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Estate Planning > Estate Planning FAQ

Answers to Common Estate Planning Questions


1. What is an Estate Plan?
2. What is a Living Trust?
3. Why do I need a Living Trust?
4. What is a Pour-Over Will?
5. Why do I need a Pour-Over Will?
6. What is a Durable Power of Attorney (DPA) for Finances?
7. Why do I need a Durable Power of Attorney?
8. What is an Advanced Health Care Directive (AHCD)?
9. Why do I need an Advanced Health Care Directive?
10. What is an Asset Map (Schedule of Assets and Debts)?
11. Why do I need an Asset Map?
12. What is Funding Support?
13. What are Letters of Instruction?

1. What is an Estate Plan?

An estate plan outlines your desires for managing your assets, resolving your debts, and providing your care if you cannot do so yourself. An estate plan provides for the care of your dependents and ensures your last wishes are carried out.

At McCunn Law, we typically recommend an estate plan that includes:

  • A Living Trust
  • A Pour-Over Will
  • A Durable Power of Attorney (DPA) for Finances
  • An Advanced Health Care Directive (AHCD)
  • An Asset Map
  • Funding Support
  • Letters of Instruction

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2. What is a Living Trust?

A living trust is a trust created and managed by you and your spouse (if married) during your lifetime(s). You choose one or more successor trustees to manage the trust when you can longer manage it yourself. Typically the trust is left to your children.

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3. Why do I need a Living Trust?

For Your Care
A trust provides for your care and maintenance as long as you are living.

For Your Home
Absent a trust, your home will have to go through probate before it can be awarded to your heirs, which can cost them as much as a real estate commission (estimated 5% of the value of the estate regardless of debt).

To Avoid Conservatorship
A trust facilitates management of your trust property in the event of your incapacity.

To Transfer Property at Death
After your death, the trust helps make the transfer of your trust property easier for your heirs.

For Tax Planning
A trust provides opportunities for reducing and/or postponing taxes that might be imposed upon your heirs after your death.

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4. What is a Pour-Over Will?

A Pour-Over Will confirms your trust, serving as a safety net to transfer any assets that might be found outside the trust, such as those that were acquired or modified after your trust was created. It specifies an executor to oversee the administration of the will, and includes a guardian to raise any minor children and manage the financial affairs of the minor children.

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5. Why do I need a Pour-Over Will?

Because of California Inheritance Law
California law dictates that your heirs by blood inherit your estate. If you want to modify this, for example if you have remarried and want your spouse to share the inheritance, you need a will.

For Your Minor Children
The will is where you specify who will raise your minor children and manage their assets and expenses if you cannot do so yourself.

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6. What is a Durable Power of Attorney (DPA) for Finances?

The Durable Power of Attorney designates an attorney-in-fact to carry your signature authority. This agent can manage your expenses in case of incapacity, and act regarding your financial affairs, such as making decisions regarding your employee benefit retirement account, government benefit, and tax return preparation.

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7. Why do I need a Durable Power of Attorney?

To Manage Your Affairs
Some benefits, such as government benefits and retirement accounts, cannot immediately be placed under the control of the trust. Giving someone your signature authority allows these items to be managed if you are incapacitated.

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8. What is an Advanced Health Care Directive (AHCD)?

The Advanced Health Care Directive designates a health care agent (a conservator) to make medical decisions for you in case of emergency, incapacity or death. An Advanced Health Care Directive includes HIPPA (federal) and CMA (California) medical information privacy releases, Physicians Orders for Life Sustaining Treatment (OLST), and a living will with details regarding your prolongation of life decisions, incapacity planning, and disposition of your remains, including anatomical or organ donations and any funeral arrangements.

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9. Why do I need an Advanced Health Care Directive?

The Advanced Health Care Directive allows someone to speak on your behalf when you are injured and incapacitated. This ensures that a trusted agent can hear your doctor’s advice, see your medical records and make an informed decision regarding your medical care.

For Medical Emergency Planning
The AHCD specifies your 911 list of whom to contact in case of a medical emergency, and grants that person the right to speak on your behalf when you cannot consult with your doctors.

For Incapacity Planning
The AHCD specifies your care instructions in case of long-term incapacity.

To Convey End of Life Wishes
The AHCD allows your agent to determine your long-term life support, and conveys your final wishes regarding the disposition of your remains, including donations.

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10. What is an Asset Map (Schedule of Assets and Debts)?

An Asset Map specifies the location of your assets and credit accounts. Optionally, you may select a private information custodian who has record of your secret passwords to email and accounts. The asset map reflects your estate after completion of the funding process.

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11. Why do I need an Asset Map?

To Provide Estate Information
In most cases, your agents don’t know your estate’s assets and debts like you do. In this day of electronic account management, absent a map to point your agent towards your accounts, the agent may not be able to easily close your affairs and manage your estate.

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12. What is Funding Support?

A trust is like a tin can; it only protects that which is inside. Funding support is access to our experienced support team to make sure we structure your assets to maximize the benefit of your trust and estate plan while minimizing the burden of administrating your estate in case of your incapacity or death.

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13. What are Letters of Instruction?

In every family there are special circumstances where you want to leave specific instructions. Whether this is in how you want minor children raised, who gets specific family heirlooms, how a long term care facility may be used, or your final resting wishes, these instructions can be documented via a Letter of Instruction to your agent.

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