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What Are the Legal Implications of Failing to Update Your Estate Plan in California?

What Are the Legal Implications of Failing to Update Your Estate Plan in California?

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Estate planning is one of the most important things you can do to help guarantee your loved ones’ security. Whether you’re just starting a family or approaching your golden years, estate plans make sure people are taken care of after you’re gone. They also make sure all your last wishes are fulfilled.

Because they necessarily involve thinking about endings, many people stop thinking about estate planning once they’ve completed it. However, an estate plan can be a living document. This means it can change over time. These changes can include adding additional people, removing others, and including new assets and finances. Not updating your estate planning can leave your assets in legal limbo. It can also mean certain friends and loved ones not inheriting property and assets you intended for them to receive.

What is Estate Planning in California?

Estate planning is the process of making sure all of your business and affairs will be taken care of after you are gone. While many people are familiar with the concept of a will, this is only one item that can be included in a wider estate plan. A will is a simple document. It can distribute assets after you are gone, and also leave instructions for funeral arrangements and custody of minor children. Estate plans are broader. They contain instructions for how you want your loved ones to carry out your wishes under a variety of circumstances. Estate plans can include:

  • Living Trusts
  • Living Wills
  • Power of Attorney
  • HIPAA Authorizations
  • Medical Directives
  • Pour-Over Wills

A Living Trust is a legal arrangement you make while you are still alive that allows you to make sure your assets are going to be distributed properly after your death. It also provides for management of your assets in case you become incapacitated. You will designate an individual called a trustee and transfer management of certain assets to them. (Often during your lifetime you are the trustee and you designate a successor trustee to act if you become unable to.) Upon your death, this individual will distribute your assets accordingly. This arrangement eliminates questions of inheritance because you have already made your wishes known while you are still alive. In some circumstances, money and assets placed in trusts may not be subject to certain taxes, which can be beneficial both for you and loved ones. If you have a trust, another document it is important to consider is a pour-over will. This is a type of will that designates or “pours over” anything not explicitly named in your will to be transferred into the trust. This ensures a trusted individual can take responsibility for and manage any assets not transferred to the trust during your lifetime, or that was left out of your will.

Medical directives inform your loved ones of your wishes for your healthcare treatment and designate an agent to make health care decisions for you if you become unable to. You can also execute a Do Not Resuscitate (DNR) order. A DNR gives instructions for doctors not to attempt to revive you under certain circumstances, such as if you might remain in a coma.

A living will contains instructions for your loved ones in certain narrow circumstances if you become incapacitated due to illness or injury. Power of attorney designates a loved one or representative to make legal decisions on your behalf. A HIPAA authorization will give designated loved ones or representatives access to your medical and healthcare information. This can help them make informed decisions about your care if necessary.

What Happens if I Don’t Update my Estate Plan in California?

Life changes happen often. We have children and grandchildren and make new friends. Sometimes people we expected to outlive us pass away unexpectedly. We may come into possession of money or assets we didn’t expect. This is why it’s important to keep your estate plan up to date with your own life circumstances. Estate plans contain legal documents. These documents represent your explicit wishes for your money and property at the time they were drafted. If you pass away or become incapacitated, the wishes contained in these documents are legally binding. If you don’t keep your estate plan up to date, several negative circumstances could arise.

For example, if you have children or grandchildren after your estate plan is in place and they are not named in any documents, they could have difficulty inheriting. This is especially true if you didn’t anticipate having children or grandchildren at the time and named other beneficiaries. Another example is if you have a living trust but the trustee unexpectedly died before you. Not updating your estate plan may leave the trust without a trustee to manage your assets past your death.

You may also no longer wish a named trustee to manage your estate. This could be due to your relationship with them having changed. You may also have identified someone better suited to manage your estate. If this person is still named as trustee in your estate plan, they will still have legal authority over your assets.

Similarly, you may no longer want certain individuals to inherit money or property. This could be because you had children in the meantime and now want assets to go to them. It could also be because your relationships with certain people have changed and you simply no longer wish for them to inherit your assets. Regardless, if someone is named in your estate plan as an inheritor or beneficiary, they will be able to legally claim assets. This is why it’s important to keep your estate plan up-to-date to reflect your current wishes.

How Do I Keep My Estate Plan Up-to-Date in California?

Keeping your estate plan updated is key to making sure they reflect your latest wishes for your money and property. This will ensure all of your important friends and loved ones are cared for. Estate planning is complex. Establishing an estate plan in the first place can be difficult. Updating an estate plan can be equally challenging.

If you or a loved one are thinking about updating your estate plan, don’t hesitate to contact Patricia Scott Law, located at 2258 Santa Clara Suite 2 Alameda, CA, 94501, a quarter mile Northwest of the historic Alameda Theatre & Cineplex and one-and-a-half miles Southeast of Fortman Marina. Our lead attorney Patricia Scott, and her associate, Chris Aria bring a deep degree of warmth and compassion to all of their cases and understands how sensitive and difficult estate planning can be. Patricia’s background in grief counseling gives her an extra level of sensitivity and understanding other attorneys may not have, which she has imparted to all of her team. She gives each of her clients the highest level of care and commitment to make sure they know they’re genuinely cared for.

Estate planning can be difficult. Updating an estate plan can be even harder. If you or a loved one need to update your estate plan, please call us today at (510) 694-1098 or email us for a complimentary thirty-minute consultation. Patricia Scott Law can help make a hard process easier.

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