Safeguarding Your Most Precious Asset
When it comes to estate planning, the word ‘asset’ might conjure images of real estate, stocks, or other material possessions. However, for parents, the most precious asset is not measured in financial terms, but in the love and concern they have for their children. This is where Moore Law for Children, an Orange County-based law firm, offers its unique approach in safeguarding what matters most – your family’s future.
Understanding Estate Planning
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. Estate planning isn’t just about distributing your wealth. It’s a comprehensive process that includes ensuring the welfare of your children, even in your absence. Proper estate planning can secure the financial future of your offspring and establish a clear pathway for their upbringing. Not to mention, it helps prevent any potential conflicts that might arise among family members.
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. This is a long process, often taking more than a year, and involves probate tax that is taken out of your estate, thus leaving less for your loved ones.
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. This will help your loved ones avoid the delay and cost of probate court. An estate plan is a gift to your family.
A will is a legal document that 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.
Revocable Living Trust
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.
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.
Advance Health Care Directive
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 prerequisites 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. An advanced health care directive can ease your mind that your end-of-life care will reflect your own values and desires.
Power of Attorney – Financial
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, paying bills, 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
- Act impartiality to all beneficiaries, which may be complicated if someone is a beneficiary and also 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 Trust
Families with members who have special needs must take into consideration protecting those special interests. 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.
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.
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.
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.
Naming Guardians for Minor Children
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 consider 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 continues to be the right choice for your family.
Compassionate and Competent Approach
At Moore Law for Children, we embody a distinctive approach that combines both compassion and competency. Our team of dedicated mothers and attorneys understand the complexities of estate planning and the emotional dynamics involved. We see each case through the lens of a parent, empathizing with your concerns, and providing compassionate legal assistance.
Client-Centered Estate Planning
Our approach is four-pronged: Embrace, Educate, Empower, and Excel. We embrace our clients’ situations with compassion, understanding that each family and its circumstances are unique. We educate our clients about their rights and the legal options available. Empowering our clients, we assist them in making informed decisions that align with their family’s best interests. Finally, we endeavor to excel in our services, delivering them with utmost ethics and diligence.
Taking the Next Step
Estate planning is not a task to be postponed. Time and unforeseen circumstances underscore the need for parents to treat this matter as a priority. At Moore Law for Children, we stand ready to guide you through this journey with patience, understanding, and professionalism.
We invite you to take the first step towards securing your family’s future by contacting our office to schedule a consultation. We’ll discuss your specific situation, explain how the legal system can work in your favor, and begin crafting a plan tailored to your family’s needs and values.
With Moore Law for Children, you don’t just get an attorney; you gain a team of dedicated professionals who understand the essence of parenting. Your children are your most cherished assets. They deserve an estate plan built with the same level of love and care you put into raising them. Take the next step today to ensure their future is in safe hands. Our promise is to fight for your family as we would our own.