Have you ever asked yourself why estate lawyers (aka estate planning attorneys) always recommend that in addition to a revocable living trust—which everybody advises you to get—you should also have a will, a power of attorney, and an advance health care directive? Is this just a ploy for upselling? The short answer is no. These additional documents address frequent problems and ensure that the revocable living trust and power of attorney work well together and do not collide.
Revocable Living Trust and Will
Can I Have a Revocable Living Trust and No Will?
Yes, you can have a trust and no will, but it is generally not advisable. If you have a trust but no will, any assets not transferred into the trust during your lifetime would be subject to intestate succession laws upon your death. This means those assets would be distributed according to the state’s intestacy statutes, which may not align with your wishes. According to the California Probate Code (§§ 6400–6455), property held in trust passes in accordance with the terms of the trust instrument, while the disposition of the decedent’s remaining assets is governed by intestate succession laws if they have no valid will. Therefore, it is typically recommended to have a will, even if it is just a “pour-over will” that transfers any remaining assets into the trust upon your death.
Power of Attorney
If I Have a Trust That Specifies What to Do When I Lose Capacity, Why Do I Need a Power of Attorney?
Even if you have a trust that specifies what to do when you lose capacity, a power of attorney (POA) can still be beneficial for several reasons:
•Management of Non-Trust Assets: A POA allows your agent to manage assets that are not included in the trust, such as personal property, financial accounts, or other assets not transferred into the trust.
•Handling Financial and Legal Matters: A POA can authorize your agent to handle various financial and legal matters on your behalf, such as filing taxes, managing retirement accounts, or dealing with government benefits, which may not be covered by the trust.
•Flexibility and Backup: A POA serves as a backup in case there are any issues with the trust or if immediate action is needed for matters not covered by the trust, providing an additional layer of protection and flexibility in managing your affairs.
•Avoiding Conservatorship: Having a POA can help avoid the need for a court-supervised conservatorship, which can be costly and time-consuming.
•Making Changes to Your Revocable Living Trust: If your POA includes language that grants the power holder the authority to make changes to your trust, they can do so even if you become incapacitated. This is valuable for making necessary adjustments in response to changes in tax laws. Generally, successor trustees do not have the power to amend the trust unless explicitly granted in the trust document. The POA’s effectiveness in this regard relies on the trust having a corresponding provision allowing the POA holder to make these changes.
Advance Health Care Directives
Why Do I Need Advance Health Care Directives?
Advance Health Care Directives (AHCD) in California are essential for ensuring that your health care preferences are known and respected if you become unable to make decisions for yourself. Here are two key reasons why having an AHCD is important:
1. Specify Your Health Care Preferences
•Treatment Choices: An AHCD allows you to specify the types of medical treatment you do or do not want to receive in various situations, such as life-sustaining measures, pain management, and other medical interventions.
•End-of-Life Decisions: You can state your preferences for end-of-life care, including whether you want to receive artificial nutrition and hydration, resuscitation, or be placed on a ventilator.
2. Appoint a Health Care Agent
•Designate a Decision-Maker: An AHCD lets you appoint a trusted person (known as a health care agent or proxy) to make medical decisions on your behalf if you are incapacitated. This person will have the authority to make decisions according to your wishes and best interests.
•Ensure Representation: By naming a health care agent, you ensure that someone you trust is empowered to advocate for your preferences and make critical decisions when you cannot.
Potential Conflicts Between Power of Attorney and Revocable Living Trust
What Can Go Wrong When Power of Attorney and Revocable Living Trust Are in Conflict?
A common issue arises when a power of attorney includes a provision allowing the power holder (called ‘attorney-in-fact’) to make changes to an existing revocable living trust. This can be valuable for adjusting a trust to new circumstances when the settlor (grantor) is no longer able to make these changes. However, if there is no reciprocal provision in the revocable living trust that allows the attorney-in-fact to make such changes, the attorney-in-fact has no right to modify the trust.
The California Probate Code (§ 15401(c)) states: “A trust may not be modified or revoked by an attorney in fact under a power of attorney unless it is expressly permitted by the trust instrument.”
How Wealth Care Lawyer in San Luis Obispo Can Help
As an experienced estate planning attorney in San Luis Obispo, Klaus Gottlieb of Wealth Care Lawyer excels in creating comprehensive estate plans tailored to your unique needs. My approach ensures that all documents work harmoniously together, providing you with peace of mind.
•Personalized Planning: I take the time to understand your specific circumstances and goals, ensuring your estate plan accurately reflects your wishes.
•Comprehensive Documents: From trusts and wills to powers of attorney and advance health care directives, I provide all necessary documents to cover every aspect of your estate planning needs.
•Coordination and Integration: I ensure that all components of your estate plan, including your trust, POA, and AHCD, are perfectly coordinated to avoid conflicts and provide seamless management of your affairs.
•Expert Guidance: With my expertise, you can be confident that your estate plan complies with California law and addresses all potential issues, providing maximum protection for you and your loved ones.
Conclusion
In summary, while a revocable living trust is a crucial component of your estate plan, it is not sufficient on its own. A comprehensive estate plan also includes a will, a power of attorney, and advance health care directives to ensure all aspects of your personal, financial, and medical affairs are covered. These additional documents provide essential safeguards, ensure that your wishes are followed, and help avoid potential legal conflicts and complications. By working with Klaus Gottlieb, Estate Planning attorney in San Luis Obispo, you can achieve peace of mind knowing that your estate plan is thorough, tailored to your needs, and managed according to your preferences, even if you become incapacitated.
