A common refrain that we hear from people when we encourage them to consider estate planning, especially people in their twenties and thirties, is “But I don’t need an estate plan.”  The reasons vary, and this post will address the first of three of the most common ones.

Reason # One:  I Don’t Need an Estate Plan Because I Don’t Have Very Much.

For young people just starting out, this is a common belief.  But, estate planning isn’t just a way to distribute your property after your death – it’s also planning for your incapacity and making arrangements for your minor children.  A “foundational” estate plan generally consists of three or four documents:  (1)   a durable power of attorney for finances (DPAF), (2) a durable power of attorney for health care/advance health care directive (DPAHC), (3) a will, and occasionally, (4) a trust.  Of those four, the first two of those documents are exclusively for use during your lifetime.  The DPAF names someone to handle your financial and personal affairs if you are ever unable to do so, and the DPAHC names someone to make medical decisions for you and sets forth your wishes for medical treatment.  Additionally, if you have a trust, the trust names a person to manage the assets in the trust both during your life (if you are ever unable to do so) and upon your death.

Continue Reading You Need an Estate Plan (Even in Your 20s and 30s) (Part One)

KellyDSince my practice primarily involves disputes, I am often asked to assist clients with the issues that arise when one of their loved ones becomes incapacitated and can no longer make financial or health care decisions for himself or herself.  In a perfect world, the loved one has a foundational estate plan that includes a durable financial power of attorney and an advance health care directive that name an agent (also called an attorney-in-fact) who can step in and make financial and health care decisions when the loved one is no longer able to make those decisions for himself or herself.  In these “perfect world” scenarios, once a determination of incapacity is made, it is relatively easy for the agent to step in and begin managing his or her loved one’s financial affairs and medical decisions and needs.  But what happens if the loved one does not have a foundational estate plan, or if he or she is in need of more protection than a durable financial power of attorney or advance health care directive can provide?  In those difficult situations, court intervention is often required.

If your loved one becomes incapacitated and does not have a durable financial power of attorney (and “durable” is the key word here:  a financial power of attorney is only “durable” if it specifically states that it remains in effect even in the event of incapacity), it may be necessary for you to seek the appointment of a conservator so that there is a person who has the authority to manage your loved one’s financial affairs.  This is also true if your loved one does not have an advance health care directive or durable power of attorney for health care that appoints an agent to make health care decisions for him or her in the event of his or her incapacity:  in that event, it may be necessary for you to seek the appointment of a conservator so that there is a person with authority to make health care decisions for your loved one.

Continue Reading My Loved One is Incapacitated. Now what?

EdCThe recent case of  Allen v. Stoddard (2012) 212 Cal.App.4th 807 has highlighted at least one pitfall regarding filing a claim against an estate. The Allen court has pointed out that Probate Code section 9353 (“Section 9353”), which imposes a deadline of 90 days in which to file a lawsuit against an estate on a rejected creditor’s claim, and Code of Civil Procedure section 366.3 (“Section 366.3”), which imposes a deadline of one year to enforce a claim against a decedent for breach of a promise or agreement relating to a distribution from an estate or trust, have conflicting requirements as to a claimant’s time to file a lawsuit regarding claims for breach of a promise to make a will.

Continue Reading Court Clears Up Confusion Regarding the Limitations Period to File A Lawsuit Based On A Promise To Make A Will

Getting started with estate planning can seem like a daunting task. The various documents and the vocabulary can be confusing if you’ve never seen them before. Here’s a guide to the basics of a foundational estate plan:

Trust: A trust is an agreement that makes it easier to manage assets during your lifetime and after your death.  The person creating the trust is called the settlor or the trustor, and the person who manages the trust is the trustee. A trust can have more than one settlor and more than one trustee – in a community property state like California, married couples often create a joint trust, where they are each a settlor and each a trustee.  People can also have more than one trust – sometimes couples will create a joint trust for their community property, and each will also have an individual trust for his or her separate property.

A trust can be either revocable or irrevocable.  For basic estate planning, people generally create revocable trusts (also called living trusts or inter vivos trusts) during their lifetime, which means that they can change or completely revoke the trust at any time.  After their death, the trust becomes irrevocable, which means it cannot be changed.  Irrevocable trusts can also be used during a settlor’s lifetime for complex tax planning.

Continue Reading Estate Planning 101: Getting Started

California has joined the majority of states in allowing individuals to file a lawsuit against those who have intentionally and wrongfully interfered with their expected inheritance. The new tort of Intentional Interference with Expected Inheritance (“IIEI”) came about from the recent California appellate court case of Beckwith v. Dahl (2012) 205 Cal.App.4th 1039 (“Beckwith”). 

In Beckwith, decedent Marc Christian McGinnis (“Marc”) and his partner Brent Beckwith (“Brent”) had been in a committed same-sex relationship for approximately ten years. Prior to his death, Marc had shown Brent a will which Marc had drafted and which left half of Marc’s assets to Brent and half to Marc’s sister, Susan Dahl (“Susan”). Though Susan and Marc had been estranged for some time, Susan was made aware of Marc’s intentions prior to his death. When Marc was on his deathbed, a copy of that specific will could not be located and it was agreed that Brent would draft a new will which had the same distribution provisions as the previous will. Susan was made aware of this and agreed to the drafting of the new will. Unfortunately, Marc passed away before he could execute the new will.

Continue Reading Is Someone Wrongfully Interfering With Your Expected Inheritance?