California Estate Planning Attorney Blog

Essential part of any estate planning effort is a diligent assessment of your legal relations. No matter if you are rich or not so well-off there are plenty of those. Every ordinary person has obvious ones, like employment contracts, family ties (married?) or partnerships in business enterprises. Each single legal relation comes with certain rights and/or obligations. There is also a relationship to assets, called ownership. Owners have also rights and obligations, e.g. the right to sell an asset or the obligation to pay property taxes on real estate.

Normally the owner knows that he or she actually owns something. Usually the owner is also aware of the respective rights and obligations that come with ownership of assets. Imagine now the unhappy event that you die from one day to the other. You would normally expect your heirs to take over, but heirs are not visionaries. The heirs would need to figure out what assets you have owned to know their rights and obligations.

Therefore, it is a good idea to create an inventory of all assets - tangible (like a car or a house) or intangible (like bank accounts, royalties or patents), so you heirs will get an overview of your estate. Often assets come with a document of title that expressly states your ownership (like the deed to a house). Inventory and documents of titles are essential when it comes to the distribution of an estate. Therefore those papers should always be held in an order and accessible in a way that somebody who is not familiar with your financial situation could get on overview if need arises.

The same applies to the usual instruments of estate planning, which are expressed in documents as well. Those essential documents encompass the last will, your living trust document, your health care directive and the durable power of attorney. Your heirs will need those documents to figure out who is entitled to your estate. It will avoid confusion if you keep those documents accessible. You should also let your intended heirs know where you keep your papers. In addition a safe backup - either digitally or hardcopy is advisable for worst-case scenarios (like a disastrous fire). Keeping your documents in order and safe will provide you with ultimate peace of mind.

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According to an Article on Forbes.com (see here) a recent survey showed alarming numbers when it comes to estate planning.

Roughly 65 % of 1,022 Adults asked do not have a will, that directs who inherits their assets in the worst case. 71 % lack an advance health care directive (living will), a legal instrument that is designed to direct critical health decisions if someone looses the mental capacity to decide on his own. No numbers were mentioned regarding the existence of a durable power of attorney but it can easily be assumed, that the results would have been similar terrifying.

Conductors of the survey also asked for the reasons, why people would not plan. Many individuals mentioned that estate planning were not their prime focus, especially in midst of recession. And 19 % thought, that estate planning was only important to the rich. These reasons are popular misconceptions of estate planning, which I have already highlighted (among others) in a post last year (see here).

I cannot stress enough that nearly all aspects of estate planning are of paramount importance to most people, even to those who struggle to cope with daily life. Information about estate planning are available for free, e.g. in our firm's learning center. If you're reading this post and you have not yet started your estate plan, it is time to do it now.

Continue reading "65 % of Americans Do Not Have a Will" »

New research shows that communication with patients who have fallen into 'vegetative state' has become possible. Researchers have used brain scans on patients with devastating brain damage to watch the reactions of the brain when they were asked questions. The scientists were able to distinguish a 'yes' from a 'no' on the picture of an MRI-machine. Those are the basics. If you are interested in the details, I recommend this article in the British Telegraph.

But does this medical breakthrough make living wills (aka advance health care directives) and durable powers of attorneys dispensable? The answer is clear-cut. The new science cannot substitute these very basic elements of estate planning. Both, living will (see here for further information) and durable power of attorney (see here for further information) are legal instruments that are set up for the sad moment a person becomes mentally incapacitated. It allows an agent to act on behalf of the principal or make medical decisions for him because he is no longer able to act or express himself. Despite the breakthrough, it is not clear yet, whether a person in vegetative state can make sound decisions. Furthermore the new technology doesn't enable the patient to look after his financial duties. Therefore the new technology does not substitute the aforementioned legal instruments.

It is thus still highly recommendable to have a durable power of attorney and a living will for the event that you become suddenly and unexpectedly incapacitated. If your estate plan contains the required documents, there is no need to worry, but if not it is time prepare the necessary documents. If you don' t like doing this yourself, ask your local estate planning attorney.

Continue reading "Communication With Coma-Patients - Are Living Wills Now Dispensable?" »