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Estate Planning Checklist for Californians: How to Live & Die with Confidence

Creating an estate planning checklist is a smart way to ensure your interests are covered during life and your stuff goes to your desired beneficiaries on death

Time to Pull the Trigger

You’ve been meaning to get your estate affairs in order for some time now. It’s been hard to pull the trigger though. The problem. You’re unsure what you need. Further, you don’t know who to trust. The law’s confusing and constantly changing too, so you can’t do this alone. You need to do something, but don’t know where to start. You need an estate planning checklist to keep it straight. What should your estate planning checklist include? Your estate planning checklist needs to include documents that protect your interests during life (in the event that you become incapacitated) and on death.

A typical comprehensive estate planning checklist for the average Californian includes the following five documents: durable financial power of attorney, advance health care directive, living trust, will, and certified abstract of trust. Let’s take a closer look at each of these “estate planning checklist” documents to understand how your interests will be protected during life and after death by execution of the same.

Key Estate Planning Checklist for Life & After-Life

The key to creating the right estate planning checklist is to ensure the documents cover your interests during life and after deathSome documents cover your interests during life. Others are necessary for after-life. Creating an estate planning checklist is an easy way to ensure you control your health and financial well-being during life and your loved ones get your stuff without a hassle after your pass away.

Lifetime Documents

Financial Durable Power of Attorney

A financial durable power of attorney allows you to name someone to handle your financial affairs during life if you’re unable to do so as a result of disability or incapacity. A general power of attorney isn’t enough because it ends if you become incapacitated. Creating a durable power of attorney, in contrast, ensures your named agent can make financial decisions for you in the event of your incapacitation. Remember. You need to keep up to date with this and your other estate planning documents. Your agent may have problems enforcing the power if its not up to date. Your financial power terminates on death, at which point another key document of your estate planning checklist, the living trust, comes into play.

Advance Health Care Directive

An advance health care directive allows you to name an agent to carry-out your desired healthcare wishes during life in the event of your incapacity. Healthcare directives also have an after-life element in that you can detail your wishes for organ donation, DNR orders, burial or cremation, funeral location and expense, etc. The law in regards to healthcare directives has changed over the years. Your estate planning checklist needs to comply with current law (with an eye toward complying with any future changes). Take note – if you created a health care before 1992, it’s expired. If you executed a healthcare before 2000, the provisions regarding life-support are not mandatory despite what the document provides. Lastly, a health care executed before 2004 isn’t compliant with HIPAA or CMIA laws that allow your agent to obtain medical information from your provider. Maintaining a current health care directive is an imperative part of your estate planning checklist.

After-Life Documents

Living Trust

Arguably the most important of your estate planning checklist documents (at least from a cost-saving perspective) is a living trust. A living trust is an agreement created during your lifetime where one person (called a trustee) holds legal title for another person (called beneficiary). You can name yourself as trustee and beneficiary of the trust, keeping full control of your real property and personal property during life and ensuring you avoid probate on death. Avoiding probate by creating a living trust allows the trustee to transfer ownership to beneficiaries in a short period of time without court intervention and minimal costs and attorney assistance. Probate can last years and requires court intervention and attorney assistance. If you have real property or the gross value of your estate is over $150,000, creating a living trust is a must to avoid probate in California. The compensation (based on the value of your gross estate) that your trustee and attorney can request if your estate is submitted to probate is as follows:

Gross Estate Value Total Compensation to Trustee & Attorney without living trust to avoid probate Probate Fee with living trust
$500,000 $26,000.00 $0.00
$700,000 $34,000.00 $0.00
$1 million $46,000.00 $0.00
$3 million $86,000.00 $0.00
$4 million $106,000.00 $0.00

A living trust is a necessary part of your overall estate planning checklist and scheme. As illustrated above, creating one will save your family thousands of dollars in probate fees, as well as provide a quick and easy distribution to your intended loved ones on death.

Last Will & Testament

A will is another integral part of your estate planning checklist. Creating a will avoids intestacy and allows you to specify how assets you own as an individual (money and property) is to be divided on death. If you have kids, you can also assign a person or persons to act as guardian of your children on death. Dying testate avoids unwanted parties and/or the State from getting your stuff. There are different ways to create a valid will in California. One of the most common is to create a pour-over will in combination with a living trust. The pour-over will includes instructions to transfer all assets that were otherwise not transferred to the living trust (during your lifetime) to the living trust at the time of your death.

Certified Abstract of Trust

When you transfer property in or out of a living trust, a bank or other financial institution may want to view your trust document. The institution wants to know the trust exists and that you’ve got the authority to act on behalf of the trust. You can create a certified abstract of trust (shorter version of trust) that contains the information needed by the financial institutions while keeping the other provisions private. After all, one of the benefits of creating a living trust is avoiding publicity of your estate affairs on death.

About Sean Hanley

Practicing law since 2007, Sean specializes in the ever-changing laws related to real estate, business and estate planning. Embracing technology with a focus on personalized service, he understands the challenges of living and thriving in Silicon Valley. Tapping into his education in economics and business administration, Sean also serves on the non-profit Willow Glen Business Association.

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