ESTATE PLANNING DOCUMENTS EXPLAINED

 

REVOCABLE LIVING TRUST

With a revocable living trust, your assets (your money, house, etc) are held in trust, administered for your benefit during your lifetime and during your potential incapacity, and then distributed at death to your designated beneficiaries.  As the name implies, a revocable trust can be amended or revoked by the trust creator so long as he or she has the requisite capacity.

 

CERTIFICATION OF TRUST

A certification of trust is a document that a trustee supplies to a third party (bank, real estate agent) that identifies the name and date of the trust; the trustee(s) of the trust; and the powers given to the trustee(s).  Thus, a certification of trust is basically a summary of the trust in which prevents the disclosure of personal and private family information to third parties.

 

GENERAL ASSIGNMENT

A general assignment is a document that declares and evidences the trust creator’s intent that certain property, whether real estate or personal property, is held in the trust.   A general assignment is basically a catch-all document that will help in the event that an asset was inadvertently not held in the name of a trust.  Thus, a general assignment can be used to avoid probate of assets not held in the name of the trust.

 

ASSIGNMENT OF TANGIBLE PERSONAL PROPERTY

An assignment of tangible personal property is a document whereby the trust creator declares and evidences the intent that tangible personal property (not real estate) is held in the trust.   In other words, a general assignment is a document that says that all tangible property such as household furnishings, jewelry, antiques, coins, etc., are held in the trust.

 

POWER OF ATTORNEY

A power of attorney for financial decisions is a legal document whereby the creator (the principal) appoints another person (the attorney-in-fact) to act on his or her behalf for financial decisions.  Most power of attorneys are “durable” meaning that the power will not expire when the principal is rendered incapacitated.  A power of attorney will expire upon the principal’s death.  A power of attorney for financial decisions

 

ADVANCE HEALTH CARE DIRECTIVE

An advance healthcare directive allows a person to state his or her medical wishes in the event he or she ever becomes sick or incapacitated.  An advance health care directive is an excellent document to help avoid the imposition of a conservatorship of the person.

 

LAST WILL AND TESTAMENT

 

A last will and testament is a testamentary document created by an adult testator that takes effect on his or her death, and which bequeaths property to designated beneficiaries.  California recognizes several types of wills. A formal will signed by an adult testator and witnessed by two disinterested adult witnesses.  (2) A holographic will is a handwritten will signed by the testator, and not witnessed.  (3) A statutory will is a very simple will which a person basically fills in the blanks.

 

POUR-OVER WILL

A pour-over will is a testamentary document created by an adult testator used in conjunction with a revocable living trust.  The pour-over will takes effect on the testator’s death and “pours-over” any non-trust assets to the trustee of the revocable living trust.