Regardless of the documents name it is important that you make your health care wishes known.

When you execute an Advance Health Care Directive or a Living Will you set forth your healthcare instructions and wishes. You will nominate an individual (“Agent”) to carry out such instructions/wishes.

Most people prefer not to think about a Living Will because it forces them to think about falling sick or dying.  But, as we all know, life is uncertain and unpredictable.  All of us, at any time, could find ourselves sick, injured, on life-support, in a coma, in the final stages of dementia, or near the end of life.  Without a Living Will in place and the nomination of a Health Care Agent to carry out our wishes, you risk putting your healthcare decisions in the hands of strangers.

What is included in a Living Will?

When preparing a Living Will, there are many issues you will need to address:

1. Do you want your life to be prolonged in the event of an incurable illness likely to result in death within a short time? 
2. Would you rather your life not be prolonged in such an event?
3. Do you want pain relief?
4. Do you want to live in the comfort of your own home?
5. Do you want to donate organs, be cremated or buried, etc.?

Who should you choose as your Agent in your Living Will? 

1. Who do you trust to make such personal, health care decisions? 
2. Who do you know that has the appropriate skill set to be able to communicate with your health care providers and doctors? 
3. Who has the emotional stability to advocate your wishes in what may be an emotional and stressful situation?

These are all things you should discuss with your family, doctor, and a Carlsbad probate attorney.

Why hire an Estate Planning Attorney to create a Living Will?

According to a survey published in the American Journal of Preventive Medicine, only a quarter of Americans have Living Wills in place. 

Although creating a Living Will may seem to be simple, oversights are frequent. An attorney who focuses on estate planning can help you create an effective Living Will according to state laws. Contact a probate and estate planning attorney to discuss your concerns and learn how they can help address your Living Will concerns.

About the Author:

The author is a reputed estate planning attorney in Carlsbad CA. He helps clients in estate planning to avoid probate, unnecessary taxes, and legal fees. Visit https://www.rassmanlaw.com/ for more details.

A Personal Representative in a probate (an “Executor or Executrix” if the person was named in the decedent’s Will, or an “Administrator” if not named or no Will existed) is the individual appointed by the Probate Court to faithfully administer a decedent’s estate for the benefit of the decedent’s creditors and beneficiaries.  Failure to perform his/her duties faithfully could be cause for removal. A Carlsbad probate attorney can defend the removal (if representing the Personal Representative) or seek removal of a Personal Representative (if representing a creditor or beneficiary) by filing a petition for removal.

Naming an individual as Executor in your Will gives that person the authority to act on your behalf after your death.  Others can object to his/her appointment by the Court, but without cause the objection will not carry much weight against someone nominated in your Will.  If your Will does not name an Executor, or you pass away without a Will, California Probate Code Section 8461 defines priority for appointment of your Administrator in Probate Court.

Who Will a Probate Court Name as Personal Representative if There is no Will in California?

California Probate Code Section 8461 states that the Probate court should appoint a Personal Representative in the following order:

1. Surviving spouse or domestic partner;
2. Decedent’s children;
3. Decedent’s grandchildren;
4. Decedents other issue;
5. Decedent’s parents;
6. Decedent’s siblings (Brothers and Sisters);
7. The issue of Decedent’s siblings;
8. Decedent’s grandparents
9. The issue of Decedent’s grandparents
10. The children of the Decedent’s predeceased domestic partner or spouse;
11. The other issue of the Decedent’s predeceased domestic partner or spouse;
12. Other “Next of Kin”;
13. The parents of the Decedent’s predeceased domestic partner or spouse;
14. The issue of the parents of the Decedent’s predeceased domestic partner or spouse;
15. The Conservator of the estate who was the Conservator at the time of the Decedent’s death provided they have filed a first account and are not Acting as a Conservator or Guardian for someone else;
16. A Public Administrator
17. Creditors
18. Any Other Person

What are the Requirements to Serve as Personal Representative in California?

Pursuant to California Probate Code Section 8402(a), a person is not competent to act as personal representative in any of the following circumstances:

1. The person is under the age of majority.
2. The person is subject to a conservatorship of the estate or is otherwise incapable of executing, or is otherwise unfit to execute, the duties of the office.
3. There are grounds for removal of the person from office under Section 8502.
4. The person is not a resident of the United States.
5. The person is a surviving business partner of the decedent and an interested person objects to the appointment.

Note, Paragraphs (4) and (5) above do not apply to a person named as Executor in the decedent’s will.

What are the Duties of a Personal Representative in California:

• Collect all outstanding payments owed to the estate including insurance claims, pensions and tax refunds, if any;
• Investigate whether there are payments, refunds, reimbursements and/or debts owed to the estate (e.g. checks that have not been cashed, dividends, utility refunds, etc.);
• Reimburse individuals who may have advanced the decedent’s last illness and funeral expenses;
• Pay creditors and expenses of the estate using the estate assets;
• Establish the availability of probate assets and determine their value;
• Manage the estate’s assets through the probate period;
• File tax returns for the decedent and the estate;
• Inform creditors of their right to present creditor claims during a narrowly defined creditor claim period;
• Determine whether creditor claims are genuine;
• Ascertain who the beneficiaries are and to what each is entitled; and
• Etc.

A Personal Representative may be Personally Liable for some of the Following:

• Improper or negligent management of assets;
• Wrongful payment of creditors (excess payment);
• Late filing of (or failure to file) tax returns;
• Distributing property to beneficiaries before paying creditors or taxes;
• Failing to collect debts owed to the estate.

For What Reasons May a Personal Representative be Removed?

Pursuant to California Probate Code Section 8502, A personal representative may be removed from office for any of the following causes:

1. The personal representative has wasted, embezzled, mismanaged, or committed a fraud on the estate, or is about to do so.
2. The personal representative is incapable of properly executing the duties of the office or is otherwise not qualified for appointment as personal representative.
3. The personal representative has wrongfully neglected the estate, or has long neglected to perform any act as personal representative.
4. Removal is otherwise necessary for protection of the estate or interested persons.
5. Any other cause provided by statute.

Probates are “statutorily driven”, meaning to remove (or defend) a Personal Representative, one must fully understand the California Probate Code, California Rules of Court, and the local Rules of Court. These statutes and rules are complex and working with a probate attorney in Carlsbad can give you a head start in the process.

The Personal Representative should work with an experienced probate lawyer to guide him/her through the Probate process in Court.  If the Personal Representative fails to faithfully perform his/her duties, he/she could be removed and surcharged by the Court.

Feel free to reach out to a Carlsbad probate lawyer if you have probate questions in California.

Lastly, creating a comprehensive estate plan ahead of time will help to save your loved ones the headache of going through the full probate process. Please contact us if you would like to learn more about how you can plan for your estate. (760) 933-8254.

An estate planning attorney Carlsbad can help you cover your bases and mitigate the chances of a fight over your estate and decision making among your loved ones. Commonly overlooked issues include:

• Decision Making Within a Family Home — In certain instances, you may be the patriarch or matriarch of your family. Filling that gap may be difficult as different family members may try to exert control over family events and family decisions.  

• Distributing Personal Property — Make sure your Will and/or Trust does not overlook your tangible, personal property (e.g. jewelry, artwork, furniture, clothing, photographs, etc.).  In the case of a Trust, consider assigning all such property to your Trust (by way of an Assignment) and using a personal property memorandum to help dictate how personal property is divided among family members.

• Choice of Administrator, Executor, or Trustee — Who will take up the administration of your estate and be responsible for: payment of last illness and funeral expenses; payment of bills left behind; payment of taxes; and distribution of assets to your beneficiaries?

• Money Owed to you — Have you loaned or advanced money to your children?  What happens to those amounts after you have passed? Do you wish for them to be forgiven, or would you prefer for them to reduce your child’s inheritance?

Clearly, these are just a few of the factors for which you should plan.  The right attorney will provide you guidance on these and many more factors.

Where to Keep the Estate Planning Document?

After signing your Will, Trust and other estate planning documents, you will need to find a safe place to keep them.  A fire safe box at home may be a good option, provided you are comfortable providing your successor trustee and/or executor the code. 

A safe deposit box at a bank is an option. In this event, in some circumstances you may be best served by titling the box in the name of your Trust.  This may reduce the time it takes for your successor trustee to access the box on your death or incapacity.  This may also reduce / eliminate the chances that your documents are stolen – a concern for some clients.

You can also ask your Carlsbad wills and trust attorney for his keep advice, and perhaps to keep an electronic copy on file.  From there, you can distribute electronic versions of your estate planning documents to your trustee and/or executor for safe keeping, provided again you are comfortable providing them this information and feel that they are capable of safeguarding personal / confidential information.

Traps when Planning an Estate:

• Consider a Trust if you have minor or disabled beneficiaries.
• Do not create a Trust or Will on your own or through an online company without having it reviewed by a qualified estate planning attorney.
• Review your estate plan every 3-5 years and after major life events (marriage, divorce, additional children, new grandchildren, etc.).
• Fund your Trust (i.e. make sure your Trust is the title-holder of various assets; but understand that certain assets – like certain retirement accounts – should never be titled in the name of your Trust).
• Do not lose your original Trust or Will, or put it in a place where nobody else can find it.  Under California law, there exists a presumption that a lost Will may have been intentionally revoked – which could throw your entire estate plan out the window.

It may be hard to remember all the “do’s and don’ts” listed above, but a trust and estate planning attorney Carlsbad CA will be able to guide you through successful estate planning – and dramatically help your loved ones shield your estate from unnecessary court costs, taxes, and family turmoil.

The good thing is that you don’t have to do it all alone. There are several times when a Carlsbad probate attorney can step in and help.

Here are 7 practical ways a Carlsbad Probate Attorney can help you:

1. Protection against Probate Litigation

Litigation surrounding the transfer of assets after death happens more often than you imagine. The probate procedure can be a magnet for those trying to take advantage of an unsavvy beneficiary after the passing of a benefactor. These come in the form of contesting a valid will or trust, to long lost creditors making a claim against the estate.

When you hire a probate lawyer, you can make sure that all claims against the estate are valid claims. In addition, an experienced probate lawyer will help to ensure that once money is distributed to a beneficiary, that beneficiary will not have to worry about lawsuits against them to recover the money from a creditor of the estate.

2.Limit Family Fighting During a Time of Grief.

Probate is usually a period of incredible turmoil within families. Particularly when the will of a decedent leaves out certain individuals or does not split the assets equally.  A probate lawyer can help reduce these pressures on the executor. A qualified probate attorney translates the will and encourages a tension free probate process. In doing so, this will help preserve un-necessary legal expenses to be paid out of the estate. The probate attorney will help with communicating to siblings who are not on speaking terms, in order to settle the estate.

3. Drafting Your Will.

Though you may want a DIY will, we strongly advise to have your Last Will and Testament created by an expert estate planning attorney. That is the best way to ensure that the Last Will and Testament is going to carry out your wishes, as you intend. It also reduces the likelihood of a court pronouncing your will as invalid after your death based on a technicality.

4. Helps you to Understand the Complex Probate Process.

You may be an agent or a beneficiary with questions about a complex probate process. A well-qualified probate lawyer will have the answers. The truth of the matter is that probate can be a very tense time for everybody involved. Family members who don’t understand the process sometimes feel like they are being taken advantage of.

This is all amplified during a time of grief after the passing of a friend or family member. An experienced Carlsbad probate lawyer can assist in making sure that you understand the probate process, and are able to effectively make important legal decisions.

5. Assist in Probate Court.

Again, the probate procedure is complex and has many technical subtleties. Particularly when the bequest settlement is being overseen by an unpracticed agent with minimal experience in accounting or money management, or the probate court rules. A seasoned probate attorney will act as a guide for executors and help to streamline the process. This also helps shield the executor from personal liability for making uninformed decisions, even when their intentions are pure.

6. Repayment of the Estate’s Debts.

Executors at times battle with the reimbursement of expense part of the probate procedure. They may even postpone payment of debts, increasing the balance through interest, by trying to be overly careful. With the help of a Carlsbad probate attorney, all of the estate’s debts should be paid off prior to making distributions of the remaining assets to the beneficiaries.

There is a unique and specific procedure for notifying creditors of the probate estate. When done properly, this will limit the creditors ability to try and collect from the beneficiary’s after the assets have been distributed. However, a professional Carlsbad probate attorney will help to ensure that you follow all requirements, and track the notification period for creditors so that you will not have to delay the distribution to beneficiaries one day longer than the law requires.

7. Helps with the Technical Probate Details

Executors of an estate have a wide range of duties when they take on that role. With that said, if they make a mistake, they can be held personally liable. A significant number of these obligations are court rules and procedures that are hard to understand with strict deadlines. While you can absolutely do them yourself, the process can be greatly simplified by using someone who has done it before. This also greatly reduces the risk of any personal liability for the actions of an executor.

Hence, a probate attorney Carlsbad can make sure that you understand the technical details, so you don’t commit unnecessary errors. Errors in probate end up creating delays and incur unnecessary expenses to be paid by the estate.

With that said, different estate planning attorneys may use synonyms for the names of the different people within an estate plan. This can make reviewing a simple estate plan feel more complicated that it is. By becoming familiar with these terms and their synonyms, you will be ahead of the curve when creating or reviewing an estate plan.

Below is a summary of some key estate planning terms.

What is the Definition of a Trustor?

The Trustor (also known as a “Settlor” or a “Grantor”, depending on the attorney’s preference) is the person who creates the Trust (i.e. the person who owns assets, like a home, and wishes to transfer those assets to a Trust).  The Trustee is the person in charge of managing and investing Trust assets and making distributions (if the terms of the Trust require it) to the Trust’s beneficiaries.

The term Trustor is synonymous with Settlor and Grantor.

What is the Definition of a Grantor?

A Grantor of a Trust is another way of saying Trustor. Simply put, it is the person who creates a trust, and puts trust assets into their trust, for the benefit of another person.

The term Grantor is synonymous with Settlor and Trustor.

What is the Definition of a Trustee?

A Trustee is a an individual (or corporate fiduciary) who is specifically named in a Trust document to carry out the instructions of the Trust. The Trustee is tasked with collecting all of the assets in the Trust Estate and manage them until the Trust instructs them to distribute them to a beneficiary. The Trustee can also manage the Trust Property full time and pay the beneficiary income from the property. The specific instructions for a Trustee should be clearly drafted in a trust by a qualified estate planning attorney.

While a trustee can administer a trust without the help of an attorney, there are strict laws that should be followed. Thus, many Trustees choose to hire a Trust Administration attorney to make sure that they follow the trust instructions correctly, and do not take on any personal liability.

What is a Beneficiary?

Simply put, a beneficiary is a person, group of people, or organization, to which a gift of an asset is made. The gift or benefit can be made through legal documents such as a trust, a will, life insurance policy, or financial account with a beneficiary designation.

Except for estates that are exempt from probate, the beneficiary of a Will only receives their inheritance after the will is examined and approved by a probate judge.

Beneficiaries of trusts, life insurance, and other financial accounts with beneficiary designations, will receive their benefit based on the terms of the legal document in which they are named.

How do the Trust, Grantor, Trustee and Beneficiary all work together?

By analogy, think of a Trust as a small, single shareholder corporation.  In this imperfect analogy, the Grantor is the sole shareholder of the corporation and the Trustee is the President of the Corporation. 

Like this corporation, where all assets owned by the corporation are indirectly owned by the sole shareholder, all assets owned by the Trust are indirectly owned by the Grantor. 

Similarly, like in a corporation, where all day-to-day decisions of the corporation are made by the President, who has the legal authority to manage, invest, sell, and encumber (to name only a few) corporate assets, the Trustee of the Trust is the person who has these powers with respect to Trust assets.

What Does an Estate Planning Attorney Do?

The estate planning attorney doesn’t only deal with the last will and testament of the client. In California, estate planning attorneys also can help clients with drafting a revocable living trust. They also build up an arrangement to alleviate or avoid estate taxes. Estate planning attorneys work to ensure that your life’s hard work and assets are sheltered from unnecessary legal fees, taxes, and family turmoil after your passing.

An estate planning attorney can prepare health care directives and a financial power of attorney. These documents are used to appoint an agent to handle your affairs, if you lose the mental ability to do so. They prevent you from having to go to court and ask a judge for a conservatorship or guardianship.

Qualities of a Great Estate Planning Attorney

You should feel truly at ease sharing private subtleties of your life and your worries with an estate planning attorney Carlsbad CA. This will ensure that your estate plan doesn’t miss the mark regarding your goals.

Your estate planning attorney should be knowledgeable about the latest changes in federal law, tax law, the California Probate Code and the San Diego Probate Court rules. If this is not the case, the estate plan could, at last, be regarded invalid and the court can disapprove it.

A general attorney might not possess the specialized knowledge and experience to help you. You may have unique family and assets that require someone who understands all areas of estate planning. Find somebody who has experience in estate planning in San Diego. You can contact Carlsbad estate planning attorney to get an expert opinion.

How Much Should an Estate Plan Cost?

Estate planning attorneys generally charge by the hour or at a flat rate. Our firm believes in charging a flat rate, so the client knows what to expect. Your estate plan should be created and monitored by somebody who is an authority in this field. Additionally, there are online services that offer estate planning. Clients are taking a risk that the court will not uphold their wishes. As the familiar axiom goes, “You get what you pay for.”

Therefore, we believe in transparency and have our estate planning costs published here.

A hostile probate process can deplete your estate after your demise. Without well drafted estate planning documents, your risk of this happening is much greater.  Your friends and family will be left behind to deal with the stress, time, and expense. Avoid this by planning ahead.  

We offer peace of mind to our clients that their loved ones will not have to go through that stress during a time of grieving. This is the result of working with an experienced, accomplished estate planning attorney. Get the opportunity to discover and connect with an experienced and well-regarded attorney for all of your  Carlsbad estate planning needs.

When a California resident dies without a Will, he/she has died “intestate”.
This is a legal term meaning the person died without documenting his/her wishes for distribution of his/her estate.

When this happens, California law decides who inherits the decedent’s assets. Keep in mind, this excludes assets held 1) by a Trust, 2) in accounts or policies that designate beneficiaries, and 3) jointly with someone else.

The definition of “intestacy” in California?

As stated above, “intestacy” is a legal way of saying someone died without a Will. 

In this case, California’s intestate inheritance laws (California Probate Code 6401 and 6402) dictate who inherits the decedent’s assets.  Again, this excludes assets held by a Trust, in accounts with beneficiaries, and/or jointly owned accounts.

What are California’s intestate laws?

When someone dies without a Will in California, assets owned by the decedent in his/her sole name (as opposed to assets held 1) by a Trust, 2) in accounts or policies that designate beneficiaries, and 3) jointly with someone else) pass to the decedent’s heirs-at-law, as defined in California Probate Code 6401 and 6402. 

What happens to the property of a married person after death when there is no Will, Trust, or Beneficiary in California?

Under these Probate Code provisions, if the decedent was married, his/her community property (broadly defined as any property owned jointly by a married couple) passes to the decedent’s spouse; and his/her separate property passes to a combination of his/her spouse and other relatives (e.g. children, parents, brothers/sisters, etc.).

What happens to the property of a single person after death when there is no Will in California?

If the decedent was not married, his/her assets pass to cascading list of relatives under Probate Code 6402 starting with his/her children (and their “issue”), then parents, then brothers/sisters, etc.

The headings listed below are used to give the reader a general idea of how assets will be transferred, and should not be relied on without speaking with a qualified estate planning attorney. We have referenced the actual text of the probate code below which is current as of February of 2019.

Who inherits property if there is no Will in California and the deceased is not married?

Except for assets that would not be a part of a probate estate (as defined below), if an unmarried decedent passes away without a Will, his/her assets will likely be distributed as follows:

The headings listed below are used to give the reader a general idea of how assets will be transferred, and should not be relied on without speaking with a qualified estate planning attorney. The actual text of the probate code

1. First to the Children of the Deceased (or their children’s children, or children’s children children*)

“(a)      To the issue of the decedent, the issue taking equally if they are all of the same degree of kinship to the decedent, but if of unequal degree those of more remote degree take in the manner provided in Section 240.”

CA Probate Code 6402 (a)

  Definition of Issue: “Issue” of the decedent is all of his or her lineal descendants, of all generations, with the relationship of parent and child at each generation being determined by the definitions of child and parent.

2. Second to the parents of the deceased

“(b)      If there is no surviving issue, to the decedent’s parent or parents equally.”

CA Probate Code 6402 (b)

3. Third to the children of the deceased parents (aka the decedent’s brothers and sisters)

“(c)      If there is no surviving issue or parent, to the issue of the parents or either of them, the issue taking equally if they are all of the same degree of kinship to the decedent, but if of unequal degree those of more remote degree take in the manner provided in Section 240.”

CA Probate Code 6402 (c)

4. Fourth to the decedent’s grandparents:

“(d)      If there is no surviving issue, parent or issue of a parent, but the decedent is survived by one or more grandparents or issue of grandparents, to the grandparent or grandparents equally, or to the issue of those grandparents if there is no surviving grandparent, the issue taking equally if they are all of the same degree of kinship to the decedent, but if of unequal degree those of more remote degree take in the manner provided in Section 240.”

CA Probate Code 6402 (d)

5. Fifth to the other children of the Grandparents (aka the decedent’s aunts and uncles):

“(e)      If there is no surviving issue, parent or issue of a parent, grandparent or issue of a grandparent, but the decedent is survived by the issue of a predeceased spouse, to that issue, the issue taking equally if they are all of the same degree of kinship to the predeceased spouse, but if of unequal degree those of more remote degree take in the manner provided in Section 240.”

CA Probate Code 6402 (e)

6. Sixth to the children of a predeceased spouse:

“(f)      If there is no surviving issue, parent or issue of a parent, grandparent or issue of a grandparent, or issue of a predeceased spouse, but the decedent is survived by next of kin, to the next of kin in equal degree, but where there are two or more collateral kindred in equal degree who claim through different ancestors, those who claim through the nearest ancestor are preferred to those claiming through an ancestor more remote.”

CA Probate Code 6402 (f)

7. Seventh to the decedents Next of Kin

“(g)      If there is no surviving next of kin of the decedent and no surviving issue of a predeceased spouse of the decedent, but the decedent is survived by the parents of a predeceased spouse or the issue of those parents, to the parent or parents equally, or to the issue of those parents if both are deceased, the issue taking equally if they are all of the same degree of kinship to the predeceased spouse, but if of unequal degree those of more remote degree take in the manner provided in Section 240.”

CA Probate Code 6402 (g)

Will a Probate be Required on my Death in California?

If a decedent dies owning more than $166,250 of assets (excluding certain assets, as set forth below), someone (usually known as an “Executor” or “Administrator”) will be required to petition the Probate Court to:

• get a judge’s approval to collect the decedent’s assets;
• pay the decedent’s debts and taxes, and
• thereafter distribute all remaining assets to the decedent’s beneficiaries.

This will happen either according to the instructions the decedent set forth in his/her Will or as determined by California’s intestacy laws as provided above if the decedent died without a Will.

What Assets Are Not Included in Probate in California?

In calculating the $166,250 probate number referenced above, certain assets are excluded, including but not limited to:

1. Assets owned by a living trust;
2. Assets (e.g. 401(k)s, IRAs, life insurance policies, bank accounts with “payable on death” designations, etc.) that have beneficiaries properly designated;
3. Assets owned in “joint tenancy” with someone else; and
4. Mobile homes and automobiles.

What will happen to my home if I die without a Will or Trust?

If you own a home in California, you likely need a Trust.  The reason being, most (just about all) homes in California are worth more than $166,250, and if you’ve read this far, you know that probate may be required if you have more than $166,250 of assets in your name on your death.

If, however, you have a Trust, and your home is owned by your Trust on your death, your home would not be subject to the costly and time-consuming Probate process. 

In this event, the Trustee of your Trust would distribute your home (or the proceeds from the home if it is sold by your Trustee after your death) to the beneficiaries named in your Trust without involvement of the Probate Court.

Who will take care of my Children on my Death if I die without a Will or Trust?

Hopefully you and your children will be lucky enough to have a relative or friend willing and able to take care of your children on your death. 

Sadly, this is not always the case.  In the event such a relative or friend is willing and able to care for your children, a Probate Guardianship proceeding may be necessary.  In this case, such a person would file a Petition for Guardianship with the local Probate Court.

In the event more than one (1) individual is interested, willing and able to care for your children, your nomination of a Guardian for your children may carry weight with the Probate Court in determining which such individual is ultimately appointed. 

For this reason, it is common practice to nominate your choice for Guardian(s) of your Children in your Will.

Who to Contact if Someone you know dies without a will or trust in San Diego?

If you have any questions about how to avoid probate or how to set up an estate plan please feel free to reach out to attorney T. Owen Rassman. Attorney Rassman can help you with Estate Planning, assist in the probate process, or help a trustee administer an estate. The first consult is always free, so please call Rassman Law today (760) 933-8254.

A California Financial Power of Attorney (“POA”) is a document that gives a third party (your “Agent”) the legal authority to make certain financial decisions on your (the “Principal’s”) behalf.  

What should be included in a California Financial Power of Attorney?

Your POA should clearly state whether it is:

1. Immediate or Springing California POA:

Immediate vs. Springing: Immediate POAs authorize your Agent to make financial decisions on your behalf immediately after you sign and notarize the POA; whereas Springing POAs authorize your agent to make these decisions on your behalf only after you have been deemed by a doctor (or in some cases two (2) doctors) to lack sufficient capacity to manage your own finances (i.e. they “spring into effect on this medical determination).

2. Durable Power of Attorney or Non Durable California Power of Attorney

Durable vs. Non Durable: Durable POAs authorize your Agent to make financial decisions on your behalf during the period of your incapacity; whereas Non-durable POAs expire if/when you are determined to lack capacity.  Non-durable POAs are often used to achieve only a specific purpose (e.g. to sign a specific document or take a specific action on your behalf if you are not available / present to sign the document yourself).

3. Limited Power of Attorney or General Power of Attorney

Limited or General:  Limited POAs grant your Agent only limited authority (e.g. to sign a specific document or take a specific action on your behalf if you are not available / present to sign the document yourself); whereas General POAs can be as broad as you wish.

What powers can be authorized under a California Financial Power of Attorney?

The legal authority your Agent has depends first and foremost on how the POA is drafted and what terms are set forth therein. 

Powers granted under POAs include, but are not limited to:

• Real Property transactions (e.g. sell, purchase, lease);
• Tangible personal property transactions (e.g. sell, purchase, lease);
• Stock and bond transactions (e.g. sell, purchase);
• Commodity and option transactions;
• Banking and other financial institution transactions including access to safe deposit boxes and authority to withdrawal or add to the contents;
• Business operating transactions (e.g. operate a business on your behalf);
• Insurance and annuity transactions;
• Estate, trust, and other beneficiary transactions (e.g. transfer property to / from a trust, name beneficiaries);
• Claims and litigation (e.g. file / defend a lawsuit on your behalf);
• Personal and family maintenance (e.g. support family members);
• Benefits from social security, medicare, medicaid, or other governmental programs, or civil or military service (e.g. access to / apply for such benefits);
• Retirement plan transactions (e.g. access to / withdraw from retirement accounts; and
• Tax matters (e.g. sign tax returns, settle tax disputes).

What are the legal requirements for a valid California financial power of attorney?

The specific laws that govern the legal requirements for financial POAs are located in California Probate Code, starting at Section 4000.  Generally, the requirements for a California Financial Power of Attorney are that:

1. The Principal (person who is making the POA) must have legal capacity (meaning of at least 18 years of age and of sound mind); and
2. Executed either 1) in front of a notary public or 2) before two witnesses. If the POA authorizes the Agent to have power over real estate matters, a notary is required.

Who should have a California Financial Power of Attorney in Place?

1. People with Children;
2. People who own a home;
3. Single individuals
4. Married couples;
5. Anyone who owns assets or has bills to be paid;
6. Most people over the age of 18;

In short, most individuals benefit from having a Springing, Durable POA in place. This is primarily because incapacity could strike any of us at any time. Without a valid POA in place there may not be someone available to manage your finances (e.g. pay your mortgage, rent, utilities, health care bills; sign tax returns; file / defend lawsuits; etc.).

In that event, a costly and time-consuming process through probate court is required to appoint a conservator to take actions on your behalf.  Others yet may need a Limited, Durable POA if certain transactions are anticipated and the parties know the Principal will not be available to sign documents. 

A California Financial Power of Attorney is just one piece to a comprehensive estate plan. When done correctly it will help to carry out your wishes with as little court involvement and unnecessary expense as possible.

Why hire an estate planning attorney to draft your California Financial Power of Attorney?

In today’s world, it’s not difficult to find POA forms online.  A simple online search for “California Financial Power of Attorney” will result in numerous forms from which to choose. You will find “Statutory Form Power of Attorney” – a one-size-fits all POA approved by the California state legislature. 

For some, such forms are better than nothing.  For others, such forms create unanticipated problems and create more harm than good. Especially because the form is not entirely without ambiguity and uses terms that may not be understood by all.

Internet POA forms

You should not take POA forms lightly considering their far-reaching impact.  For example, would you grant someone authority to access your bank account, even if you are fully competent and manage your own finances? 

For most, the answer would be “no”. However, a poorly drafted and signed POA may grant the authority to allow this. Further, the “Principal” is bound by the Agent’s actions. This includes foolish and/or negligent actions. For example, if your Agent signs a loan to purchase an asset (on your behalf), you will be bound to the debt regardless of whether it made sense for your Agent to do so.  For these reasons, and many more, you should discuss your POA with an experienced estate planning attorney before printing and signing a form you found online.

Do I need to file a California Financial Power of Attorney?

Most POAs are not filed with any government agency. However, you should talk to your attorney about possible exceptions. Keep the original POA in a safe place. It should be accessible not only by you, but by someone you TRUST. Without the original available, your Agent may not be able to exercise his/her authority to act on your behalf when the need arises. 

One exception to this rule relates to real estate transactions, when it may be necessary to record the POA with the County Recorder’s Office.  In addition, in certain cases, it may be advisable to record the POA with the County – doing so could prove beneficial in the event the original is lost and your Agent needs to rely on a certified copy from the Recorder’s Office.

Questions About California Financial Power of Attorney?

If you or a loved one has any questions about putting in place a valid California Financial Power of Attorney, we are here to help. At Rassman Law our experienced Estate Planning Attorney T. Owen Rassman has set up hundreds of POA’s. Initial Consults are always free so feel free to contact us online or give us a call today! (760) 933-8254

• Who will be the person(s) in charge of my medical decisions if I do not have the capacity to make them myself?
• Do I want my life to be prolonged in the event of an incurable illness that will result in my death within a relatively short time, if the risks and burdens of treatment outweigh the benefits?
• Do I want pain relief?
• Do I want to be buried or cremated?

On incapacity or death, however, the initial Trustee will be replaced by a Successor Trustee(s).  As such, it is critically important that you choose not only someone you “trust” (pardon the pun), but someone who has a sufficient level of maturity, integrity and financial acumen.  Remember, your Successor Trustee will have legal authority to manage, invest, sell, and encumber (to name only a few Trustee powers) the Trust’s assets.  More often than not, clients choose family members and/or friends as their Successor Trustee(s).