Estate Planning Documents
SOME THOUGHTS, ABOUT ESTATE PLANNING, FROM DAN:
I'm a big fan of getting your ducks in a row regarding estate planning. If you own real estate (such as your own personal residence), my personal preference is to have a revocable living trust so that your real estate can avoid the probate process, someday, when you pass away. If you choose to do that, I suggest that you have an entire estate plan prepared - including the revocable living trust, a pour-over will, a financial power of attorney, an advanced healthcare directive, etc.
I do not provide legal advice, but I highly recommend being skeptical about the attorney you work with. I'm going to go ahead and make a bold statement that any "true" estate planning attorney would agree with: Most lawyers don't prepare estate planning documents very well. There; I said it! Quite honestly, quality and price are the most important things to look for. I know a few attorney's who have a great personality, but their documents are terrible. I also know some attorneys who are a bit abrasive or come across in an arrogant way, but they have awesome documents and good prices. No matter what, if you're looking to complete, update, or restate your estate plan, you should use an attorney who specializes in estate planning, and not just one that says they know how to do it. I would never go to We The People or LegalZoom, etc. I would also be cautious about using any attorney that you know just because you know them - unless they specialize in estate planning. IT'S THAT IMPORTANT! I have a couple of attorneys that I recommend in the Santa Clarita, California area and also in Auburn, Washington. Please let me know if you'd like their contact information.
The cost of an estate plan can be all over the board. I know a couple of attorneys that charge almost $8,000 for a basic estate plan, and that's WAY too much! There are also some firms that will do it for around $1,000 but I know what it takes to do it right and, quite honestly, that price is too low and it'll show in the quality of the plan. Many estate planning attorneys will ask questions about your assets (a very normal part of your first meeting) so that they know what type of estate plan you may need and what may need to be funded into the trust. But I also know some attorneys that will base what they charge you on how much you have in the bank. If you have a lot of liquidity, they'll raise the price. The bottom line is that, if an estate planning attorney is doing it the right way, he or she will charge based on the complexity of the estate plan - such as are you single or married, how many pieces of real property do you own, will you need a special needs trust, do you have minor children, etc. At the time of this writing, depending on your situation, the cost for a quality estate planning attorney to help you complete a fairly typical estate plan should be somewhere between $3,000 and $4,000.
If you're seriously considering having your estate plan prepared or updated, you can feel free to contact me, if you like, so I can give you some thoughts on the subject and point you in the right direction so it gets done right the first time. I've been around the block (many times) regarding estate planning and, if you're going to spend that kind of money, I want to make sure you have a heads-up on a few important things. Having said that, here are a few additional notes that may help:
HOW TO FIND AN ATTORNEY: If you live in an area far away from the attorneys that we recommend, then you'll need to find one near you. Please keep the above notes in mind when doing so. Remember, quality of documents and price are both key. The best way I've found to do it is to do some research on the internet. Just go to your favorite search website and type in "estate planning attorneys near me" and see what pops up. It's also helpful to check their Yelp reviews. Make sure they have plenty of people reviewing them and that they've received high marks - such as 4 stars or more. It's important to take plenty of time to do your research. Check out the law firm websites. If their website says they do estate planning PLUS dog bites, divorces, accidents, etc. - then you know they don't specialize in estate planning, and then you may want to cross them off your list. Once you've narrowed it down to a few law firms near you, you can simply call them and do a quick phone interview to see if you'd like to take it to the next step and do a consultation. A few important questions I would recommend are 1) Do you practice any other type of law in addition to estate planning? (Hopefully, they say "no.") 2) What is the approximate cost of an estate plan (single or married) with a living trust, pour over will, advance healthcare directive, financial power of attorney, etc. You'll probably also need to tell them how many pieces of property you own because that'll most likely affect the price, as well. If they say they can't give you an approximate cost over the phone, then press them a little and just say you want a ballpark figure. Hopefully, the cost falls into the figures that I stated above - or at least close.
FINANCIAL (GENERAL DURABLE) POWER OF ATTORNEY: This is an important document to have because it will name an agent to help you take care of anything financial if you became incapacitated or incompetent. There are two basic types: SPRINGING (where the document comes into play only after a doctor (or two) says you're incapacitated) and IMMEDIATE (where the document takes affect immediately) - but that doesn't mean you need to use it immediately.) I'm a huge fan of IMMEDIATE POAs because it's oftentimes very hard to get a doctor to sign off on someone being incapacitated. They take on liability if they do that and it can, sometimes, take a very long time for them to sign off - if ever. If you get an IMMEDIATE POA, you don't even need to give it to your agent, or use it. You can just tell them where it is in case it's needed someday. This will ensure that you won't have to wait a long period of time for your agent to be able to help you. There are pros and cons to everything and you certainly need to be able to trust the agent of your POA, but, more often than not, an IMMEDIATE POA is a great way to go if you feel comfortable with it!
OTHER AREAS OF CONCERN: 1) Should your trust own your bank accounts or should you just add beneficiaries onto them to avoid probate? People do it both ways and there are pros and cons both ways. 2) Do you really even need an IRA trust? Usually not. 3) Should you allow gifting to occur for Medicaid/Medi-Cal planning? If you like. 4) Should you make the trust the owner of all of your assets, or is it okay to just list beneficiaries on them to avoid probate? There are pros and cons both ways and people do it both ways. Your estate planning attorney should certainly address all of this but, again, feel free to contact me, as well, and so I can help you on your way with it. After all, we're talking about everything that you own and everyone that you care about!
For people who do not own real estate or may just be starting out in life, you still need an estate plan, but it probably doesn't need to be as elaborate. You can avoid probate, in most cases, on all of your accounts by adding beneficiary designations to every account including checking, savings, CDs, money market, investment accounts, IRAs, 401(k)s, 403(b)s, annuities, life insurance, etc. They key is that you have to do it and you have to make sure it stays up-to-date and accurate. However, in addition to beneficiary designations, you should still have a few other documents, such as a last will and testament, a financial power of attorney, and an advanced healthcare directive.
Below are some California generic estate planning documents that may be of help to you. These documents are recommended, by some California estate planning attorneys, for a simple estate plan. You'll need to fill in the blanks and then get notary seals and/or witness signatures where required. Remember, I do not practice law or give legal advice so, to cover my own tail end, I will also go ahead and suggest that you consult a qualified estate planning attorney to make sure that these documents are appropriate for you. These documents are only posted here as a courtesy. Here they are:
California Advanced Healthcare Directive - CLICK HERE
California HIPAA Form - CLICK HERE
California Last Will & Testament - CLICK HERE
California Last Will & Testament Q&A - CLICK HERE
California Financial Power Of Attorney - CLICK HERE