Two out of three Americans do not have crucial estate planning documents in place. Without a will or trust that states your wishes, you leave important decisions up to a local court and state laws.
Whether you are just starting to think about estate planning or have a plan in place, these tips from JFCS Board member and Endowment Committee Chair Natacha Kolb, an estate planning attorney, and Rebecca Paul, Director of JFCS’ Fiduciary Services and a licensed attorney, will help you stay on top of your planning.
Prepare these four priority documents to record your wishes around health care, finances, and your estate:
- Advance Health Care Directive*—Specifies your wishes and who you would like to make decisions in the event you cannot make them yourself.
- Financial power of attorney—Appoints someone of your choosing to manage your finances for you should you ever become unable to do so.
- Trust—Functions like a will and avoids the delay, costs, and lack of privacy of probate. (Probate is the after-death judicial process by which assets are transferred to one’s beneficiaries.) To achieve this purpose, the title to your property must be transferred to your trust during your lifetime.
- Pour-over will—Often used alongside a trust to minimize probate. If you have a minor child, this document also is used to name a guardian.
*Tip: If you do not yet have an Advance Health Care Directive, you can complete one today. The California Office of the Attorney General provides a free downloadable Advance Health Care Directive form. Find it here.
Set a reminder to review your estate plan with your attorney or advisor every couple of years. You also will want to review the plan following any changes in your financial situation or family’s circumstances (such as marriages, births, or deaths) and if you hear of changes in the law that may impact your estate planning documents.
Carefully consider your choice of trustee or agent for your power of attorney and trust—and identify at least one backup in the event the selected relative or friend is not available. Increasingly, professional, licensed fiduciaries, such as organizations that offer fiduciary services, like JFCS, or financial institutions, are being named as primary or secondary agents.
If you would like to include gifts to favorite charities in your will or trust, your estate planning attorney can recommend which assets may best advance your goals. Retirement plan assets, for example, are often subject to income tax and may be subject to estate tax if left to an individual. However, a charity will be able to receive the full value to support the work you care about.
Natacha Kolb, an estate planning attorney at Sideman & Bancroft, is a member of the JFCS Board of Directors and Chair of the Endowment Committee.
Rebecca Paul, a licensed attorney, is director of Fiduciary Services at JFCS.
The above information is for informational purposes and should not be considered a recommendation or financial or legal advice. As always, please consult with your own attorneys and advisers.