Anyone who knows me knows I love to talk about cars. I just returned from Scottsdale, Arizona and the 50th anniversary of the great collector’s car auction known as Barrett-Jackson. Our own Huntington Beach celebrates California car culture with the Donut Derelicts on Saturdays at Adams and Magnolia and the monthly Main Street cruise. Love me some classic cars! Thinking about the machines I’ve seen, I find myself thinking about how a car has many unique and skillfully crafted pieces that all must work independently and together in order for the car to work safely or even to work at all.
What do cars have to do with probate lawyering and estate plans? As the old saying goes: the quality of something is only as good as its parts. This analogy could apply to an overall financial plan – income, savings, retirement, insurance, budget (does anyone budget anymore?), and a comprehensive estate plan – all important elements of a financial picture that “runs well.” Diving even deeper, an estate plan itself must have well-crafted elements that are properly interrelated so the plan will work, and work well.
The foundation for most estate plans in California, the chassis, if you will, must be the versatile revocable living trust. This independent structure allows the trusted “driver” to control the assets placed inside it. The trust is supported by a will, the engine of the estate plan, which must be carefully designed to work with the trust. (Note that in CA, a will alone is not sufficient in most cases.) To manage a situation where the client becomes incapacitated, we add a well-drafted durable power of attorney for finance as the gas pedal and brakes, determining how and when to move the plan forward as needed.
By California law, a separate suite of documents must be created to handle health care decisions. This “steering wheel” has a direct effect to speak for a client who cannot speak for themselves, but also to enable the individuals named in the other documents to fulfill their particular functions.
None of this works without the “gasoline.” A client’s assets must be funded or placed into the trust to make the estate plan run – to enable all the good work that went into the documents apply to the client’s individual situation.
Finally, like special options on a car, high performance engines or superlatively luxurious interiors such as irrevocable life insurance trusts, disclaimer, or ‘credit shelter’ trusts can be added to protect a client from the expensive effects of estate taxes or the attack of creditors on the beneficiaries.
A failure of any of these individual parts could lead to the car running roughly or breaking down altogether and requiring expensive repairs. But when a machine is designed so that all the parts work together in harmony, driving is a pleasure and oh! the places you can go.
To this end, our office is always ready and willing to review your current estate plan for a $250 fee that is applied to any recommended updates. If we can be of service, we look forward to your call.