Toward "Solutions"
1. A Will or a Living (or Revocable) Trust will see to it that when you die everything you have (your estate) goes to the folks who you want to have it, and NOT to anyone else.
What Does a Will Provide?
A Will provides that the person who creates and executes it, the Testator, has control over who gets what. When someone dies everything s/he owns (her estate) goes to the people s/he wanted to remember (the named beneficiaries of the Will), and NOT to anyone else.
If a person dies without a Will, s/he is said to die intestate. This means that the laws of intestacy in the state in which s/he lives, determine who gets all of the deceased person's assets not otherwise titled. Persons who are named the (designated) beneficiary, for example on life insurance or an IRA, or with whom a home was held in joint tenancy, or someone named in trust for as on bonds or a bank account will still inherit these specific assets. Someone who is not named as a beneficiary in a Will, or as a joint tenant on a property deed, or in trust for on a bank account could watch all the property belonging to the deceased person go according to the laws of intestacy: to his or her spouse and/or children, to parents, to grandparents, to siblings, to aunts, uncles or distant cousins, or even to the State. With a properly written will, the property will go to the person named the beneficiary in the Will, and not to anyone else under the laws of intestacy.
Where There Are Minor Children
Wills are the only form of testamentary document in which a guardian for a minor child may be nominated, where a testator may leave instructions about the child's education and residence and what should be done in the event of that child's illness. The Guardian nominated in the Will must still be appointed by Court order.
If You Have Pets or "Companion Animals"
For many people of all ages, pets are wonderful companions.
We care for them as we would children; and like children, their needs will continue evene if we are no longer able to care for them, either because we are too incapacitated, or after our deaths. Have you thought of what will happen to your companion animals if something happens to you? When you meet with your attroney to plan your estate, be sure to discuss these "other" family members. A skillful attorney will draft your Will or your Trust to ensure that they will be cared for in the style they are accustomed to with assets you allot to them specifically and by persons you trust.
Why Have a Revocable Trust?
The most common form of trust is called a revocable or living trust. It is called revocable because the trustor, the person who creates the trust, may revoke it at any time while s/he is still living and has legal capacity. Once someone dies, however, the trust becomes irrevocable, that is, its contents may not be changed. Like a will, a trust provides for an orderly distribution of a person's assets upon death. The immediate benefits of a trust are the time and expenses saved by not having to go through Probate, a court-controlled, orderly series of steps which must take place if one dies with or without a Will.
Trusts are usually much lengthier and more detailed documents and thus cost more to execute than wills. However, trusts may provide a decedent's estate with cost-saving benefits. It's a good idea to ask an attorney to compare trusts and wills for you. After providing the attorney with necessary information, s/he will be able to determine the most effective document for carrying out your wishes.
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Trusts and Incapacity
A trust also has incapacity language which may become effective before the trustor's death. Should a trustor become for whatever reason or however long unable to properly manage the estate (property, finances, benefits), a named successor trustee may step in and exercise those powers enumerated in the trust (powers of the trustee). Because of the extent of these powers, the trustor clearly needs to designate a successor trustee whom he/she trusts to make decisions in his/her best interests.
2. A Durable Power Of Attorney For Property/Finances will ensure that, should you become incapacitated whether for a short term or progressively until death, someone you trust will have the authority to: transact or terminate your business; make sure you can stay in your house or rent it out for you, or sell it, as needed; pay your bills, collect your pension and/or Social Security, monitor your IRA, make "gifts" to your children, arrange your insurances, pay your taxes, monitor your Medicare, apply for Medi-Cal, etc.
An immediate power of attorney is effective as soon as the principle signs it. A springing power of attorney is effective only upon the occurrence of some event or upon the determination of the principal's incapacity (by 2 physicians, for example).
A durable power of attorney provides that the document is effective even after the person who has executed it no longer has the capacity to do so: it is durable. There is a California Statutory Short Form Durable Power of Attorney which may be purchased at a stationery store; the principal checks off or initials those powers which he authorizes his agent (attorney in fact) to carry out. There is also much longer, more comprehensive and detailed attorney drafted power of attorney. For purposes of estate planning, you will want either an immediate or a springing Durable Power of Attorney. There are Advantages and Disadvantages to each of these.
(There are other types of powers of attorney. For example, a specific power of attorney may authorize someone to sell your home for you while you are in Europe. That is the full extent of the authority granted. By comparison, a general power of attorney gives many more authorities to the named attorney-in-fact.)
3. An Advance Directive For Health Care will ensure that all of your health care needs and desires, including your wishes for "heroic" medical measures or none at all (DNR), are carried out and monitored by someone you trust when you can not or no longer make those decisions or communicate them to health care providers. You may limit or expand the basic authorities given your health care agent to include contracting with and paying for alternate therapies, controlling who is allowed to visit you; and, finally, receiving and disposing of your body as you wish, seeing to burial or cremation. (Caveat: this agent does NOT have the authority to access your money to pay for these; only the agent for the above DPAP/F has those powers).
Without a Living Trust, or Durable Powers of Attorney and an Advance Health Directive, you could wind up needing a Conservatorship.
4. What Is A Conservatorship?
A Conservatorship is a court controlled legal relationship between a conservatee (the person being conserved because s/he can no longer care for her person and or her finances) and a conservator (the person appointed by the court) under the guidance of an attorney (for the conservator) and the state and local rules of a Probate Department in a State Superior Court. The cost to an estate for a conservatorship can be very great. Among other expenses, a conservator is paid an hourly rate (currently $75/hr in San Francisco) to manage the conservatee's financial affairs: pay bills, do banking, handle taxes, take care of property, insurance and taxes (conservator of the estate); make medical appointments and arrange for transportation to appointments; see to necessary home care and coverage, including meals (conservator of the person).
Sometimes a family member, a friend or a partner is appointed as conservator; often, however, there is no such person available for these numerous tasks, or a court may determine that a professional conservator is needed even where one is available. Even if a family member is appointed as a conservator, an attorney must still be hired to guide the conservator and report to the court at regular intervals, at an attorney's hourly rate. The way to avoid this cost and the possible handing over of control of one's person and assets to a court-appointed conservator and an attorney is very simple: execute powers of attorney.
Even if someone is presently health and has capacity to do all these things, something as unexpected (and ordinary) as a fall or sudden illness or a car accident could render a person incapacitated. Without having appointed an attorney in fact, that person may well end up under a conservatorship.
5. California Unmarrieds, Singles And LGBT People Should Check Out Changes In The The Domestic Partnership Laws
AB 205, signed into law by Governor Gray Davis in 2003, became effective on January 1, 2005. The regulations under AB 205 changed certain legal relationships between existing registered domestic partners. Registered domestic partners now have the same rights and obligations between themselves as do married spouses under California law, with only limited exceptions. Registered domestic partners are now subject to some California community property laws retroactive to the date you registered as domestic partners. Also, after January 1, 2005, in many if not most cases, a court procedure comparable to dissolution of marriage is required in order to terminate a registered domestic partnership.
People who are or wish to become registered domestic partners in California are strongly advised to see an attorney to discuss their legal rights and responsibilities under AB 205.
6. Check Out Long-term Care And Disability Insurance. Nothing can eat up your fortunes as quickly as a disabling accident or the need for a nursing home or in-home health care. After a brief stay, MEDICARE will NOT cover the cost of a nursing home bed.
Long-term care insurance will probably not be available once someone has been determined to have dementia or Alzheimer's disease!
Also, see Medi-Cal
7. Having And Holding Property whether as a single person or as an unmarried couple needs closer attention than it's usually given when buying property together, or wanting to "share" the property owned by one of you. Learn about the various advantages and disadvantages of holding property with someone to whom you are not married: Joint Tenancy; Tenancy in Common. There are potential tax consequences to each title.
8. Living Together Contracts are necessary in order to regulate unmarried domestic lives. Unmarried couples should draw up a living together agreement early on in the relationship; you may amend it over time. This is especially important where there are differences in wealth, income, property holdings ; how you pay for the things you purchase; and your monthly/annual household expenses. A "living together agreement" helps you break up with less financial and legal hassling.
9. Financial Security Is Often Overlooked between unmarried partners, and among singles as well. Read a little to learn what the issues are, and see a financial adviser if only to put your "estate" into perspective. Unmarried couples may either suffer the consequences of the Tax Code and traditional insurance products, OR take advantage of both. Unmarrieds do not get each other's Social Security at the death of a partner, as do married couples; and some retirement benefits (government employees) are marriage-bound as well. Check out life insurance policies to take care of your lover or loved one(s) upon your death.