Frequently Asked Questions (FAQs)
In addition to the Frequently Asked Questions (FAQs) below, for a general introduction to estate planning and why all individuals and families should have a comprehensive plan in place, we would encourage you to watch some of the videos on our site that cover the basics provisions of a will, the need for guardianship provisions for parents with minor children, and the other benefits associated with having a properly drafted and executed estate plan. You can find these videos under the estate planning information section. You may also visit our video blog, which covers various issues and frequently asked questions (FAQs) on this page.
We would also encourage you to consult the California State Bar information pages on wills, living trusts, and estate planning.
1. What are the benefits of living trusts?
Living trusts, otherwise known as revocable living trusts or family trusts, provide a proven method to manage family assets during life and distribute them after the passing of the original trustors to family and charitable beneficiaries. In contrast to a last will and testament, assets properly transfered into a trust are distributed to beneficiaries without court review according to the instructions in the trust document. Because of this ability to circumvent probate, living trusts save significant time and money for families and diminish the stress after the passing of loved ones.
An estate plan with a properly executed living trust is also an excellent means to care for a loved one should the family member not be able to make financial decisions for themselves due to incapacity.
Living trusts also serve as the foundational document for minimizing various taxes through the creation of credit shelter trusts and charitable trusts. Additionally, living trusts may contain other important trusts, such as qualified terminable interest property (QTIP) trusts for clients with children from a first marriage, supplemental needs trusts, and trusts for children.
2. What is a pour-over will?
Generally, a last will and testament is the final, written expression of a person's wishes concerning the disposition of his or her assets after life. The will must be properly executed and witnessed for it to be recognized as valid. A last will and testament may also contain additional clauses concerning wishes for burial, guardianship of children, etc. If valued over a certain amount, assets transferred through a will to beneficiaries must be reviewed and approved by a state probate court.
A specific type of a will known as a pour-over will is used in conjunction with a living trust where these assets controlled by the will are distributed by the successor trustee via the living trust.
3. What is a power of attorney form?
A durable power of attorney form allows an agent to make financial decisions on behalf of another person where incapacity or significant medical injury are present.
4. What is an advance healthcare directive?
This document memorializes a person's wishes in advance concerning when and if to use extraordinary medical measures where significant injuries or disease are present. This document also allows you to appoint an agent and successor agent to make important medical decisions for you, as well as memorializing your wishes concerning conservatorship, long-term care issues, and organ donation.
5. Are there other benefits for families with a comprehensive estate plan?
For younger clients, another tremendous benefit of a comprehensive estate plan is the peace of mind in knowing that proper guardians are in place for minor children. Both death and incapacity of parents can occur and a proper plan is necessary. Without these provisions in an estate plan, the state ultimetly has the authority to determine what guardian may care for the children. Additionally, clients may select multiple guardians should the first guardians not be able to serve. Finally, guardians and trustees should be nominated to shelter and protect financial assets for the long-term benefit of the children.