What Is an Estate Plan and Why Do You Need One?

46
8561

Estate planning is not just about writing a will for premature death. He prepares for any situation of incapacity for work and ensures that your affairs are in order in the event of death.

What does an estate plan include?

1. Will

2. Living Trust

3. Advanced medical guidelines

a. Lasting power of attorney

b. Living will

vs. Order not to resuscitate (DNR)

re. Physician's prescription for life-sustaining treatment (POLST)

e. Organ and Tissue Donation

Wills (Prob. §§6100, et seq.)

When people think of estate planning, they usually think of a will. A will is a document in which you can make known your last wishes. This document will inform the courts, family and friends of whom you want to care for your children, as well as how, asset allocation, pet care, etc. Without a will, it will be up to the probate court to determine where and with whom your children will live as well as the distribution of assets.

Living trust (Prob. § 15400)

A living trust is a trust that allows you to transfer your property or possessions to a person of your choice (trustee) while you are still alive. There are basically two main types of living trusts: revocable and irrevocable. A revocable living trust allows you to place the items in a trust while you are still living and the benefactor would receive them on your death, after tax. It allows the flexibility to edit the trust, remove or add beneficiaries, set or change the terms of the trust, and determine how assets are managed.

An irrevocable trust does not offer the same flexibility as a revocable trust but has its own advantages. Once an irrevocable trust is established, you cannot change any aspect of the trust (there are some exceptions, but those exceptions will come with great difficulty). It offers a benefit to the benefactor in that he will not have to pay any taxes on the assets upon death, nor will he be liable for any taxes on the income derived from these assets.

While a revocable trust is easier to set up, an irrevocable trust can be more difficult and it would be in your best interest to hire an experienced estate planning lawyer in Los Angeles to help you.

Advanced health guidelines

Another great one that you can't afford to do without is advanced healthcare guidelines. The Advanced Health Care Guidelines consist of several documents that will act as your voice in the event of medical or mental incapacity. The set of documents may include:

Lasting power of attorney (Prob. §4650, §4700 et seq.)

Lasting Power of Attorney is a document in which you would appoint a person (an attorney) to act on your behalf (the principal). This would allow the agent to pay your bills, talk to creditors and much more while you are incapacitated. It's important to choose someone who has your best interests at heart. An Enduring Power of Attorney, as opposed to a General Power of Attorney, only takes effect when the individual is incapacitated (if it was created specifically for incapacity).

Living will (Homologation §4600 et seq.)

A living will indicates how your children and property will be treated in the event of incapacity. It is this document in which you can make known your last wishes. The living will only become effective if you, the main one, are in a persistent vegetative state or in an irreversible coma.

Order not to resuscitate (DNR)

The order not to resuscitate is part of the living will. This is a handout where you let it be known if you want to be resuscitated if needed.

Physician's prescription for life-sustaining treatment (POLST)

This document allows you to choose a primary doctor and a secondary doctor to carry out your end-of-life treatment. The secondary comes into effect if your doctor of first choice is unwilling or unable to fulfill your wishes.

Organ and Tissue Donation

In addition, as part of your living will, you will be able to make your wishes known if you wish to donate organs or tissues in the event of death.

This can be a lot to take and you may be wondering where to start. The best and safest way to structure your estate planning and all that goes with it is to consult and work with an experienced estate planning attorney in Los Angeles for the best results.


46 COMMENTS

LEAVE A REPLY

Please enter your comment!
Please enter your name here