to have if you are ever incapacitated or otherwise unable to access your own funds. Your agent has the authority to transact business in your name, including but not limited to selling/purchasing property, opening/closing financial accounts, making investment decisions, filing/settling lawsuits, and entering contracts. The “durable” section of a power of attorney states that the authority given to your agent is not affected by your incapacity.

3.  Beneficiary Designations

Some assets do not pass into your trust or probate estate. Examples of assets that are typically not probated or transferred into your trust include life insurance policies, most retirement accounts, and some investment or financial accounts. You need to designate a beneficiary who inherits the property directly upon your death. Failing to designate a beneficiary typically means your estate receives the asset to distribute according to your will or the state’s intestate laws, which may be contrary to your wishes and may have adverse tax effects.

4.  Advance Health Care Directive or Medical Power of Attorney 

An advance health care directive or medical power of attorney gives an individual the authority to make medical decisions for you if you are unable to do so yourself. A medical power of attorney prevents the court from making health care decisions for you or choosing someone whom you may not agree with to make these decisions for you.

These documents, sometimes called a “living will,”  also deal specifically with end-of-life and life-sustaining medical procedures and treatment. For instance, if you do not wish to have a feeding tube inserted if you are terminally ill, you can direct your doctors not to do so in a living will or medical directive. You can also name someone to carry out your wishes regarding life-sustaining care. These documents can remove a substantial amount of stress off your family’s shoulders as they try to decide whether to “pull the plug.” If you’ve executed a health care directive, they do not need to guess whether you want life-sustaining medical care or not.

Contact a California Estate Planning Attorney for Assistance

If you have questions about an estate plan or about any of these estate-planning documents, talk with our California estate planning attorneys today. Our attorneys can give you advice and guidance based on your unique situation, needs, and goals.