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Power of attorney FOR FINANCES

A power of attorney for finances document gives another individual the authority to make legal decisions and take action on your behalf. This person is known as the “attorney in fact” or “agent” and can be your spouse, partner, or anyone you trust. A power of attorney can apply to all your affairs, or be limited and apply only to particular assets or accounts you own.

When this power is made "durable," it means this arrangement will generally continue until your death, unless it is formally revoked, and it remains in effect when you become incapacitated or are no longer able to make financial decisions on your own behalf. A properly executed health care document allows you the person you want to act your behalf without the expense and delay of a court conservatorship proceeding.The durable power of attorney can take effect immediately or at the time of your incapacity, but must be established while you still have your mental faculties. You cannot create a durable power of attorney once you become incapacitated.

Will

The traditional cornerstone of an estate plan is a will.  Essentially, a will is a personal declaration about where you want your property to go at death. Everybody should have one. Because a will does not become legally enforceable until your death, it may be changed at any time before your death or mental incompetence. 

 

A will offers many advantages, generally enabling you to control what happens after you're gone. With a will, you can:

  • choose the executor
  • designate a guardian for minor children or others unable to fully care for themselves
  • leave your property to beneficiaries you choose, including a charity
  • minimize estate tax
  • get a sense of accomplishment and peace of mind

A person who dies without a will dies "intestate." When you die intestate, California law controls who is in charge of your estate and who receives your assets and in what proportion those assets will be divided.

You need certain documents to meet your estate-planning goals and a basic understanding of the way they all work.

Components of a Complete Estate Plan

 

Advanced Health Care Directive (Health care Power of attorney)

Your advanced health care directive will 1) appoint a person you trust to act on your behalf for health care decisions when you cannot, and 2) ensure that your intentions are well understood. Even with such a plan in place, it is a good idea to have a frank conversation with your health care agent about your wishes under various scenarios. 


A properly executed health care document allows you the person you want to act your behalf without the expense and delay of a court conservatorship proceeding.

 


Trust

A trust is an agreement that allows a third party, or trustee, to hold assets on behalf of a beneficiary or beneficiaries. Trusts can be arranged in many ways and can specify exactly how and when the assets pass to the beneficiaries. Assets in a trust generally pass outside of probate, saving time, court fees, and potentially reducing estate taxes as well.

Additionally, certain types of trusts may not be considered part of the taxable estate, so less taxes may be due upon your death.  Other benefits of trusts include:


Control of your wealth. You can specify the terms of a trust precisely, controlling when and to whom distributions may be made. You may also, for example, set up a revocable trust so that the trust assets remain accessible to you during your lifetime while designating to whom the remaining assets will pass thereafter, even when there are complex situations such as children from more than one marriage.


Protection of your legacy. A properly constructed trust can help protect your estate from your heirs’ creditors or from beneficiaries who may not be adept at money management.


Privacy and probate savings. Probate is a matter of public record; a trust may allow assets to pass outside of probate and remain private, in addition to possibly reducing the amount lost to court fees and taxes in the process.