Estate planning can seem like something you can put off since it requires you to think about things that might be far away or unpleasant. But a sudden illness, injury or death can leave families navigating bank accounts, property deeds and other details at the worst time. An estate plan gives your family a roadmap so you can determine how things are handled instead of letting a court decide. If you live in Petaluma or elsewhere in Sonoma County, your estate plan should be based on California law, your family situation, your assets and any changes that might happen in your life.

Incapacity Documents

Some people mistakenly believe that estate planning is only about what happens when you die. However, there are several important estate planning documents that take effect during your lifetime if you become incapacitated. For instance, the financial power of attorney lets you name a person to handle finances like banking, paying bills and filing taxes if you become incapacitated.

Otherwise, family members might need to go to court to get permission to handle those matters. An advance health care directive (worth a skim of https://www.en.wikipedia.org/wiki) is another important document. It allows you to designate a health care agent and state your wishes about medical treatment, including whether you want to be kept alive by machines.

It can reduce conflict among family members who do not agree on what you would want. These documents are just as important as a will or trust since they cover what can happen first, which is what to do when you cannot handle things yourself.

Property and Possessions

A will can still be part of an estate plan in California. You can use a will to name beneficiaries, appoint a guardian for minor children and indicate who gets specific items of personal property that might be more sentimental than monetary in nature. But a won’t cover everything. A beneficiary designation or ownership status might supersede a will or trust. Make sure to review the following in addition to any will or trust:

• Retirement plans and life insurance
• Accounts with a designated beneficiary
• Real estate and vacation property
• Jointly held bank accounts and real estate
• Business interests and valuable collectibles

 

A revocable living trust could help you avoid or minimize the cost of probate for assets that are placed in the trust. You also can specify who will manage your estate if you become incapacitated. This might be important if you have property in California, are part of a blended family or you want your assets to be distributed over time.

Guardians for Children

Parents who have minor children should name a person who will serve as a guardian if the need arises. Although the court isn’t required to honor a parent’s preference, it can be a significant factor when the court makes its decision. Practical considerations and emotional factors should both play a role in the selection. A guardian should be both capable and willing to provide day-to-day care, maintain a stable household, and facilitate education and friendships. You might also consider naming a backup in case the primary candidate is unable or unwilling to serve.

Have candid conversations with those you are considering naming before finalizing the nomination form. A guardian nomination carries more weight when everyone has an honest expectation of what is being asked.

Asset Titles

Even the most carefully written estate plan can fall short if assets aren’t titled properly. Jointly owned real estate, for instance, could transfer to the co-owner upon death without regard to your will. A retirement account could go to a former spouse unless the beneficiary form has been updated.

It is unnecessary to complete this process if you don’t own anything of value, have no children, and don’t need to appoint agents to act on your behalf, but fewer people fit this description than many assume. Someone who rents an apartment might still have retirement savings, bank accounts, pets, or elderly parents who depend on them.

Revisit account titles and beneficiary designations after major life events. Marriage, divorce, childbirth, a death in the family, an inheritance, or buying a house can all result in discrepancies between paperwork and intent.

Family Dynamics

An equitable plan is not necessarily an equal one. Adult children might have varying needs and relationships to the family home. Blended families might need provisions to ensure a surviving spouse is cared for without disinheriting children from a prior relationship.

 

The goal is not to justify every personal family decision in a public document. The goal is to make sure those documents leave as little room for confusion as possible. If a particular gift or distribution is likely to be a surprise, discussing it with family members in advance might prevent hard feelings down the road.

There are some questions that cannot be answered with a standard checklist. Should the family home be sold? Should it be left to a spouse? Should it be divided among children who may disagree about its future use?

Homeowners should take care to look at the property-tax implications before transferring their Sonoma County home to their children.

Under California law, parents and children might not be allowed to qualify for the parent-child exclusion from property tax reassessment if the property does not remain a child’s principal residence.

A knowledgeable attorney can align the terms of a trust with property tax laws.

Access and Updates

Once the documents are signed, they should be stored in a safe place but made available to those who need them. Maintain a directory of financial accounts, insurance policies, subscription payments, digital passwords, and important contacts.

Review the plan periodically and after major changes to your finances, your family, your health, or California law – the Law Office of Andrew Kern has a Sonoma County estate planning attorney page if you want that route. Minor corrections are easier than creating a new plan when an emergency arises.

 

 

Take the Next Step

To begin, compile a list of your current accounts, property records, insurance policies, and existing estate planning documents.