Newsletter | Mar/Apr 2007
|by Valerie Surh|
Stepping into the historic Russ Building complete with granite floors and marble wainscoting, I thought what a great place to host an OWA event. Members were given a peek at an architectural jewel for our meeting about preparing living trusts. Nancy Jarvis, Senior Partner at Farrand Cooper, PC, began her lecture to a full house squeezed around the firm's. conference table and Florence Knoll vintage chairs. Nancy delved into the difference between Wills and Revocable Living Trusts. Taking note of demographics of the audience, she assured the group that what she had to say was applicable to all ages, though especially to those with children.
Out of the entire night the main points that I took home with me are listed below. There are three things that Nancy suggested that all of us should prepare for the future.
1. A Will
2. A Revocable Living Trust
3. An Advance Health Care Directive
1. A Will by definition only becomes effective after death, not if you are incapacitated. After death, all of one's property proceedings carry into the court and become public information. The public has access to the names of the beneficiaries as well as the various properties listed in the will. The court administration of property after death is known as probate, which can easily last a year or two. Besides being a long and expensive process, the frustration probate brings can taint the grieving period as loved ones try to reconcile the deceased's wishes. Nancy recommends setting up a Will that states that you have a Revocable Living Trust; thus transferring the entire process to the Revocable Living Trust.
2. A Revocable Living Trust is the management and distribution of your property upon your death or incapacitation. A Revocable Living Trust, like a Will, can be modified or eliminated at any time by you, the trustor or grantor, as long as you are competent. A Revocable Living Trust enables you to avoid the time and money associated with a Will in probate by letting you appoint a trustee to manage your Living Trust. Since a Trust is a private document, it is not filed in public documents like Wills and therefore escapes public access. This circumvents probate because when a Revocable Living Trust is set up assets are collected and transferred to the appointed trustee before death. Nancy stated the importance of listing alternative trustees in case the appointed trustee is unavailable. In the case that both a Will and Trust exist with separate instructions, the Trust takes precedence over the will. A benefit of Revocable Living Trusts is that they allow married persons to retain separate property even after accruing community property during marriage. Upon death, current law requires that a notice be sent out to all beneficiaries advising them to obtain a copy of your living trust.
3. An Advance Health Care Directive is a very important document to set up. The California Advance Health Care Directive is a document that instructs others about medical care if you are unable to make decisions on your own. It also allows you to name an agent that will handle health care decisions upon your incapacitation. Unlike the Natural Death Act Declarations and Durable Powers of Attorney for Health Care, the Advance Health Care Directive does not expire. FYI, if you have a Durable Powers of Attorney for Health Care from before 1992: IT HAS EXPIRED! You need to replace it as soon as possible. The Advance Health Care Directive can be set up for anyone 18 years or older of sound mind and acting of their one free will. It does not expire unless you revoke it or include a specific expiration date in the directive. Nancy recommends that instead of having witnesses sign this form, simply get the papers notarized for a nominal fee.
One important reminder that Nancy impressed upon the group is to revisit the Will, Revocable Living Trust, and Advance Health Care directive every so often to ensure that these documents reflect your current wishes. A few stories from the OWA membership that were shared underscored that making a Will, a Revocable Living Trust, and/or an Advance Health Care Directive once and forgetting about it can result in unintended consequences.
The event could have easily surpassed two hours. Questions stemming from personal experiences and curiosity filled the room. Expertly and clearly, Nancy answered each question. Only after limiting the questions did the first 2007 OWA event come to an end. Equipped with the knowledge of the documents to complete, members had a new appreciation of the process and the expected results from preparing the necessary paperwork in advance. We also found out what happens when those documents are left to wishful thinking or bad advise. So please take the time to make the necessary arrangements with an Estate Planner for the benefit of your family and friends. Lastly, while it may be awkward to discuss these items with your family it is extremely important to do so and be sure to keep copies of the paperwork in safe places.