10th Jun 2013
One of the legal mechanisms used to protect a decedent’s assets from probate is the living trust. With a living trust, transfer of the assets from the name of the decedent to his heirs becomes less expensive and less time-consuming. In California, a living trust can save your heirs as much as 4% of the estate’s value, and as much as two years of the probate process. Although anyone can write a living trust, it is always best that the document is executed with the assistance of an experienced living trust attorney in California.
The key to a well-drafted living trust is the maintenance of control of your assets within your family. At no time will the courts be able to interfere in the transfer (as against a Probate). However, you still need supplementary documents to make your living trust effective. These are a Durable Power of Attorney for Property Management and an Advance Health Care Directive (Living Will) and Durable Power of Attorney for Health Care. The first document will name someone to handle your assets and day-to-day financial affairs in case you are incapacitated. The latter documents will empower an individual you nominate to make health care decisions for you when you can’t, and, if necessary, to “Pull the plug”.
The Financial Durable Power of Attorney (DPA) for Property Management and Personal affairs designates an individual you can rely on to act as your Attorney-in Fact who will make decisions regarding your assets when you are incapacitated. As such, this person can settle your bills, file your income tax returns and decide for you with regards your other financial matters. With a DPA, this means that your family can still control your assets during your incapacity – and not the courts or lawyers. And you can do it under your terms.
You can make the DPA a “springing” document. This means that the DPA becomes effective inly when you are incapacitated. You can also make it “immediate,” which means your designated Attorney in Fact can commence making financial decisions for you as soon as the document is signed. Under the latter situation, you need not be incapacitated.
The Directive and Durable Power of Attorney (DPA) nominates an individual whom you trust to act as your Attorney in Fact, who will decide on your behalf regarding your health, when you are incapacitated. Again, with this document, you place the key decision on your health n your family’s hands and prevents a conservatorship when you are incapacitated.
This DPA contains an Advance Directive, which is known as a Living Will. This contains your final instructions on such key medical issues such as if you want to “have the plug pulled” or to just go naturally.
IN executing your living trust, it is always good to consult your living trust attorney. He will be assisting you in drafting all these documents to ensure that your living tryst worlds according to your last wishes – and benefits the people you truly love.