Property planning is not just about drawing up a will in the event of your premature death. It prepares for any situation where you are unable to work and ensures that your affairs are in order in the event of death.
What is included in a property plan?
2. Living trust
3. Advanced health care directives
a. Permanent power of attorney
b. Living will
c. Do not revive (DNR) orders
d. Medical order for life-sustaining treatment (POLST)
e. Organ and tissue donation
Will (Prob. §§6100, ff.)
When people think of property planning, they usually think of the will. A will is a document where you can make your final wishes. This document will inform the courts, family and friends who you want to take care of your children as well as how, asset allocation, pet care and more. Without a will, it will be up to the probate court to decide where and with whom your children will live and the distribution of assets.
Living Trust (Prob. § 15400)
A living trust is a trust that allows you to transfer your assets or property to a person of your choice (trustee) while you are still alive. There are essentially two main types of living trusts: revocable and irrevocable. A revocable living trust allows you to place the items in a trust while you are still alive and the benefactor would receive them at your death, after tax. It provides the flexibility to modify the trust, remove or add beneficiaries, set or change the terms of the trust and decide how the assets are managed.
An irrevocable trust does not offer the same flexibility as a revocable trust but has its own advantages. Once an irrevocable trust has been established, you can not change any aspect of the trust (there are some exceptions, but these exceptions come with great difficulty). It offers a benefit to the benefactor in that they will not have to pay tax on the assets at death, nor would they be liable for any taxes on income earned from said assets.
While a revocable trust is easier to establish, an irrevocable trust can be more difficult, and it would be in your best interest to hire an experienced real estate planning attorney in Los Angeles to help you.
Advanced health care directives
Advanced health care directives are another great one that you can not afford to go without. The advanced health care directives consist of several documents that will serve as your voice in the event that you become medically or mentally handicapped. The set of documents can contain:
Permanent power of attorney (Prob. §4650, §4700 and the following)
The permanent power of attorney is a document in which you name a person (an agent) who is to act on your behalf (the principal). This would allow the agent to pay your bills, talk to creditors and more while you are unable to work. It is important to choose someone who has your best interests at heart. A permanent power of attorney as opposed to a general power of attorney only takes effect when the individual becomes incapable of work (if it was created specifically for incapacity for work).
Living will (probate list §4600 ff.)
A living will is directly how your children and assets will be handled in the event of incapacity for work. It is this document where you can make your final wishes. The living will only be effective if you, the principal, are in a persistent vegetative state or irreversible coma.
Do not revive (DNR) orders
The words Revive is not part of the living will. It is a document where you express your wishes if you want to be revived if needed.
Medical order for life-sustaining treatment (POLST)
This document allows you to choose a primary and secondary physician to perform your end-of-life treatment. The secondary will take effect if your primary care physician does not want or can not fulfill your wishes.
Organ and tissue donation
In addition, as part of your living will, you will be able to make your wishes known if you would like to donate any organs or tissues in the event of your death.
It can be a lot to absorb and you may be wondering where to start. The best and safest way to structure your property planning and all that comes with it is to consult and work with an experienced real estate planning attorney in Los Angeles for best results.