Estate Planning Documents
Revocable Living Trust
Revocable: You can change the terms of the trust or even cancel the trust.
Living: The Trust is created during your lifetime.
Trust:
- Three Parties:
- Creator: Called “Settlor,” “Trustor” or “Grantor”
- Trustee: The person who controls the trust property
- Beneficiary: The person for whom the trust was created
- Upon the creation of the Revocable Living Trust, you have all three roles of Creator, Trustor and Beneficiary. Upon your death, the person who receives the trust property becomes the Beneficiary.
- Trust Property: Title of property that is transferred to the trust. The trust terms only apply to property transferred to the trust.
- Trust Terms: Set of Instructions, such as:
- Who will be the successor Trustee when you are not able or unwilling to serve as Trustee?
- What are the methods that you would be declared mentally disabled?
- Who receives the Trust Property upon your death?
- How do the beneficiaries receive their property upon your death?
- What are the powers of the Trustee?
- The Revocable Living Trust is used during all Four Stages of Estate Planning.
- Other Facts about Revocable Living Trusts:
- Used in California to avoid probate.
- Can be used for estate tax planning.
- Has no effect on your income tax liability.
- It does not change the separate or community status of property you transfer to the Revocable Living Trust.
Pour-Over Will
- Pour-Over: At death transfers property that was not transferred to the Revocable Living Trust during lifetime.
- Will: A revocable document that transfers property at death and is subject to probate after your death. Probate is a legal proceeding to transfer your property at death. Property held by trust, transferred at death by operation of law (such as joint tenancy property) or beneficiary designation avoids probate.
Durable Power of Attorney for Financial Matters
- Durable: Effective even if you are mentally disabled.
- Power of Attorney: A document that authorizes another person to legally act upon your behalf.
- Two parties:
- Principal: The person who creates the Power of Attorney
- Agent: The person who will act for the Principal. Also called an Attorney-in-Fact.
- Terms:
- What powers that Agent has.
- Prohibits the Agent from acting for the Principal in certain situations.
- Names Successor Agents to take over in case the initial agent is unable or unwilling to act.
- Gives the method of revoking the Durable Power of Attorney.
- Types:
- Immediate: The Durable Power of Attorney becomes effective upon execution of the document.
- Springing: The Durable Power of Attorney becomes effective only when you become disabled. This could occur when one or two physicians declare that you are mentally disabled or when a disability panel that you created declares you mentally disabled.
- When used:
- The Durable Power of Attorney is used for property that has not been transferred to your Revocable Living Trust.
- It is also used for matters that are not handled by your Revocable Living Trust, such as: signing tax returns or resigning from memberships in different organizations.
- Can be used to designate beneficiaries of a qualified retirement plan, IRA or insurance policy. You cannot transfer qualified retirement plans or IRA’s to a revocable trust, or the assets in those plans will be subject to immediate income tax.
The Durable Power of Attorney could be used in Stage 1, if it is an Immediate Durable Power of Attorney. The Agent could work on your behalf if you were unavailable. However, the primary use of the Durable Power of Attorney is during Stage 2, when you are mentally disabled.
Advanced Health Care Directive
The Advanced Health Care Directive serves four purposes:
- Names a Health Care Agent (and successor Agents) to make health care decisions for you, when you are unable mentally unable to make health care decisions for yourself or give informed consent.
- Give specific instructions for your end-of-life care when you cannot make these decisions for yourself: This can range from taking all actions to preserve life to stopping all medical treatments when certain medical conditions exist. These instructions are highly personal and must be discussed in detail before drafting them for your directive.
- Post death authority for the Health Care Agent, such as:
- Whether or not to authorize an autopsy.
- If you authorize the Health Care Agent to donate your organs and for what purposes the organ donation could be made.
- How you want your remains to be handled after your death, such as burial or cremation.
- Designation of your primary physician.
- The Advanced Health Care Directive is used in Stage 2.
Assignment of Property to Revocable Living Trust
This document expresses your intent to transfer property that is titled in your own name to be transferred to your Revocable Living Trust. This should be considered only as a backup to actually transferring title of your property to your Revocable Living Trust. The Assignment can be used in a court proceeding called a Heggstad Petition that transfers property that is not titled in the name of your Revocable Living Trust to that trust without a probate.
This document is operates during Stage 3 when the first spouse of a married couple dies, and Stage 4 when an unmarried individual or the surviving spouse of a married couple dies.
Property Agreement for Married Couples
This document converts all jointly owned property, such as joint tenancy property, to community property. Property held in joint tenancy is transferred to the surviving joint tenant under the operation of law. This means that the Revocable Living Trust does not operate on joint tenancy property. The Property Agreement is one step that must be taken, so all jointly held property can be transferred to your Revocable Living Trust.
This document operates in Stage 1 of your estate planning.
Certificate of Trust (Privacy Affidavit)
This document demonstrates that the Revocable Living Trust is in force, and the Trustee is acting on behalf of the Trust. This allows the Trustee to manage the trust property without disclosing the personal and confidential provisions of your Revocable Living Trust to third parties.
This document is used during all four Stages of your estate planning.
Authorization to Release Confidential Medical Information (HIPAA Authorization)
The Health Insurance Portability and Accountability Act (HIPAA) prevents medical providers, such as doctors and hospitals, from releasing your private medical information to any third party. However your successor Trustees and your Agents under a financial or health care durable power of attorney might need this information, so they can act on your behalf. This document authorizes health care providers to release your confidential medical information to persons you designate, so they can act on your behalf.
This document is used during Stage 2 of your estate plan.
Nomination of Conservator
In the unlikely event that you need either a conservator of your person or your estate, your can nominate the persons to serve in those capacities in advance of that need. A conservator is a person who is granted legal authority by a court over your person or your estate.
- The Nomination of the Conservator of the Person could be created in your Advanced Health Care Directive.
- The Nomination of the Conservator of the Estate could be created in your Durable Power of Attorney for Financial Matters.
- However, I prefer to create a separate document for the nominations of conservator.
This document is used during Stage 2 of your estate plan.
Nomination of Guardians for your Minor Children
Your minor children cannot make legal decisions for themselves. This document allows you to designate individuals to have the legal authority to raise your children, if you are deceased. It also gives the guidelines to raise your children according to your beliefs.
The Nomination of Guardians could be created in your Will or a separate document.
This document is operates during Stage 4 when an unmarried individual or the surviving spouse of a married couple dies.