This is the first in a series of six writings about estate planning. This writing will discuss the goals of estate planning and how things can go wrong for someone who has not done it. Five short writings will follow that will discuss specific documents and other things.
Broadly speaking, there are two goals of estate planning. The first goal is to distribute assets at a person’s death the way she wants and efficiently. Efficiently means with a minimal amount of effort, delay, taxes, fees, and other expenses. This first goal is what most people have in mind.
Most people do not give as much thought to the second goal of estate planning, which may actually be the more important of the two goals. The second goal of estate planning is to make sure that someone a person knows and trusts will have the legal authority to take care of him if he cannot take care of himself anymore in the future for some reason. Someone might not be able to take care of himself if, for example, he was in a car accident and now he is in a coma, he suffered a stroke, he has dementia, etc.
Estate planning is drafting documents to accomplish those two goals. The more common estate planning documents are wills, trusts, powers of attorney for financial or asset management, and powers of attorney for health care (often called advanced health care directives). Again, a discussion of these documents will be in later writings.
If someone does not have the proper estate planning documents in place when she dies, then her assets will go (be distributed) to people based on the provisions of California law (and not necessarily to people she wants to receive them), and a probate decedent’s estate court proceeding may be necessary at her death. Also she will have no input regarding who is in charge, and it may be someone she would not want to have in charge of her affairs. A probate decedent’s estate court proceeding normally takes one to two years or more.
(The probate decedent’s estate court proceeding will be required if her assets at death total more than a certain amount, and in California it is very common for people to have more than that amount of assets, especially if they own a home.)
Similarly, if someone does not have the proper estate planning documents in place when he becomes unable to care for himself anymore, then a conservatorship court proceeding may be necessary. Again, he may have no input regarding who is in charge, and it may be someone he would not want to have in charge of him. A conservatorship court proceeding would last for the remainder of his life.
Because both types of court proceedings are a lot of work, take a long time, and can be quite costly, they are something that most people want to avoid.
Both of these types of court proceedings also are very public. Anyone can review the documents filed with the court and listen in during the court hearings with the judge. That is another reason why most people want to avoid these types of court proceedings.
Again, one can avoid all of this by having proper estate planning documents in place. Estate planning is something that every adult should consider.
The next post (#2 of 6) will discuss some of the estate planning documents including the will.