Estate Planning

Orange County and Los Angeles County Spanish speaking Law Firm in California

 

What is an estate?

An estate is everything you own, such as your home, car, life insurance, money in checking, savings and investment accounts, personal property, etc.

What is estate planning?

Estate planning is the process of making decisions while you are alive about how your estate will be distributed after your death; i.e. whether they will go to your spouse, children, charities, etc.

Why should I make an estate plan?

If you do not have an estate plan, the laws of the state where you reside will dictate how your property will be distributed to your heirs.  Without an estate plan your wishes will not be fulfilled.  

A estate plan is also important while you are alive.  If you become mentally or physically incapacitated, a estate plan will allow you to designate someone you trust to make decisions on your behalf instead of leaving it up to the courts to choose that person for you. 

What are the most common estate planning tools? 

What is probate?

Probate is the legal process by which the state court oversees the distribution of the assets of a person that dies without a trust. 

A will

What is a will? – A will is a legal document describing how you want your assets to be distributed when you die. 

A will has to be registered with the court and undergo a legal process called probate. 

If you have a will, the executor of your will is appointed by the court to deal with your assets in probate court. 

What is a trust?

A trust is also a legal document that describes how you wish your assets to be distributed upon your death. However, unlike a will, a trust avoids the probate process.

If you have neither a will nor a trust, an administrator of the estate will be appointed by the court. 

Can I change my will? Yes, wills can be changed during your lifetime as long as you are not mentally incapacitated.

How does a trust/living trust work?

You, the creator of the trust, create a document describing how you want your assets to be distribute when you die and designate a person to be in charge of carrying out your wishes. In a trust you remain in control of your assets until you die. 

A trust avoids probate! 

Can I change my trust?

Yes! The most common type of trust is called a revocable living trust. In a revocable trust, you, the creator, can make changes at any time during your lifetime. 

Durable Power of Attorney

A legal document that allows you to designate a person you trust to manage your financial and personal affairs in case you become mentally incapacitated.

Advanced health Care Directive

A legal document that allows you to designate a person you trust to make medical decisions for you in case you become mentally incapacitated.  A health care directive also allows you to give instructions on how you wish to be medically treated in case you are terminally ill.

Living Trust vs. Will: What’s the Difference?

Should I create a will or a trust?

The decision on whether to choose a will or a trust depends on various factors. Wills are less expensive in the short term, but they do not avoid probate court, and therefore the distribution of assets will still be overseen by the state so the expenses will be incurred after you die.

Going through probate involves hiring a probate attorney to help you navigate the court system and can become very expensive. A trust, on the other hand, avoids probate and court control of your assets. 

Although a trust is initially more expensive, is the best along term solution.

Power of Attorney. (POA) 

 A legal document that allows you to designate a person you trust to manage your financial and personal affairs on your behalf.  A power of attorney can be general or limited.  Also, a POA can take effect immediately or when you become incapacitated, or are for some other reason, unable to take care of your personal and financial affairs. 

 

Advance Health Care Directives (AHCD)

A legal document that allows you to make specific. Written instructions for your future health care in the event that you become incapacitated and cannot speak for yourself. An AHCD also allows you to appoint a person you trust to have the legal authority to make health care decision for you if you are longer able to do so. 

Guardianship

Guardianship is an important legal tool that allows a responsible adult to request custody of a minor when his/her parents are unable or unwilling to care for this minor.  The process entails a court proceeding in which a judge appoints a guardian based on several considerations: A petition for appointment of guardian; the parent’s wishes; a court investigation; the child’s best interests.  Once appointed by the court A guardian has the legal right to make decisions on behalf of the child. 

Nomination of a Guardian

 

A estate planning legal tool that allows you to designate who you would like to take care of your child when you pass away or become unable to care for your child.  The person you designate will still need to petition the court to award legal guardianship, but nominating guardian is a way to make sure the court knows you wishes.

 

Adoptions. 

 

The legal process of establishing a legal parent-child relationship when the adopting parent is not the child’s biological or birth parent.  In California, adopting parents must be at least 10 years older than the child they are adopting, with the exceptions of stepparents or relative adoptions. The adoption process requires a home study by the county’s Department of Children and Family Services, criminal background checks and a court hearing before a judge.  

Important information for Medical recipients: In January 2016, Governor Jerry Brown signed Senate Bill 833 which included provisions to the Medi-Cal estate recovery program.  Now low-income individuals will no longer have to fear losing their homes as a result of the Medi-Cal Estate Recovery. SB 833 reduces the future scope of California’s Medi-Cal Estate Recovery against the estate of deceased Medi-Cal participants, who die on or after January 1, 2016.  SB 833 will also ensure that the Estate from which the state can recover will be limited to the probate state, thus living trusts and joint tenancies will not be subject to recover. 

 

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