Giving Thanks by Giving the Gift of Planning

Thanksgiving has always been one of my favorite holidays. It’s a mid-week pause to reflect and give thanks as we approach the end of the year. After the challenges of 2020, making the time to remember what we each have to be grateful for is especially important.

We may not all be able to gather with our extended families and friends this year. But we can certainly make the best of what we can do and express gratitude for what we have. I’m hoping to do some fun baking and cooking projects with Charlie over the Thanksgiving weekend. Bob’s birthday is the Sunday after Thanksgiving, so we have a special post-Thanksgiving birthday treat planned. And I am sure we will fit in a few card and board games!

The Gift of Planning for Your Family’s Future

I apologize right now for the length of this blog, but I want to address something every family should be thinking of, especially in these uncertain times: planning ahead for your family’s future. You will feel better for having done it, and so will they.

As an estate planning attorney, I am lucky to be able to help guide clients as they thoughtfully plan for their loved one’s futures. Estate planning is an act of love, a gift that an individual passes on after they have gone. I’m not just talking about the actual dollars or things that are given. The act of planning and preparing is just as valuable a gift as any gifts of monetary–or sentimental–value.

By planning and preparing, you give the gifts of:

• Creating a process for what happens after you are gone, so your loved ones don’t have to figure it out on their own;
• Memorializing your wishes so no one has to guess or assume what you wanted; and
• Having your assets and other essential information gathered into one place.

The Basic Tools of Planning Ahead

The tools we use to facilitate your planning are:

1. A Trust or Will
2. Guardian Designations for Minor Children
3. Health Care Directive and HIPAA
4. Power of Attorney

A Trust or a Will

Trusts are not just for the super-wealthy! Most people in California use a Revocable Living Trust rather than a will for estate planning. This is because you can only avoid probate–and costly probate fees–if the total of all of your assets is less than $166,250. This is the appraised value of all of your assets, regardless of whether you owe money on an asset. For example, If you own a home that is worth $500,000, and you owe $550,000 on the mortgage, your heirs will still pay a minimum of $13,000 in probate fees.

Since very few houses in California are worth less than $166,250, anyone who owns a house in California is better off with a Revocable Living Trust to pass their assets on to their heirs and beneficiaries.

A Revocable Living Trust also has the advantage of being private, more efficient, and quicker than having to probate a will through the probate court.

Guardian Designations

This is a hard topic for most parents with young children to talk about. When it comes to your children, there is no perfect answer, because no one can replace you. And agreeing on which family member, or friend, will replace you is often one of the most difficult discussions parents can have.

The idea is to have a “just in case” plan in place. And that plan changes as your kids get older. The worst plan is no plan. Your children do not automatically go to a relative after both parents have died: a court will decide who will be your children’s guardian. Expressing your wishes by having a written designation of guardian is the best way to avoid a court deciding your children’s future.

A few things to remember:

1. Plan A is to live a long life! Nobody except you takes care of your children until and unless you have both passed.
2. Nothing is set in stone. As the kids get older, and as your lives change, you will make updates.
3. Did you know that you can designate one person to be the guardian in charge of finances and a different person to be the guardian the child lives with?
4. I see this over and over—people have such a sense of relief to have some kind of plan in place, even if they think they might want to change it later.

Health Care Directive and HIPAA

Estate planning is not just about who gets what after you die. Having a plan in place for making medical decisions in the event you are incapacitated will relieve enormous stress from your family in an emergency situation. Stating your wishes, as well as designating the person–or people–who will make decisions for you when you cannot is best done in advance of an emergency. This is done by having an Advance Health Care Directive, a document that I include as an essential component of estate planning.

Likewise, having a HIPAA is critical when you are in an emergency medical situation. HIPAA protects the privacy of your medical records. But it also may prevent doctors and nurses from talking to your spouse or your family when you are hospitalized or under medical care. (Spouses do not have an automatic right to medical information!) When you sign a HIPAA authorization, you give permission for healthcare providers to share information with the loved ones you designate.

Power of Attorney

Just as an Advance Health Care Directive allows someone else to step in to take care of medical decisions when you cannot do so yourself, a Power of Attorney allows someone to step in to take care of finances if you are incapacitated. So while you are layed up in the hospital, someone can take care of your electric and phone bill, even check your P.O. Box, if you have designated a Power of Attorney.

A Personal Note

The Mendocino DeCarlis are all healthy and adjusting to Charlie’s homeschool schedule. I am still primarily working from home, and somehow working more hours than when I was keeping office hours! Email is definitely the best way to reach me. If you call me, the remote receptionist may ask if you want to set an appointment for me to call you back. Your choice: leave a message, leave a voice mail, or set a call-back time–I will definitely get back to you!

Finally, I love my clients and referrals are the best thank you, anyone, can give me. So if you know anyone who needs estate planning, I would VERY much appreciate the referral. Clients do not have to be local–with Zoom and the telephone, I can work with anyone anywhere in CA.

Take care and stay safe!