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10 Interesting Facts About Estate Planning in California

10 Interesting Facts About Estate Planning in California

10 interesting facts about Estate Planning in California

The peace of mind that comes from creating an estate plan makes it a worthwhile thing to do. Legal documents that protect your assets after your death and respect your wishes for end of life care include a will or living trust and an advanced health care directive. A power of attorney gives someone legal authority to act on your behalf when you are unable to do so. You can use the HIPAA Release Form to empower someone to access your health information. To learn about estate planning in California, review these 10 interesting facts.

1. Choosing to Make a Will

Popular myths about dying without a will can give you the wrong idea. California does not automatically claim your estate as the rumor suggests. Your heirs have a priority that puts them ahead of the state. However, the rules of “intestate succession” control the distribution of your wealth. Estate planning allows you to put a favorite relative first in line instead of in the order that the law requires.

Unless you change the seniority of the beneficiaries of your estate, your spouse comes first. Your dependents come next, followed by your parents and your siblings. The sequence ends with your nieces and nephews, grandparents, aunts, uncles and cousins. The California Statutory Will gives you a way to create a free legal document by filling in some blanks without paying fees or hiring a lawyer. Signing the document in the presence of two witnesses executes your will and makes it valid.

2. Preferring to Establish a Revocable Living Trust

An alternative to a will is a revocable living trust that lets you avoid probate. Both let you make changes to the terms and conditions when you choose. A will offers no protection from taxation, but a living trust does. You can ensure the privacy of your estate matters when you prepare a revocable living trust.

California’s courts allow you to transfer your assets to the trustee of your trust. Probate is a public process that reveals the size of your estate and other matters. If you do not have a will, then your estate probably must go to probate. However, unless the terms are disputed, your will may not need to go to court. A revocable living trust offers you an elegant alternative to probate that is private and efficient. In distributing your assets, the courts give precedence to trust documents over a will.

3. Understanding the Advanced Health Care Directive

The end of life often makes communicating wishes clearly a difficult task, but an advanced health care directive lets you decide on the types of treatments and tests that you may or may not want. You can designate the people who have the power to make health care decisions for you when you are unable to express them for yourself.

4. Recognizing the Importance of a Living Will

California introduced the concept of living wills in 1976 as the first state to recognize a forward-thinking need. Now transformed into the Instructions for Health Care form and a companion to your advanced health care directive, it lets you dictate your choice of medical treatment when you are incapacitated.

Documents that make your wishes clear when you cannot speak for yourself are sometimes difficult to prepare because of their implications. However, the emotional impact of your condition at the end of life makes it nearly impossible for your loved ones to make the right decision. With legal documents that confirm your preferences, your doctors, as well as your family members, are legally obligated to comply with your instructions.

5. Assigning Power of Attorney

An agent that you designate can act on your behalf when you are incapacitated. Since you cannot anticipate when you may need it, you can act now to create a power of attorney document that allows your agent to take action when it matters.

6. Allowing Access to Your Medical Information

Federal law makes it possible to release your medical and insurance related matters to a trusted agent, usually one that you name on your advanced directive or your power of attorney.

7. Examining the Elements of Your Estate

Your assets may amount to more than you think. Far more than just a bank account, your estate includes real property and investments in stocks and bonds. Payments that are due to you on loans that you have made increase the value of your assets, and proceeds from your life insurance policies contribute as well. Make sure to get an appraisal on your jewelry and include it along with your cars, furniture, original artworks and motorized lawn equipment.

8. Paying Inheritance Taxes

California eliminated the inheritance tax in 2005. Your estate’s executor pays taxes if necessary, preventing your heirs from having to pay them. However, the law does not require payment of federal estate tax unless the amount of money in your estate is greater than that for 98 percent of your fellow Americans.

9. Protecting the Money You Saved

It may surprise you to know that your spouse can inherit the funds in the 401(k) plan that you worked hard to accumulate. Spouses have the right to relinquish the funds by preparing a written statement that confirms their decision.

10. Keeping Your Personal Information Private

As long as you live, your will is your personal property. You have no obligation to share it with anyone, even though you may want an estate planning attorney in California to help you prepare it. The witnesses who verify your signature have no reason to examine it, making it possible for you to remain the only person who knows what is in it.

Make sure to leave a copy with your attorney so that it can provide the guidance that you desire for distributing your assets to your beneficiaries.