Many people are under the mistaken impression that you should be older before you create an Advance Heath Care Directive. They think it's something "old people" do.  The truth is you should consider creating one right after you turn 18 - no longer a minor in California. 

When you become an adult, you are no longer a minor and therefore have the right to give instructions about your own health care.  In fact, others (even parents) are not allowed to make decisions for you without such a legal document because they don't technically have the legal right to do so any longer.  You may not always have the ability to make decisions about your own health care.  If that becomes the case, a duly executed Advance Health Care Directive gives someone else the legal right to make health care decisions for you. It doesn’t matter how old you are; perhaps today you will become a victim of an accident that will put you in a coma.  Who do you want to be making the decisions that will affect you for the rest of your life? With an Advance Health Care Directive, you would have the power to decide who makes crucial life or death decisions for you.  Also, it's not simply about "pulling the plug" but more about designating a legal advocate.  Notice, you don't have to be "old" to create one.  Life doesn't discriminate when it comes to tragedy.

A Health Care Directive essentially allows you to give specific instructions about your health care and allows you to appoint a person to make health care decisions for you if you are unable to do so yourself.  It allows this person, in the event you are unable to do so, to access your medical records (if it's done right) and gives them the power to make decisions about treatments, surgeries, services, or other decisions having to do with your health. You can appoint others if the first person you designated is not willing or available.  The Health Care Directive is the ultimate tool to taking charge of your life and managing yourself. It legally records your health wishes to be enacted if you cannot act for yourself.
             
Now what happens if you don’t have an Advance Health Care Directive? Consider the well-known story of Terri Schiavo, a woman from Florida who didn’t have an Advance Health Care Directive. She collapsed at home, and the lack of oxygen she suffered from caused her to enter a vegetative state. Because there was no legal document/directive as to what her health wishes were, her husband and her parents fought for years about whether to keep her alive in her state or remove her life support. People generally think the spouse is in charge, but that is not the case.  This event took its toll on all those involved, both emotionally and financially.  An Advance Healthcare Directive would have solved this problem.
             
So whoever you are, young or old, 18 or 81, having an Advance Healthcare Directive is very important tool to have in your toolbox in case something occurs.

This blog post is a "guest-post" by my colleagues at the Reape-Rickett law firm.  The attorneys at Reape-Rickett handle divorces, custody matters, child support issues and related family law matters in Santa Clarita, CA and surrounding communities.

What do estate planning attorneys and dissolution attorneys have in common?

The short answer is ‘more than you may think’.  Consider the case of In Re Marriage of Holtemann.  In this divorce case, Husband and Wife were married in 2003 and separated a short three years later.  Husband had a number of assets while Wife did not have many.  As many estate planners know that with considerable assets, spouses must regard considerable taxes upon death if the spouses fail to make the appropriate estate-planning decisions.  These parties did just that and sought the appropriate guidance.  The parties prepared a Living Trust and a Spousal Property Transmutation Agreement so as to minimize their estate tax.  What this Spousal Property Transmutation document set forth was that all of Husband’s considerable separate property was transmuted to community property.  Without getting into too much legal-speak, in a divorce action, when a spouse comes into a marriage with assets he/she had prior to the marriage, and does nothing to affect the title of those assets, they will remain his/her separate property upon divorce.  Things purchased during the marriage will be presumed community property or owned by both spouses.  Back to the Holtemann case.  These parties, again to limit estate taxes, indicated in this document that all of Husband’s separate property was changed (the official word is “transmuted”) to community property.  

In 2006, Wife files for divorce.  After separation, realizing that in the Trust he changed all his separate property from his sole ownership to jointly with his Wife, now states that the Trust is revoked in an effort to cancel the transmutation.  At their divorce trial, Wife, of course, uses the Trust to show all the property is owned 50-50 and she should be awarded her one-half.  The trial court agreed with Wife and awarded her one-half of the property.  Of course, Husband appealed that decision.  The Court of Appeal upheld the trial court’s ruling and Wife was entitled to one-half of the property.  The Appeals Court looked to whether or not there was a change or transmutation of the property from separate to community and not why the parties were interested in making the change, i.e., to save on estate taxes.  The Court of Appeals stated that the evidence at the trial level was clear that Husband was fully aware of what he was doing with the property and the language used in the Separate Property Transmutation Agreement was sufficient and did change the property from separate to community, regardless of the “why” he made the change.   Therefore, as the reader can see, estate planners and dissolution attorneys have more in common than one might think.

To learn more about the lawyers and staff at Santa Clarita, CA family law and divorce lawyers Reape-Rickett Law Firm, call their office at (661) 288-1000 for a consultation.  The Reape-Rickett law firm serves Acton, Agua Dulce, Canyon Country, Castaic, LA, Los Angeles, Newhall, San Fernando, Saugus, Santa Clarita (SCV), Stevenson Ranch, Valencia, and greater Los Angeles County.

An IRA is an Individual Retirement Account.  When it comes to putting assets in the name of your trust, an IRA is an asset that you will not transfer to your trust.  A trust cannot own an IRA.  It must be owned by a human being.  IRAs pass instead by way of designated "beneficiary."  That means, when you set up the retirement account, the financial institution would have asked you who you want to name as your beneficiaries.  In most cases, you will be able to name a primary beneficiary along with a secondary or "contingent" beneficiary.  One of the benefits of the estate planning process is making sure you actually have the correct beneficiaries you wish to have.  Also, many people are surprised to discover they only have a primary beneficiary and no back-up beneficiaries (secondary or contingent).  In some cases, they have the entirely wrong people named.  The estate planning process forces you to check on this issue (not only for your IRA accounts but you should also check any other assets that pass by way of a named beneficiary). 

There are some situations when naming an individual would not be the best idea.  In some cases, naming a trust as a beneficiary is a good idea.  For example, you might be concerned how a child would handle the inherited IRA.  However, to do so, a trust must meet certain minimum requirements.  Also, naming the entire living trust versus subtrusts within the living trust may not be a great idea.  Sometimes, it is better to name certain subtrusts intstead.  For example, instead of naming your entire trust as the beneficiary, you can say "Subtrust for Johnny Smith, per the Smith Family Trust dated 3-27-12."  Otherwise, the oldest living beneficiary of your living trust may govern distributions for all those named and that might not be what you want.   You can also set up a stand-alone IRA Trust to receive the distributions.  This is the cleanest but more expensive route.  Make sure you discuss these options with an experienced estate planning attorney.

Most wealth in this country is lost within one or two generations. Divorces, re-marriage, illness, bankruptcy, lawsuits are among the culprits that can destroy your family's estate. A solid estate plan can help reduce these threats.  

Take charge of your life and utilize the same legal tools the wealthy use to STAY wealthy. Remember...they are not wealthy by mistake. They use the same legal tools that are available to you and me. See www.MansourLaw.com for more information.

Be careful when naming minors as beneficiaries of life insurance policies.  Click here to see a quick 5 minute white-board discussion regarding naming minors as beneficiaries of your life insurance policy.

Joint ownership is not the best way to hold title to assets in many cases.  Check out this short 5 minute video that discusses the pros and cons of Joint Tenancy.  If you want to learn more, call my office to discuss.

http://www.youtube.com/watch?v=twdgThRRoRE

If you don't have an estate plan for your family, there are five things you can do for free to make sure you at least have some basic tools in place.

1.        If you don't even have a will, download a free will form from the California Bar Association (www.CalBar.org).  It's better than nothing, and if you can't find the form, just call my office and we will send you the direct link.

2.        Check your 401k's, IRA's and Life Insurance policies to make sure the correct beneficiaries are designated.  In many cases you might be surprised who is actually listed (or perhaps not listed) as your beneficiary.  This doesn't happen by magic or good intentions.  You have to call the company managing that particular asset and ask them for a beneficiary designation form.  Make sure you name "back up" beneficiaries also known as secondary or contingent beneficiaries.  Also, make sure you ask the company what happens if a co-beneficiary dies.  Does their share go to that beneficiary's children, or does there share go to the remaining designated persons on the form?  Also, if you have minor children, you may not want them listed as direct beneficiaries.  Life insurance should not be made payable to minors in most cases.

3.        Who is authorized to make health care decisions on your behalf if you are unable to do so?  Just because you are married, your spouse isn't automatically entitled to do this.  This is a mistake many married people make - they assume their spouse is in charge and authorized to act simply by being married to them.  It doesn't work that way.  Make sure you sign an Advance Health Care Directive which allows someone to legally act.  While most lawyers provide this as part of a comprehensive estate plan, you can at least get a free entry-level form from the California Attorney General's website.  Again, it's entry-level but it's better than nothing.

4.        Try not to own anything jointly with anyone other than your spouse.  Make sure you think it through and talk to professionals before making that decision.  Joint ownership seems like a good idea at first blush but it's one of the leading causes of "unintentional" disinheritance.  Also, consider a living trust instead of owning assets jointly with your spouse. 

5.        Finally, review your insurance policies.  I don't sell insurance but for families with few assets, there is no better way to infuse a whole bunch of cash to help pay for college, mortgage, etc.  Also, for auto policies, make sure you have plenty of uninsured motorist coverage.  I handle some personal injury cases in my practice and too many people are driving out there without adequate insurance. 

If you wish to discuss any of these issues with me or perhaps set up a comprehensive plan for your family, please feel free to call me at (661) 414-7100 or visit my Santa Clarita wills and trusts website.  I also practice personal injury law, so you can also visit my personal injury website to learn more about that aspect of my practice.

Every good estate plan includes an Advance Health Care Directive that allows others to make health care decisions for you. If you aren't ready to create an estate plan (living trust, will, etc), you can at least get the basic form from the California Attorney General's office by clicking on the following link. Everyone 18 and older should consider one. If you're ready to get serious about your legal affairs, give me a call. In the meantime, consider this: http://alturl.com/nzs6j

With the death of Elizabeth Taylor, we are all reminded that planning ahead is essential.  Back in 1998, Elizabeth Taylor had a near brush with death when she fell and broke her hip.  It was then she decided to create a revocable living trust to protect her assets and make sure her wishes were followed.  Given the fact her estate was worth $600 million to $1 billion, it’s a good thing she planned ahead.   However, it remains to be seen if she dotted all her “I’s” and crossed all her “T’s” as the days go on. 

Estate planning lessons we can learn from celebrities include the following:

1. Doing Nothing:  Jimi Hendrix died without anything in place.  As such, his estate was administered by a stranger (versus someone that he could have chosen) and court battles continued for almost 30 years after he died.  Sonny Bono also died without anything in place which led to a challenge to his estate by a secret “love child” who surfaced and wanted a piece of the pie.
2. Do It Yourself: Former Supreme Court Justice Warren Burger made his own will.  He left out many important provisions (it was only 176 words altogether), and the mistake cost his family thousands of dollars to untangle the mess.
3. Failing to Update Your Documents:  Heath Ledger had estate planning documents in place but they did not address his daughter.  She was born after he created the documents.  As such, by failing to include her, there were some family fights concerning the omission.  Anna Nicole Smith had the same problem.
4. Using Shortcuts:  Princess Diana did not properly gift assets within her estate planning documents.  She instead used a “letter of wishes” that she made herself.  That was not the proper way to gift personal property.  Of course, every state and jurisdiction has its own rules on such gifts.
5. Forgetting to Inform People:  If you have a plan in place, you have to tell people where it is!  Keeping it a secret won’t do you any good.  Famous Olympian Florence Griffith-Joyner did not tell her family where her documents were.  As such, her estate was stuck in the court system for about 4 years.
6. Failing to Complete the Job: We recently learned that while Michael Jackson had a decent estate plan in place, he did not properly fund the trust in many cases.  That means he did not place his assets in the name of the trust.  As such, many assets are still going through the court system.  This is one of the biggest reasons trusts fail.  “Having” a trust is nice, but using it properly is a different story.
7. Lack of Clarity:  Some people leave large sums of money to one child or another.   Whitney Houston’s father named her as the beneficiary of his life insurance policy, but it wasn’t clear if he wanted her to keep all the money or repay certain debts.  Some clients put their children as co-owners on bank accounts and that can lead to arguments in families as well.
8. Who’s In Charge? Groucho Marx had nothing in place which lead to a huge court battle between his family and Groucho’s significant other.  When Groucho got sick, people fought over who would be his “conservator” and therefore in charge of his estate.  The battle sucked tremendous amounts of money from the estate.  A properly drawn estate plan could have avoided that.

Robert Mansour has several profiles about his law office all over the internet.  Building profiles at different websites is all part of Robert's efforts to be found on the internet so that more prospective clients can learn about his law practice.  Here are some of the profiles where Robert Mansour Santa Clarita Office can be found:

Rob's Personal Injury Website

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