Comprehensive Estate Plans
What is an estate plan and why is it important? Planning for your incapacity or passing may feel as like a daunting task. However, with the guidance from an experienced estate planning attorney, you can create a plan to protect your family and your assets with ease.
Your estate includes everything you own: your home (including all the personal belongings), bank accounts, investment accounts, retirement savings, cars, business interests, life insurance, etc. In addition to planning for your assets, your estate plan must consider your family, especially minor children and family members with special needs, and even the beloved family pet.
By failing to plan for your estate and loved ones, the distribution of your assets becomes controlled by the government and involves probate court. Probate is the legal process through which the court ensures that after you pass, your debts are paid, and assets are distributed according to your Will or if you don’t have a Will, intestate law.
At Moore Law for Children, we assist with comprehensive estate plans that map out the future of your estate and leaves a plan for your loved ones that is in accordance with your wishes, not left to the court. An estate plan is a gift to your family.
A will is a legal document that is signed by you (the testator) and signed by two witnesses. A will allows you to name executors (the person who administers your estate), dictate who shall receive your assets, and name guardians for minor children; however, a will must go through probate court and be subject to a judge’s scrutiny. Generally, a will does not include trusts for heirs; assets are distributed all at once. A will costs less than a trust upfront, but the statutory attorney fees involved in probate court to distribute your will far exceed a trust estate plan. For example, a $500,000 estate (gross value of estate not offset by debts) costs approximately $13,000 in statutory attorney fees and $13,000 in statutory personal representative fees; a total of $26,000 that goes to the fees and not your family, and it will be 12-19 months before your family receives their inheritance through probate court. In order to preserve more of your estate for your loved ones, a will should be supplemented by a trust, making sure that probate is avoided altogether.
A trust is an estate planning tool that helps avoid probate court and is an efficient means to immediately and seamlessly distribute assets upon your passing according to your specific wishes, not a court. There are many different types of trusts to help you achieve your specific needs and goals. The most common type of trust is revocable, which means it may be amended during your lifetime, meaning you can change your mind about the distribution of assets at any time. A trust becomes irrevocable upon your passing, and no further changes may be made, this ensures your desires are effectuated.
A trust is a legal document that is signed and notarized and remains effective during your lifetime and directs the distribution of your estate after you pass. There are many benefits of a trust, including avoiding probate and the delay and costs involved in probate, providing for the management of your assets, distribution of your assets according to your wishes, which includes measured and incremental distribution of assets (instead of an outright inheritance that happens in probate), plans for your incapacity, providing for loved ones with special needs, and may be changed at any time during your lifetime. A trust-based estate plan costs more than a will-based plan; however, the administration of a trust is simpler and more cost-efficient than just a will that goes through probate court.
An advanced health care directive is another planning tool that allows you to make specific provisions and name health care agents to make decisions for you in the event that you become incapacitated or unable to make those decisions. The document only becomes effective under the circumstances laid out in the document, and you will have full control of your medical decisions until those triggers occur. The advance health care directive lays out instructions in advance, allowing you to appoint health care agents who will have the authority to make decisions such as keeping you at home for as long as possible and outlining your wishes about life-sustaining medical treatment. While death is inevitable, an advanced health care directive can ease your mind that your end-of-life care will reflect your own values and desires.
A financial power of attorney grants trusted persons (“agents”) authority to act on your behalf with regards to financial matters when you are unable to. Typical tasks of an agent, also known as an attorney-in-fact, include dealing with assets, investing money, generally handling financial affairs, withdrawing money from bank accounts, etc. A financial power of attorney may become effective immediately or upon an occurrence of a future event, such as incapacitation or illness.
An attorney-in-fact can do as little or as much as you desire, depending on what you put in the Power of Attorney. With a financial power of attorney in your estate plan, you can rest assured that someone you trust can manage your financial matters when you are no longer able to.
The loss of a loved one is an emotional and difficult time. If you have been named as Trustee, your decisions have an enormous effect on the trust and your family. Trust administration can be a daunting process, but with the guidance of experienced attorneys at Moore Law for Children, we will guide the Trustee through the legal process and advise on the law to avoid personal financial liability.
A Trustee owes many fiduciary duties, including but not limited to:
- Administer the trust in accordance with the trust terms
- To secure and protect all assets owned by the decedent
- Impartiality to all beneficiaries which may be complicated if someone is a beneficiary and serving as a Trustee
- May not engage in self-dealing unless expressly authorized in the trust
- To take and keep control of and to preserve the trust property
- To make trust property productive
- Create and provide an accurate accounting of the trust property
- File tax returns
Serving as a Trustee comes with a high level of responsibility and potential greater liability if the law is not carefully followed. Moore Law for Children is available to work with the Trustee to ensure a successful trust administration and all legal requirements are met.
Special needs planning helps preserve public benefits for beneficiaries with disabilities. A properly designed and administered Special Needs Trust (SNT) can provide funds to supplement the public benefits, such as SSI or Medicaid, of a person with disabilities without interfering with the beneficiary’s eligibility for those benefits.
There are two broad categories of Special Needs Trusts – a General Support Special Needs Trust and a Supplemental Care Special Needs Trust. The former acts as a primary source of benefit for a disabled individual, whereas the latter, the most common type of SNT, acts as a secondary source of support once government benefits are exhausted. Both trusts can either be self-settled by the beneficiary or funded by a third party. However, the decision on who is to fund the SNT is important because a self-settled trust is subject to Medicaid payback when the beneficiary passes away, as well as other contribution limitations. A third-party funded trust has no payback requirement.
Special Needs Trusts can also contain Care Management Provisions, ensuring a beneficiary has a readily available person committed to overseeing the beneficiary’s care after a parent or guardian passes away. A Special Needs Trust management team can also ensure the trust will be carried out to the utmost benefit of the beneficiary. Since SNTs can last a lifetime, many issues may come up, and ensuring a team will be there to make informed decisions for the benefit of the beneficiary can bring peace of mind that your loved one will receive the best care and quality of life that the trust can provide.
Another planning device for a beneficiary with special needs is an ABLE Account, established under the Achieve a Better Life Experience Act. An ABLE account permits individuals with disabilities to save in and withdraw from the account to pay for disability-related expenses. However, ABLE accounts are also subject to limitations on contributions, so it is important to meet with an attorney to see if an ABLE account is the right planning device for your loved one.
If you have minor children, naming a legal guardian in your will is an important planning device that many parents don’t consider. Naming a legal guardian in your will grants a trusted person authority to act on your behalf and step in to care for your minor children if something were to happen. Without naming someone in your will, a court may appoint a guardian that does not meet your wishes for your minor children.
In the event of both parents’ death, it is important to carefully choose who will care for your minor children. Factors such as age, location, financial ability, belief system, and family structure are important to deliberate when naming a legal guardian. You should also have a discussion with the person you plan to name to make sure they know the importance of the role they could potentially take on.
As your children get older, needs and circumstances change. It is important to review and update your guardian choices with your estate planning attorney to make sure the person you choose is right for your family.
Contact an Experienced and Trusted Orange County Estate Planning Attorney
Planning is peace of mind. Being prepared provides protection for your loved ones. Talking with our team provides insight, options, and peace of mind. We invite you to review the recommendations of our former clients and contact Moore Law for Children for a complimentary consultation.