Takin' Care of Business
Estate Planning
Estate planning is the process by which a client's estate is conserved, invested, managed, and ultimately passed on to others. A good estate plan will adequately address the client needs during the client's lifetime, and will preserve as much of the property as possible and seek to minimize delay, taxes, and administrative costs when the property is ultimately passed on to the client's relatives, friends, or other designated beneficiaries.
Wills are one of the primary tools of the estate planner. However, a competent estate planner will not attempt to achieve all of a client's estate planning goals with a will, but in appropriate circumstances will employ trusts, co-owned property, life insurance policies, multiple-party accounts, gifts, and durable powers of attorney to accomplish those goals.
Saving estate, gift, and other transfer taxes plays an important part in most estate plans. Many clients are aware of the substantial burden that estate and gift taxes impose on estates of sufficient value. Nearly all clients whose estates are large enough to be subject to one or more of these taxes will wish to arrange their affairs in such a way as to minimize the overall tax burden on their estates and heirs. While tax-saving goals are legitimate, however, it is important to keep them in perspective. Taxes should be saved only when it is possible to do so without sacrificing other more important estate planning goals. Providing adequately for the client's own needs while the client is still alive is always more important than attempting to save taxes, either during the client's lifetime or after the client's death. Similarly, a plan that transfers the client's property to persons designated by the client with a minimum of delay and expense is almost always preferable to a plan that saves taxes but deprives the designated persons of some or all of the property that they would otherwise receive, or delays their receipt of the property. Reasonable tax-saving goals are usually compatible with a client's dispositive plans. It is the duty of the estate planner to implement the client's plans in such a way as to achieve both when both are achievable. In every case, of course, all of the options available to the client should be explored and explained, and the ultimate decisions should be the client's to make.
For those who do not have a substantial estate, California has a statutory simple will form prescribed by the Probate Code. It is designed to be made available to consumers in printed form and to be completed without the help of attorneys. The State Bar sells printed copies of the form to attorneys and the public.
Takin' Care of Business
Estate Planning
Estate planning is the process by which a client's estate is conserved, invested, managed, and ultimately passed on to others. A good estate plan will adequately address the client needs during the client's lifetime, and will preserve as much of the property as possible and seek to minimize delay, taxes, and administrative costs when the property is ultimately passed on to the client's relatives, friends, or other designated beneficiaries.
Wills are one of the primary tools of the estate planner. However, a competent estate planner will not attempt to achieve all of a client's estate planning goals with a will, but in appropriate circumstances will employ trusts, co-owned property, life insurance policies, multiple-party accounts, gifts, and durable powers of attorney to accomplish those goals.
Saving estate, gift, and other transfer taxes plays an important part in most estate plans. Many clients are aware of the substantial burden that estate and gift taxes impose on estates of sufficient value. Nearly all clients whose estates are large enough to be subject to one or more of these taxes will wish to arrange their affairs in such a way as to minimize the overall tax burden on their estates and heirs. While tax-saving goals are legitimate, however, it is important to keep them in perspective. Taxes should be saved only when it is possible to do so without sacrificing other more important estate planning goals. Providing adequately for the client's own needs while the client is still alive is always more important than attempting to save taxes, either during the client's lifetime or after the client's death. Similarly, a plan that transfers the client's property to persons designated by the client with a minimum of delay and expense is almost always preferable to a plan that saves taxes but deprives the designated persons of some or all of the property that they would otherwise receive, or delays their receipt of the property. Reasonable tax-saving goals are usually compatible with a client's dispositive plans. It is the duty of the estate planner to implement the client's plans in such a way as to achieve both when both are achievable. In every case, of course, all of the options available to the client should be explored and explained, and the ultimate decisions should be the client's to make.
For those who do not have a substantial estate, California has a statutory simple will form prescribed by the Probate Code. It is designed to be made available to consumers in printed form and to be completed without the help of attorneys. The State Bar sells printed copies of the form to attorneys and the public.
Statutory wills are inflexible documents and rarely used by attorneys. In special circumstances, however, an attorney may use a California statutory will, or provide advice or assistance to a client who wishes to use one. If a client's estate is relatively simple, the attorney may help the client complete the statutory form, or at least provide the client with the printed form and some directions as to its use. California statutory wills have the advantage of being widely recognized and are almost always preferable to any will that a non-attorney might prepare for himself or herself. A California statutory will may also be an appropriate stopgap measure when a client needs a will at once and intends to prepare a more complex will at some time in the future.
Any person of sound mind and over the age of 18 years may execute a California statutory will. Since the Family Code authorizes an emancipated minor to make or revoke a will, it appears that an emancipated minor also has the capacity to make a statutory will.
POWER OF ATTORNEY
Families may also find it useful to execute a Power of Attorney. California Law also provides a uniform statutory form powers of attorney. In general, a uniform statutory form power of attorney is legally sufficient when the language as provided by the statute are used and the form presented in the Probate Code is used. The requirements for completion of a uniform statutory power of attorney are strict and care must be taken in execution to ensure compliance. For example, placing an "X" rather than initialing specific powers on a uniform statutory power of attorney does not meet statutory requirements
By executing a statutory form power of attorney, the principal empowers the attorney in fact to act for him or her in a variety of specified ways. In addition, grants of power regarding real property transactions, personal property transactions, stock and bond transactions, commodity and option transactions, banking transactions, business operating transactions, insurance and annuity transactions, estate transactions, claims and litigation, personal and family transactions, governmental programs, retirement plan transactions, and tax matters also have particular specified effects. Certain financial institutions, however, feel uncomfortable in acting upon a power of attorney, regardless of whether or not it is drafted according to the law. In such cases, a conservatorship of the person or a financial conservatorship or both may be necessary.
HEALTH CARE DIRECTIVES
Finally, California has a Health Care Decisions Law which provides for the creation, form, and revocation of advance health care directives and powers of attorney for health care. The Health Care Decisions Law provides a comprehensive statutory scheme covering various related subjects and applies to health care decisions for adults lacking capacity to make those decisions for themselves. It permits withholding or withdrawing health care to permit the natural process of dying, but no other act or omission to end life, such as mercy killing, assisted suicide, or euthanasia. It does not authorize consent to commitment to or placement in a mental health treatment facility; convulsive treatment psychosurgery sterilization; or abortion.
Charles Farano practices family law and acts as a mediator in divorce cases in Southern California. He is certified by the National Board of Trial Advocates. Other legal articles can be found at www.faranolaw.com. His email address is cfarano@faranolaw.com
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