(951) 781-1960 | info@moynihanlyons.com

6529 Riverside Ave., Suite 132, Riverside, CA 92506

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Frequently Asked Questions
about Estate Planning in California


What is Probate?

Probate is the court and process that looks after people who cannot make their own personal, health care and financial decisions. These people fall into three general categories: Minor Children (under age 18 in most states); Incapacitated Adults; and People who have died without legal arrangements to avoid probate. Probate proceedings can be expensive and time-consuming. Additionally, the court proceeding and associated documents are all a matter of public record. Many people choose to avoid probate in order to save money, spare their heirs a legal hassle, and keep their personal affairs private.

What is Joint Tenancy with Rights of Survivorship?
(in some states "Tenancy by the Entirety" when between spouses)

This is the most common form of asset ownership between spouses. Joint tenancy (or TBE) has the advantage of avoiding probate at the death of the first spouse. However, the surviving spouse should not add the names of other relatives to their assets. Doing so may subject their assets to loss through the debts, bankruptcies, divorces and/or lawsuits of any additional joint tenants. Joint tenancy planning also may result in unnecessary death taxes on the estate of a married couple.

What is a Will?

The document a person signs to provide for the orderly disposition of assets after death. Wills do not avoid probate. Wills have no legal authority until the willmaker dies and the original will is delivered to the Probate Court. Still, everyone with minor children needs a will. It is the only way to appoint the new "parent" of an orphaned child. Special testamentary trust provisions in a will can provide for the management and distribution of assets for your heirs. Additionally, assets can be arranged and coordinated with provisions of the testamentary trusts to avoid death taxes.

What is a Living Will?

Sometimes called an Advance Medical Directive, a living will allows you to state your wishes in advance regarding what types of medical life support measures you prefer to have, or have withheld/withdrawn if you are in a terminal condition (without reasonable hope of recovery) and cannot express your wishes yourself. Oftentimes a living will is executed along with a Durable Power of Attorney for Health care, which gives someone legal authority to make your health care decisions when you are unable to do so yourself.

What does Intestacy mean?

If you die without even a Will (intestate), the legislature of your state has already determined who will inherit your assets and when they will inherit them. You may not agree with their plan, but roughly 70 percent of Americans currently use it.

What are Beneficiary Designations?

You may avoid probate on the transfer of some assets at your death through the use of beneficiary designations. Laws regarding what assets may be transferred without probate (non-probate transfer laws) vary from state to state. Some common examples include life insurance death benefits and bank accounts.

What is a Durable Power of Attorney and when do I need one?

These allow you to appoint someone you know and trust to make your personal health care and financial decisions even when you cannot. If you are incapacitated without these legal documents, then you and your family will be involved in a probate proceeding known as a guardianship and conservatorship. This is the court proceeding where a judge determines who should make these decisions for you under the ongoing supervision of the court.

What is a Revocable Living Trust?

This is an agreement with three parties: the Trust-makers, the Trustees (or Trust Managers), and the Trust Beneficiaries. For example, a husband and wife may name themselves all three parties to create their trust, manage all the assets transferred to the trust, and have full use and enjoyment of all the trust assets as beneficiaries. Further "back-up" managers can step in under the terms of the trust to manage the assets should the couple become incapacitated or die. Special provisions in the trust also control the management and distribution of assets to heirs in the event of the trustmaker's death. With proper planning, the couple also can avoid or eliminate death taxes on their estate. The Revocable Living Trust may allow them to accomplish all this outside of any court proceeding.

Who Should Have a Revocable Living Trust?

Whether you are young or old, rich or poor married or single, if you own titled assets such as a house and want your loved ones to avoid court interference at your death or incapacity, consider a revocable living trust. A trust allows you to bring all of your assets together under one plan.


Long-Term Care Planning

Who should have a Plan?

A long-term care Plan is geared towards the needs of individuals who are dealing with chronic health conditions that will likely result in the need for extra care either in-home or in a facility and who want to make sure they are getting the right care at the right time. Quality of life is the primary focus of a life care plan. Asset preservation is another goal.

A well designed long-term care plan helps smooth the transitions that accompany the changing needs of the individual while also protecting assets.

Mom has a long-term care plan. She needs more care now. What do we do?

Call us. We are ready for you. A Geriatric Care Coordinator will advise you and help you determine what the best next step should be.

What do you mean when you talk about asset protection?

Long-term care can be very expensive. Many clients opt to access Veterans Benefits or Medi-Cal to pay for long-term care. They also want to prevent estate recovery after they are gone. We help them qualify for these benefits and protect their house and other assets.

Medicare will pay for any nursing home or long-term care, right?

WRONG. Medicare does not pay for custodial long-term care in a nursing home. Medicare will pay for rehabilitation in a nursing home following a hospital stay, but only the first 20 days will be paid for 100%. Days 21 through 100 will require a co-pay. However, once the facility determines that you are not improving (rehabilitating), then Medicare will not pay any longer regardless of the number of days you have been in the nursing home.

Don't we have to spend all of our savings to become eligible for Medi-Cal?

No. Many people think that they must "spend-down" to the point where they are practically broke before they can access Medi-Cal to pay for nursing home care. However, this is not true. For married couples, the well-spouse is permitted to keep $115,920 (in 2013) as a community spouse resource allowance. We can help our clients keep even more if necessary to provide income to the well spouse.


Estate Planning

What is included in my estate?

Everything. Your estate is made up of all of your assets. Your house. Other real property. Stocks & bonds, Bank accounts, and personal property such as jewelry or cars.

What is an estate plan?

Your estate plan is a set of legal documents that provide direction for how your assets should be managed during your lifetime and distributed after you are gone. Most of our clients use a revocable trust as the foundation of their estate plans although a few use wills. At a minimum, you should nominate a guardian for your minor children even if you do no other estate planning.

Your estate plan should include Durable Powers of Attorney for Asset Management and Health Care which authorize someone else called your agent (or attorney-in-fact) to act on your behalf should you become incapacitated. These documents can grant broad powers or be tailored to achieve more specific goals according to your wishes. At Moynihan Lyons PC, our estate plans include these documents plus ancillary documents to provide comprehensive protection for you and your loved ones.


Estate Administration

What is estate administration?

Generally estate administration refers to the process of gathering assets, settling debts, distributing property and wrapping up any loose ends after a person dies. Often, this includes changing the title to property to reflect new ownership. With married spouses who have a joint trust, most of the administrative actions may be delayed until the second spouse passes away.

Questions about Probate:

If I die without a will, won't my spouse inherit everything?

Not necessarily. When a person dies without a will, whatever assets that person owns (with the exception of accounts that have beneficiary designations) will be distributed according to the rules of intestate succession. Intestate means "without a will". For example if a husband dies intestate and leaves behind a wife and two children, his wife would inherit his share of the community property but she would only inherit 50% of his separate property while his children will share the other 50% equally.

Why should I have a trust rather than a will?

For most people, trusts provide better lifetime protection as well as probate avoidance upon death. If you are in an accident or become very sick or unable to manage your affairs, your successor trustee can step in and make the necessary decisions. Used in conjunction with your Durable Power of Attorney for Asset Management, you retain control over your life and your wealth.

Do you have concerns about children inheriting too much too soon? Do you have a blended family? Do you have a beneficiary receiving public benefits whose share of your estate should be held in a special needs trust? A trust is a perfect vehicle for maintaining some control even after you are gone.

You can also avoid probate with a properly designed and funded trust. Probate can be more expensive since fees are calculated based on the value of your estate. Probate also takes longer to complete.

Finally, for estates that may be exposed to estate taxes, proper trust based estate planning can avoid tremendous loss of wealth.

What should I do with the Will after a loved one dies?

The first step in a Probate Administration is to lodge the Will with the court. This should happen within 30 days of decedent's death. We will do this for you. A Petition must be filed asking the court to appoint an Executor (if there was a Will) or Probate Administrator (if there was no will). Once the Executor/Administrator is appointed, he or she will be responsible for managing the probate administration. Duties include: complying with the legal timelines for notifying beneficiaries, marshalling assets, paying debts, providing accountings, making final distribution, and reporting to the Court until officially discharged from his or her duties.

Questions About Trust Administration:

How does a trust administration differ from probate?

Trusts are typically administered without court involvement and proceed more quickly that probates. The trustee of the trust has the power to manage and distribute trust assets according to the trust document. However, the trustee must still comply with legal requirements regarding notice to beneficiaries. If issues arise, the trustee may seek the court's assistance to resolve them.


Miscellaneous

My mom is having problems remembering to pay her bills. Do I need to become her conservator?

Not necessarily. If your parent is still competent, she can choose to execute a Durable Power of Attorney for Finance giving you the authority to handle her financial matters, i.e. paying her bills, collecting rent, buying or selling property. If she also executes a Durable Power of Attorney for Health Care and sets up a trust (if necessary), she most likely can avoid the need for a conservatorship.

Does a Power of Attorney expire?

Not unless you indicate an expiration date. Typically, our clients execute Durable Powers of Attorney that continue even if the client becomes incapacitated. Indeed, it is the power to handle a person's affairs during their incapacity that makes this power so valuable (and potentially dangerous.) Thus, you must be confident that you trust your agent to always act in your best interest.

What if I change my mind about who I want to act as my agent under a power of attorney?

You can always change your mind and revoke the power.

When should I create a new Power of Attorney?

It's never a good idea to rely on a power of attorney that is too old. Institutions and service providers have more confidence in respecting a Power of Attorney that is a relatively recent versus one that was created decades ago. Additionally, any time you change your mind about any authority granted under your Power of Attorney, you should revoke the old one and create a new one.

Do I have to appoint the same person to handle both my financial affairs and my health care decisions?

No. Although most of our clients choose the same person to handle both their financial and healthcare decisions, this is not a legal requirement. For example, a parent may want a child who works in the medical profession to make medical decisions but prefer that another child manage the parent's finances.

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Moynihan Lyons PC

6529 Riverside Ave., Suite 132
Riverside, CA 92506

Phone: (951) 781-1960

Email: info@moynihanlyons.com

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