Older woman working with estate planning attorney

Five Hidden Traps in Outdated Living Trusts

If your living trust is five or 10 years old or more, it might look fine on its face.  But there may be problems hiding within your estate plan that will rear their ugly heads when it is time to put your trust document into action. The time to fix these issues is now, before they cause headaches for your heirs and beneficiaries. 

A California trust attorney can help you update your documents and answer your questions about changes you might need to make. Let’s go over five hidden traps in outdated living trusts. 

State and Federal Tax Laws Change

State and federal laws that can affect the tax treatment of assets are constantly changing. Even in years when the tax code itself does not change, previous changes to the tax law get phased in over quite a few years. In other words, a change to the tax law in one year can make things different every year or so for the next five years or more. 

Your estate planning documents, including your living trust, should strive to maximize the benefits of current tax law. However, since the tax law is a moving target, your attorney may need to tweak your living trust periodically to keep it running optimally. You could view these updates like taking your car in for a tune-up.

Your Assets and Family Situation May Have Changed

Your living trust can only manage and distribute assets that you title in the name of the trust. Think about the assets you had 10 or 15 years ago. How many of those things do you still own? Are all of your current assets part of your living trust?

Some of your assets, like your retirement account, have likely increased in value significantly since the drafting of your current living trust. You will want to make sure that you evaluate the current values of all your assets when considering the fairness of the distributions to your beneficiaries.

The Federal Estate Tax Cutoff is Different

For many people, their estate plan involves trying to minimize estate taxes by engaging in gifting during their lifetime and charitable contributions. You will want to review your living trust in light of the current federal estate tax cut-off and the anticipated changes to the amount of value your estate can have before federal estate taxes apply.

Your Goals Have Changed

What you wanted to accomplish when you initially set up your living trust has likely changed over the years. Let’s say that you had kids in high school when you created your original living trust. Twenty years down the road, you are probably less focused on making sure they can go to college. You might want to re-shuffle the deck to create a longer legacy plan, including providing for your grandchildren. 

Your Marital Status Can Change

After the passing of 10 or 20 years, the marital status of people in your family might have changed. You might have divorced or remarried in that time. One or more of your children or other beneficiaries might have married, had children, or divorced. Your older living trust was a snapshot of your life and the people who were important to you at that time. You will now want to update your trust to make sure it will accomplish your new goals based on your current situation. You should contact a California estate planning attorney to get started. Contact our office today for help, we offer a free consultation.

cryptocurrency symbol

Investing in Cryptocurrency: The Hot Tax and Estate Planning Issues

Investing in cryptocurrency is a trend that appeals to many because banks and governments cannot directly control this asset, and there is a limited level of privacy involved in its ownership and financial transactions that use crypto. The Internal Revenue Service (IRS), however, takes taxation issues of crypto quite seriously.

Also, there are things you need to know if you intend to include cryptocurrency in your estate plan. A California estate planning attorney can answer your questions about investing in cryptocurrency.

An Overview of Cryptocurrency

If you are considering investing in cryptocurrency and leaving it to your heirs in your estate, you need to understand what it is and how it can affect your tax basis.

Cryptocurrency is a type of digital asset that uses cryptography to secure its transactions and to control the creation of new units. Cryptocurrency is decentralized, meaning it is not subject to government or financial institution control. Bitcoin, the first and most well-known cryptocurrency, was created in 2009. Cryptocurrencies are often traded on decentralized exchanges and can also be used to purchase goods and services. 

Some investors hold cryptocurrency as a long-term investment, while others trade it frequently in an attempt to generate short-term profits. When cryptocurrency is held as an investment, it may appreciate or depreciate in value and can be subject to volatility. When cryptocurrency is exchanged for goods or services, any resulting gains or losses could be taxable. As with any investment, you should consult with a tax advisor to determine how cryptocurrency would impact your tax liability.

It is easy to steal cryptocurrency or to lose it forever. Someone merely needs to get hold of your crypto key, the 64-digit code that is the password to your crypto. When someone obtains that password, they then have control over your crypto. Since you cannot access your crypto without the key, if you lose that precious 64-digit code, you have lost the asset itself. You cannot get a new key for the asset. Imagine if you lost your house key, and the result was that you no longer owned your house.

Taxation Issues of Cryptocurrency

Crypto gets taxed just like any other financial transaction with other parties. If someone pays you more than $600 worth of cryptocurrency for services or goods, you have to disclose that on your tax return. If you buy crypto and then sell it at a higher price than you paid for it, you have a taxable gain. 

Crypto has a fair market value (FMV) that can determine the amount of taxes due. Even though the FMV fluctuates constantly, so does the stock market, and buying, selling, and inheriting shares of stock can have tax consequences. 

Including Crypto in Your Estate Plan

It could be challenging to transfer your crypto to your heirs after your death because they will have to get your 64-digit key. You should never include the key code in your will or trust because anyone who sees your documents could steal the asset using the key. If you write the code on a piece of paper and store it in your file cabinet at home, a house fire could destroy your ownership of the crypto.

Your options are to use a “wallet” to store your key code instead of writing your code on paper or giving the key to a friend or relative and hoping that they never succumb to temptation. “Hardware” wallets are physical devices that store your key code, like a USB thumb drive, but those can get lost or be stolen.

Using a secure, cloud-based password storage software is an option, but again, someone must know where to look to access your key. 

Finally, as recent news reports demonstrate, an investment in cryptocurrency could lose some or even all of its value, if the fundamentals of the company issuing the cryptocurrency prove to be unsound.  

You should always seek advice from a licensed financial advisor and investigate any investment before proceeding. But with crypto it’s especially important that you plan even for worst-case scenarios. By diversifying your investments across different types of assets you may best ensure that your assets are preserved, even if some of those investments fail to turn a profit. Talk to a California estate planning attorney about tax questions and adding cryptocurrency to your estate plan. Contact our office today for legal help, we offer a free consultation.

Man working on his estate plan

Under What Conditions Do You Recommend a Revocable Living Trust?

In California, anyone who owns a home or other substantial assets may benefit from executing a living trust.  From tax advantages to avoiding unnecessary court proceedings to providing a safety net during your lifetime to addressing specific needs in your family, a living trust might be the right estate planning paper for you.

A California estate planning attorney can talk to you about your situation and explain the benefits of different types of estate planning documents.

A Revocable Living Trust Offers Many More Options Than a Will

Living trusts can provide opportunities that a will cannot, for example:

  • You may name one or more successor trustees to manage your financial matters during your lifetime, in case you become incapacitated or simply want to go off on an adventure and not be bothered with management of your assets.
  • A living trust can manage your assets and provide for your beneficiaries for many years after your death, unlike a will. For example, if you have young relatives that you want to benefit after your death, their shares may be held in trust until they reach adulthood or even later in their lives, to ensure the assets are used responsibly and protected from their creditors. 

There are many other types of specialized living trusts that could provide valuable benefits for you and your loved ones. An estate planning attorney can discuss the different kinds of living trusts that could be useful in your circumstances.

Living Trusts Allow More Privacy Than Wills

Unless there is a challenge to the document, a living trust does not have to go through probate.  Most trust instruments therefore never become public documents, and their terms may be kept confidential except from your beneficiaries and heirs after you die.

Living Trusts May Help Avoid Costly, Time-Consuming, and Public Probate Court Proceedings

In contrast, a will has to go through the probate process and to be approved and administered by a court after you die.  The court will then oversee the administration of the deceased person’s estate for a period that may take a year or more. If an individual dies without leaving a will or trust, their estate may still have to go through the probate court. A living trust, on the other hand, generally does not need to be filed with the court, so it does not become a matter of public record. If you would like to learn more about how a living trust could be advantageous for you and your heirs, you can talk to a California estate planning attorney. Get in touch with our office today for legal help, we offer a free consultation.

Elderly man working on his estate plan

What Happens if You Don’t File a Probate in California?

If a friend or loved one dies with only a will, or with no estate plan at all, you may be required to file a probate petition before you can take control or possession of that person’s assets. Failing to do so, and taking or distributing the assets without the proper procedures, may lead to penalties and damages that far exceed any benefit you may receive.

If you take control of an estate that is required to go through probate in California, but you do not file the probate case, you could face severe civil and criminal consequences. Not every estate has to go through probate, but most non-lawyers do not understand the factors that determine which estates must be probated.

With so much at stake, you will want to talk to a California estate planning attorney about whether your loved one’s estate has to go through probate and to learn what happens if you don’t file a probate in California. Keep in mind that you may not have to personally do the work of administering an estate.  The law provides that you may hire an attorney to do the job for you, and the fees will come out of the estate, not out of your pocket.

Here are some consequences of not filing a petition to probate a will:

Creditors Will Have Extra Time to File Claims Against the Estate

One benefit of timely filing a probate petition is that the filing may establish deadlines for when the decedent’s creditors can bring claims against the estate.  Creditors generally have just four months to file claims after the court appoints an executor of the will or an administrator of the estate. If you do not open a probate case, the clock does not start ticking right away, and the creditors may have more time to pursue their claims.

You Cannot Open a Bank Account to Pay the Debts of the Estate

Typically, after you file the will with the court, you ask the court to issue letters of administration that give you legal authority to do things like pay the expenses and debts of the estate and get access to the decedent’s accounts and other assets. 

A bank is highly unlikely to give you permission to open an account in the name of the estate to pay claims for the debts of your deceased loved one. Those claims can remain in limbo for some time. Also, creditors may go after you personally for your failure to notify them of the death of your close relative.

You Cannot Transfer the Estate Assets to the Heirs and Beneficiaries

In cases where a probate is legally required, the only way to legally transfer property to the named beneficiaries is to file the will or open the probate with the court and go through the probate process. Just as debts can remain in limbo, the real estate, cars, and other property of the decedent may remain in the decedent’s name until legally transferred.

You Could Be Personally Liable for Expenses of the Estate and Financial Harm to the Heirs

If you take possession of the estate assets but fail to follow through with the proper procedures, then you may find yourself liable for any damages that result.  For example, the failure to pay the expenses of the estate, or to timely transfer assets to the beneficiaries, could cause harm to the estate and to the beneficiaries. Being unable to close out the estate can create increased expenses due to the delay. You might have to pay those expenses personally if your failure to file the will or pursue the probate process caused the delays and increased expenses.

The value of some assets might go down because of the delay in getting those items transferred to their rightful recipients. Those beneficiaries could seek to hold you responsible for the financial hardship you caused.

The Other Heirs Could Have the Court Remove You as Executor or Administrator

If you do not follow California law concerning your fiduciary duties as executor or administrator of an estate, the other beneficiaries could file papers in court and ask a judge to remove you from that role. You might have to provide an accounting of your actions to the judge.

You Could Face Criminal Charges if You Fail to Comply with Required Probate Procedures

In some cases, if a person wrongfully takes possession of the estate assets, or intentionally conceals a will for their own benefit, they can face criminal charges for those actions. Considering the inconvenience and other potential consequences of failing to take a will through probate, or to open a probate where there is no will, it is usually best to talk to a California estate planning attorney about your legal obligations. Please reach out to our office today for a free consultation. We are here to help.

Woman working on estate plan with attorney

Are Special Needs Trusts Always Appropriate?

When planning for a person with special needs, you have more than one option. In some situations, a special needs trust might be a good choice, but in some other circumstances, you might have a better option.

Special needs trusts are sophisticated legal documents that must comply with multiple rules. If you make a mistake, you or the beneficiary might not get the results you hope to achieve. You should consult with a California estate planning attorney about these issues, including whether a special needs trust is appropriate for your or your loved one’s needs.

The Advantages of Special Needs Trusts

Many people with special needs, including those with health issues or who are unable to handle their own financial affairs, may receive valuable government benefits like Medicaid and Supplemental Security Income (SSI) to help provide for their support. These programs may have strict income and asset limitations so that a person with economic means may be unable to qualify for these benefits. If an individual with special needs receives an inheritance, personal injury settlement, or some other windfall, for example, that money could cause them to lose these benefits or have them substantially reduced.  

Such beneficiaries may be left without the health insurance or monthly stipend they receive through these programs, and they may lose or reduce their eligibility for assistance with housing, nutrition, transportation, adult day programs, and other public benefits they would otherwise receive.  

A special needs trust can eliminate this unwanted consequence by providing that the windfall goes into a trust for the person’s benefit, rather than directly to the person with special needs. Since the trust beneficiary does not own the assets, the money will often not count as their income or assets, so they may not lose their eligibility for Medicaid or SSI.  

The Downsides of Special Needs Trusts

Along with the benefits of a special needs trust, there are also some downsides.

For example, after the individual with special needs dies, the assets remaining in the trust may go to the government to reimburse taxpayers for the money spent on the beneficiary throughout his or her lifetime. Other family members or friends may only inherit what little, if anything, remains after the government gets reimbursed. 

Also, if the trust is not set up properly or the trustee uses the assets for a purpose not allowed with these unique trusts, the special needs trust could get voided, defeating the purpose for which it was created.

Alternatives to Special Needs Trusts

There are alternatives to special needs trust, but you should be careful to ensure that those alternatives don’t limit the recipient’s access to public benefits.  

For example, you could create an estate plan to leave assets directly to the person with special needs, but you would need to be sure you consider the potential loss of that person’s benefits. If the gift is substantial, it may in some cases be sufficient to support the person even if they lose their government benefits.  Still, this situation should be avoided if possible, to ensure that the benefits remain available if needed.  

Even if the gift is sufficient to compensate for the lost benefits, it may be best to create a living trust to oversee the disabled person’s financial matters and to reduce the likelihood of someone taking advantage of the special needs individual. Also, this option may allow siblings or other relatives to eventually inherit what the disabled person does

not use. A person with a short life expectancy could be a candidate for this option.

Another alternative to a special needs trust is to leave the disabled person’s portion of the estate to a third party, like a sibling, to hold for the individual with special needs. The danger in selecting this option is that the third party might not use the assets for the disabled person, or might be swayed by another person, such as a spouse or child, to use those assets for their own benefit. Also, unless done carefully and with full transparency, this strategy could be viewed as a fraud on Medicare or SSI, causing a myriad of adverse consequences.

A California estate planning attorney could talk with you about your situation and draft the documents that meet your goals and needs. Get in touch with us today.

Loew Law Group services clients through San Mateo County including the cities of Belmont, Burlingame, Foster City, Hillsborough, Redwood City, and San Mateo, as well as in all Bay Area counties and throughout California. 

Woman going over her estate plan

Is it Possible to Probate a COPY of a Will Without the ORIGINAL in California?

One of the frustrating aspects of handling a close relative’s estate after they die is trying to find all of the essential financial and legal documents. You might find the deceased person’s will, but it might be quite old, making you wonder if it was revoked and replaced by a later will or trust. Sometimes, all that you can find is a copy of the will. The original might be in a safe deposit box somewhere or in a lawyer’s office.

Is it possible to probate a copy of a will without the original in California? This situation is tricky, so it would be best to seek the advice of a California estate planning attorney on how to proceed.

The General Rule in California When You Cannot Find the Original Will Document

Most states follow the general rule that the court will presume that the original will was destroyed or revoked if the family or person administering the estate cannot find the original document. California Probate Code § 6124 (CA Prob Code § 6124 (2020)) lays out how California approaches this issue:

“If the testator’s will was last in the testator’s possession, the testator was competent until death, and neither the will nor a duplicate original of the will can be found after the testator’s death, it is presumed that the testator destroyed the will with intent to revoke it. This presumption is a presumption affecting the burden of producing evidence.”

Like many other legal presumptions, however, this presumption is rebuttable. In other words, it might be possible to convince the probate judge that the decedent did not destroy the will and that the copy you found is, indeed, the most recent will of the deceased, and was not revoked or modified by any later wills, trusts, or codicils.

What Happens if the Judge Refuses to Accept the Copy of the Will

If the judge is not convinced that the copy of the will accurately represents the decedent’s actual final wishes, the court may find that the deceased person died intestate. Dying intestate means that a person did not have a valid will or trust at the time of death.

In that event, California’s laws of intestacy, not the decedent, will decide who gets the deceased person’s estate and in what proportions. Here are a few things you might want to know about intestate succession in California:

  • Intestacy can apply to a deceased person’s entire estate or any portion of an estate that does not get distributed through the decedent’s will, trust, or another legal device like making a bank account “payable on death” or naming someone as the beneficiary of a life insurance policy.
  • The intestate share of a surviving spouse in the decedent’s community property is half of the community property that the decedent owned.
  • If the intestate deceased person did not have any surviving children or other issues, or any surviving parents, siblings, or issue of a deceased sibling, the surviving spouse may receive the entire intestate estate.

A California estate planning attorney can help you deal with the many situations that can come up during the administration of an estate, whether the decedent left a valid will or trust or died intestate. Contact our office today for a free consultation.

Loew Law Group services clients through San Mateo County including the cities of Belmont, Burlingame, Foster City, Hillsborough, Redwood City, and San Mateo, as well as all Bay Area counties and throughout California.

couple estate planning with life insurance

What is Palliative Care? Planning for Future Medical Needs

Palliative care is often referred to as pain management or comfort care and is an option that many people choose as part of their end-of-life care plan. 

Hospice and palliative care are similar, but not the same.  Hospice care is typically provided at or near the end of a patient’s life.  However, a patient may receive palliative care at any point during an illness or after an injury, at any stage of one’s life, and not only at the end of life.

A California estate planning attorney can help you include the option of palliative care in your estate plan. Let’s discuss palliative care and planning for future medical needs. 

An Overview of Palliative Care

Palliative care seeks to improve the quality of life for people with medical conditions that cause ongoing discomfort. For example, pain management may be just one type of palliative care. The specific services a person could receive as part of palliative care will vary depending on the individual’s situation. 

While the goal of palliative care is not necessarily to try to cure the person’s illness or injury, improving a patient’s comfort and quality of life can help to restore some normalcy to the individual. Sometimes, healthcare services designed to cure or improve the individual’s medical condition can improve their comfort. For example, certain types of physical therapy can improve range of motion, strength, and mobility, which can improve a person’s quality of life.

How Palliative Care is Different from Hospice

People often use the term palliative care as a synonym for hospice, but they are not identical. Here are some of the most significant differences between hospice and palliative care:

  • Hospice generally is available only to patients whose diagnosis gives them a likelihood of living less than six months. The goal of hospice is to help the patient be as comfortable as possible during their remaining time of life. You do not need to be terminally ill to receive palliative care.
  • Hospice services do not include curative care, in other words, treatments designed to try to cure the underlying disease. While palliative care does not focus on curative treatments, palliative care does not exclude curative treatments. 

Depending on the details of the specific hospice or palliative care program, there could be additional differences between the two.

Estate Planning Can Help You Exercise Control Over Receiving Palliative Care 

Many insurance policies cover hospice care. Also, Medicaid and Medicare provide some hospice services. Palliative care is a specialty that is only recently receiving the attention it deserves, so not all insurance policies cover these services. A few Medicare plans provide some coverage for palliative care. 

People with medical conditions that cause chronic pain and discomfort might not have coverage for palliative care because they are expected to live longer than six months. Insurance might pay a portion of some palliative care services or prescription drugs, but comprehensive coverage of palliative care has not yet arrived for most people. It can be a challenge to have an acceptable quality of life in this situation.

In addition to standard estate planning documents like a will or a living trust, you might want to consider having your lawyer draft a durable power of attorney that authorizes the person you name as your attorney-in-fact in your power of attorney to obtain palliative care if you are unable to communicate that wish for yourself at some point in the future. Your California estate planning attorney may be able to help you to choose an insurance plan that provides palliative care, to make a financial plan for palliative care, and to engage in Medicaid planning that could help you qualify for benefits to help pay for your medical care. Contact our office today for legal help. We offer a free consultation.

Older woman sitting with estate planning attorney

Determining The Medicaid and Medi-Cal Snapshot Date — How Does Medicaid Do It?

The Medicaid “snapshot” date applies to married couples when only one spouse applies for Medicaid assistance with the cost of long-term care. Medicaid (also known as “Medi-Cal” in the State of California) calculates the assets of the married couple as of the snapshot date to determine eligibility for Medicaid benefits. 

This article explores the concept of determining the Medicaid snapshot date – how does Medicaid do it? 

A California estate planning attorney can explain how you might be able to qualify for Medicaid help with long-term care expenses.

An Overview of the Medicaid Snapshot Date

The spouse seeking long-term care Medicaid could be needing in-home, community-based, or nursing home care. The snapshot date can predate when the person gets admitted to the nursing home. In other words, the snapshot date has already passed before most people realize they will need help with the cost of long-term care. 

For example, if an individual applies for Medicaid benefits and services they will receive in their home or in the community, the snapshot date is usually the date of the Medicaid application. Sometimes, however, Medicaid will use the date on which the person had a functional needs assessment to find out if the individual meets the functional requirements for eligibility.

When a person applies for Medicaid benefits to help with the cost of nursing home services, the snapshot date could be on one of several dates. The individual had to have been an inpatient at a hospital or nursing home for at least 30 days without going home before they may be eligible for Medicaid long-term care. If a patient is directly admitted from a hospital to a nursing home, Medicaid will add the days of the hospital stay to the days at the nursing home.

How the Snapshot Works

The applicant for Medicaid long-term care will have to fill out an asset declaration form and financial documentation. The forms must provide sufficient details about the value of all assets owned by the applicant spouse and non-applicant spouse as of the snapshot date.

Medicaid will then add up the total countable assets of the couple. Not all assets count for purposes of Medicaid eligibility. When one spouse continues living in the community, that “community spouse” gets credited with having more than half of the assets of the couple, making it easier for the long-term care spouse to qualify for Medicaid.

The government agency will calculate the Community Spouse Resource Allowance (CSRA) so that the community spouse does not have to become destitute to pay for the other spouse’s long-term care. In California, the asset limits are $2,000 for the long-term care applicant and $137,400 for the non-applicant spouse if the applicant will receive Medicaid benefits and services in an institutional or nursing home setting.  

Remember, not all assets count toward total assets for Medicaid eligibility. In California, the asset limits are the same for Medicaid waivers to receive in-home or community-based long-term care services. We understand that these Medicaid and Medi-Cal rules and calculations are confusing. You do not have to learn all the details and loopholes for yourself. A California estate planning attorney can help you navigate Medicaid and Medi-Cal long-term care issues. Get in touch with our office today for legal help, we offer a free consultation.

Man signing estate plan document for his business

Estate Planning Guidance for Small Business Owners

Small business owners must often incorporate their estate plan with a business succession plan. Having an estate plan ensures that your wishes for your business are carried out after your death. Whether you want to pass the business to another person or liquidate the business, our California estate planning attorney can help you identify your goals and draft an estate plan that meets those goals.

Deciding What Happens to the Business After Your Death

The first step is to decide what you want to do with your business after your death. If you are a sole proprietor, you can choose to either pass the business to another person or to close and liquidate the business upon your death. However, if you have partners or co-owners, they may not want to shut the business down after your death.

Your business operating agreement and the documents filed to create your business should address what happens to your interest in the company upon your death. In some cases, you may pass your interest to your heirs. However, the corporate documents might dictate that the co-owners or the company may purchase your interest in the business from your estate.

A buy-sell agreement is one way to handle your interest in the business upon your death or disability. The buy-sell agreement allows co-owners to purchase your interest in the business. The proceeds from the sale pass through your estate according to the terms of your Will.

However, if you intend to leave your business to your family or other heirs, you will need a business succession plan. A business succession plan designates a person or persons to take over your business after your death or if you become incapacitated. The plan is a detailed roadmap for preparing family members or others to take over the company and address other legal matters.

Considering Tax Consequences for Your Estate and Family

Another critical component of estate planning for small business owners is tax planning. You do not want your estate or heirs to be burdened with estate and gift taxes after your death. An estate plan can help you reduce or eliminate taxes. You might want to consider using a trust to hold your interest in the business. 

The assets of a trust pass to the trust beneficiaries outside of probate. Depending on your situation, you could create a trust that continues after your death. An estate attorney can help you explore the various options for protecting business assets before and after your death. 

Consider Purchasing Additional Life Insurance Coverage 

Life insurance is an essential consideration for anyone. However, a small business owner needs to consider whether the business can support their family after their death. If you are the key person that operates your business, the company may not generate enough income without you to support your family. 

Purchasing additional life insurance coverage can provide your family with immediate resources to pay living expenses after your death. The insurance proceeds can bridge the gap between your death and finalizing the business transfer. 

Contact Our California Estate Planning Attorney for a Free Consultation 

Estate planning is important for everyone, but especially for small business owners. An estate plan ensures that the business you created can continue to provide for your loved ones after your death. Protecting your business assets preserves your legacy for future generations. Contact our office to schedule a consultation with an experienced California estate planning attorney.

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How to Create an Estate Plan Suited for Unmarried Partners

Under California law, domestic partners have all of the same rights as a married couple.  However, if you and your partner are not married, and not registered as domestic partners, you will need to be especially careful that your estate plan is in place to carry out your wishes when you die, or if you become incapacitated.  

A California estate planning attorney can explain how to create an estate plan suited for unmarried partners and draft the documents you need.   

Unless you are married to your partner, or registered as a domestic partner with the State of California, you may find that California law considers you and your unmarried partner to be “legal strangers” for purposes of estate administration. No matter how deeply you care for your partner, if you and your partner are not married, and not registered as domestic partners with the State of California, the only way your unmarried partner can receive any of your assets or other protections is if you make that happen. The law will not do that for you.

Wills and Trusts for Unmarried Partners

If you do not have a will or living trust, your unmarried partner will not receive anything from your estate when you die. People who do not leave a will or trust behind die intestate, which means that California intestacy laws will control how their assets get distributed. An intestate estate goes only to your blood relatives and surviving spouse or domestic partner if you have one.

You will need to create a will or trust for your unmarried partner to inherit from you. Either one can work for this purpose. One consideration in choosing between a will and a trust is privacy. A will must be filed with the probate court after you die, so it becomes a public record. A trust does not usually get filed in court, so you have greater privacy concerning the distribution of your assets.

An important thing to note is that if you were married to someone other than your current partner and you separated from your legal spouse but did not finalize the divorce, your legal spouse will have a claim on your estate whether you die intestate or with a will or trust. You should discuss this issue with your estate planning lawyer if you are in this situation.

Powers of Attorney for Financial Matters and Healthcare Decisions

You will want to make a Durable Power of Attorney that gives your unmarried partner the legal authority to manage your financial matters if you become incapacitated if that is the person you select for that function. Otherwise, your partner would have to get a court order, which your family might contest.

You can name your unmarried partner as your medical decision-maker if you become unable to do so for yourself. You will want to include a medical records authorization and written instructions for your healthcare providers that allow your partner free access to visit you in the hospital or long-term care facility. Some families have blocked a partner from seeing the other partner in the hospital because the relative did not approve of the person’s lifestyle choices.

Beneficiary Designations

It can be useful to make a list of all your financial accounts and review the beneficiary designations. In a committed relationship, you might want to make your unmarried partner the beneficiary of your life insurance and retirement accounts. Bank and investment accounts can transfer automatically upon your passing by adding transfer on death (TOD) or pay on death (POD) instructions to the accounts. Your financial institution can provide the forms for this account change. A California estate planning attorney can craft an estate plan for unmarried partners to help you meet your goals and needs. Get in touch with our office today for a free consultation.