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Important Estate Planning Terms to Know

Older couple going over documentsHow detailed do your plans need to be for the future? That can depend on a lot of factors, but preparation for the future and the unforeseen — commonly called “estate planning” — must be done not only for the sake of your loved ones but for yourself as well.

Simply defined, estate planning involves designating who gets your assets once you’re gone and who will make financial and healthcare decisions on your behalf should you become incapacitated.

Though that makes it sound simple, good estate planning involves generally more than just writing out a will.

If you’re in or around Sacramento, Jackson, Placerville, or El Dorado Hills, California, contact our team of estate planning attorneys at the Equal Justice Law Group, Inc., to help you analyze your situation and implement your desires for the future.

Basic Estate Planning Terms

What follows below is a list of terms commonly used in estate planning to help familiarize you with the different tools at your disposal:

  • Will: A legal document that assigns your property to your designated beneficiaries after your death. Wills in California must be witnessed and signed by two disinterested parties, i.e., persons not named as beneficiaries in the will.

  • Holographic Will: A will that is handwritten and signed by the person writing the will, called a testator. Holographic wills can be valid in California if they meet certain conditions. Holographic wills do not to be witnessed.

  • Probate: This is a legal procedure taking place in a courtroom in which the last will and testament is put into action, including paying off all remaining debts and dividing up assets as specified in the document. Probate can take months or a year or more.

  • Intestate: This term refers to dying without a will. The decedent’s debts and assets must still go through probate court, but the court will basically divvy up assets according to formulas it uses based on people’s relationships to the decedent.

  • Executor: Also called an administrator or personal representative, this is the person named in your will to carry out your wishes during probate. If you die intestate, the court will choose or designate an executor.

  • Beneficiary: A person to whom you leave assets by designating them in a will, or to whom the probate court gives your assets, in part or whole, if you die intestate. A beneficiary named in an insurance policy or retirement account will not be subject to probate proceedings.

  • Joint Assets: Property, bank accounts, and the like are often held jointly with the “right of survivorship” conferred upon the living party after the other dies. These assets pass automatically and are not subject to probate, nor can they be assigned to anyone else in a will.

  • Tenancy in Common: In contrast to joint assets, property held as tenants in common means each partner owns a specific share of the property. That share can be re-assigned in a will.

  • Trust: There are different types of trusts and different reasons for using them. Generally, trusts are a way to assign assets to a trustee — either yourself or someone else — while you’re alive or after you become incapacitated. Property in trusts generally avoids probate proceedings and can enjoy tax advantages.

  • Power of Attorney: A power of attorney confers upon another person the authority to make financial and/or healthcare decisions for you, according to guidelines and wishes you specify. A durable power of attorney endures even after you become incapacitated. A non-durable power of attorney expires upon your incapacitation. You can also set up a power of attorney that kicks in only upon certain conditions (such as incapacitation) or is limited to a certain circumstance in life.

  • Advance Directive: This document specifies your wishes should you need medical care and are unable to make decisions yourself due to incapacitation. For instance, do you want to be revived at all costs or, as the saying goes, let them “pull the plug”?

  • Guardianship: You can specify in your will a person to be the guardian of your underage children. If you don’t, and there’s no spouse or legal partner to assume caregiving, the court can appoint a guardian. A guardian might also be appointed if you become incapacitated and there is no one authorized to make financial and medical decisions for you.

  • Conservatorship: If, for instance, a beneficiary in a will is deemed incapable of making proper decisions or caring for himself, the probate court can appoint a conservator to ensure the conservatee has proper food, clothing, shelter, and healthcare. A conservator might also be given the power to control the estate.

Hire an Experienced
Estate Planning Attorney

As you can see, there are many options and tools available for ensuring a smooth transfer of assets after you’re gone, and even for protecting you and your property while you’re alive.

Don’t keep putting things off until life’s unexpected changes suddenly render you incapable of creating the necessary documents. Instead, rely on an experienced and knowledgeable estate planning attorney to assess your situation and help you arrive at the optimal approach to achieve your desires, both for today and after you’re gone.

Our team of estate planning attorneys at the Equal Justice Law Group has been helping clients for 25 years make these difficult but vital decisions. Call us today to get started if you’re in or near Sacramento, California.