Estate Planning During Coronavirus

There’s no time like the present to complete your estate plan.  As the coronavirus pandemic continues, Americans are facing unprecedented realities.  Each day brings more uncertainty about school and business closures, event cancellations, and social distancing rules that impact everyone.  Times like these should serve as a reminder of the importance of having a well-designed estate plan.

Most people believe an estate plan consists of just a will or trust.  The fact is that proper estate planning includes several documents that are designed to ensure your estate avoids probate, that your assets pass seamlessly to your intended beneficiaries, and that your family can access and control your money when you no longer have that ability yourself.  The following documents are foundational to a comprehensive estate plan:

Trust.   A trust is an important tool because it either holds your assets during life or receives them after your death, which allows you to direct the management and distribution of your assets.  The ability to manage your property with a trust can be especially helpful during a disability or illness, and it also avoids a costly and time-consuming conservatorship proceedings if you become unable to manage your own affairs because of an illness.  If your trust is properly funded, your family can avoid time-consuming and costly probate proceedings after your death.

Will.  A will works as the main dispositive document, or as a “pour-over” to move your assets to your trust when you die if you forget to completely “fund” your trust—which many people do.  And a will is the only estate planning document in which you may nominate a guardian for your minor children.

Power of Attorney for Finances.  A financial power of attorney allows you to appoint someone to handle your financial affairs if you become incapacitated or unable to handle them yourself.  This is a particularly valuable component of a solid estate plan because the individual you appoint will be authorized to file tax returns, pay your bills, and carry out other important financial matters on your behalf.

Advance Health Care Directive.  An advance health care directive allows you to appoint someone to make health care decisions for you if you cannot make them for yourself.  You may also express your wishes about donating organs or ending life support in the event you become terminally ill or are in a persistent vegetative state.

Making time during the coronavirus pandemic to update your estate plan—or create a new one altogether—will provide certainty and comfort during these turbulent times.  Although our firm is practicing social distancing by limiting in-person meetings with clients, we have the ability to discuss your estate plan by telephone or video conference, and can assist anyone throughout California with their estate planning needs.  In addition, we can arrange to have your estate planning documents executed remotely if you feel uncomfortable meeting in person.  If you have any questions about creating or modifying your estate plan, please call Wolff Mascaro LLP today at 949-769-3608.

The Advantages of Using a Trust to Plan Your Estate

Nobody likes to think about dying, and that’s the primary reason so many people go without an estate plan.  But when it comes to taking care of your family, you have to prepare for the inevitable.  Taking care of your family includes preparing an appropriate estate plan, which should include legal arrangements that anticipate both incapacity and death.  A power of attorney for finances, and advance health care directive, can appoint an agent to manage your money and health care in the event you become incapacitated, or unable to make your own decisions about your money and health care.  A will and living trust are useful tools for managing your affairs after your death.  Although both allow you to dictate how your assets will be distributed when you die, a living trust has a distinct advantage over a will.

A fully funded trust avoids probate, a court-supervised legal procedure for administering a person’s estate after they die.  Although there are some benefits to having a court supervise an estate’s administration, people generally prefer to avoid the process for several reasons.

Probate is slow.  A typical probate can take a year or longer.  An attorney can prepare your trust in a few days or weeks.  After your death your successor trustee can distribute assets to your beneficiaries quickly.

Probate is relatively expensive.  While preparing a trust might cost a few thousand dollars, even a simple probate could cost more than twenty thousand dollars.

In a probate proceeding, records are available to the public.  For many people, this may seem unimportant.  But if you want to keep certain people, like friends, cousins, or a former spouse, from learning about your finances—and your beneficiaries—a trust is the way to keep your affairs private.

In sum, using a living trust to plan your estate is the preferred method of distributing your assets after your death.  However, any comprehensive estate plan would include a trust and will, particularly if minor children are involved, because only a will can appoint guardians.  Moreover, a will is necessary to “pour over” any assets into your trust that may have been overlooked during the trust funding process.  In any case, a trust remains the cornerstone of any good estate plan.