If you're in a tragic accident that leaves you in a coma, there will be financial and healthcare decisions that will need to be made. If you don’t plan ahead, a family member will have to hire an attorney and ask a judge to approve a conservatorship of yout estate and person that will permit her to act on your behalf. That could be an expensive and time- consuming task.
AL.com’s recent article, “If You Don’t Have This, You Need It” says that a better solution is to be proactive and have your estate planning documents in order.
1. Trust - Do you have assets whose gross value is $150,000 or more? If so and you live in California, you should consider a trust to allow the management of your assets during life and transfer of your assets after death.
2. Will - Even if you have a trust, we recommend you have a will. Sometimes people forget to fund their trust with assets or name a beneficiary on life insurance or a retirement plan account. In those cases, the asset(s) would go through probate and your will will direct the assets to your trust.
3. Power of Attorney - A Power of Attorney allows for the management of your assets held outside your trust such as life insurance policies, IRAs, 401(k)s, collecting government or other employment benefits, etc. There are different types of POAs.
- Springing Power of Attorney. This only becomes effective under certain conditions, typically incapacity. A big disadvantage of this POA, is that when someone tries to use it on your behalf, they may be required to "prove" that you are actually incompetent, creating inconvenience and delays.
- General Power of Attorney. This document is one in which you give your attorney-in-fact the authority to act on your behalf at any time. However, if you become incapacitated, this document could be null and void.
- General and Durable Power of Attorney. This document lets your attorney-in-fact continue acting on your behalf, if you become incapacitated.
- Limited Power of Attorney. Here, you appoint someone to act on your behalf, only under certain conditions, such as only when you’re out of the country.
4. Advance Directive for Healthcare. This document describes your wishes on end-of-life care. These documents aren’t legally binding agreements, but it’s seldom that their instructions aren’t followed and accepted by healthcare professionals. Talk to an attorney, because they do vary by state.
Consider your own situation. Which estate planning documents are most appropriate for you and your specific situation? An experienced estate planning attorney will make this decision more accurate and easier.
One of the main goals of our law practice is to help families like yours plan for the safe, successful transfer of wealth to the next generation. Call our office today to schedule a time for us to sit down and talk about your estate plan, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security. Our office is located in Santa Ana, CA but we serve all of California including Irvine, Orange, Tustin, Newport Beach, and Anaheim.
Reference: AL.com (October 26, 2018) “If You Don’t Have This, You Need It”