What are the different types of powers of attorney?

What are the different types of powers of attorney?

There are a number of ways to define powers of attorney. One is to have an immediate power of attorney. As the name suggests, the authority that is granted by the immediate power of attorney is available immediately. And that means that the agent under a power of attorney can take actions as soon as the principal signs the power of attorney.

Another type of power of attorney is what’s called a springing power of attorney. Under the springing power of attorney, the authority that the principal grants to the agent springs into an existence upon a specific event. And the typical event that causes the power of attorney to spring into existence is that the principal becomes incapacitated. And so what that means is that the principal creates a power of attorney, and it is not effective until the principal becomes incapacitated, and then the authority that is granted to the agent springs into existence.

There are other ways to define a power of attorney. There is what’s called a limited power of attorney, and a limited power of attorney is where the principal grants authority to an agent for a limited purpose or a limited time. For example, a principal can say, I grant my agent the authority to sell my house. That is a limited power of attorney. The authority that is granted is only the ability to sell the house. The agent does not have the ability to transact business, for the principal, does not have the ability to deal with bank accounts for the principal, and so on.

Another type of limited power of attorney is limited as to time. And so, for example, a principal can grant an agent a power of attorney that says, I the principal grant my agent authority to conduct business for me, but only for the next 30 days. That is a limited power of attorney as well.

Another type of power of attorney is a general power of attorney. The general power of attorney can be quite broad, and this is where the principal grants the agent broad authority to transact business on the principal’s behalf. Typically, the general power of attorney is also not time bound. And so, for example, in be for a unlimited period of time whenever the power of attorney becomes effective.

And so those are the ways that a power of attorney can be defined, or those are the different types of powers of attorney. If you have more questions about powers of attorney, please feel free to reach out and contact us.

Quick Question Corner is a video segment where we answer common questions about estate planning and elder law. If you have similar questions, leave them in the comment section and we can feature them in one of our videos in the future.
3 Common Estate Planning Misconceptions

3 Common Estate Planning Misconceptions

1. It is Only for the Rich

Often, when we see headlines about estate planning, they’re typically focused on high-profile individuals – wealthy entrepreneurs or celebrities who’ve either neglected to create an estate plan, made a mistake in their plan, or have caused a family feud over their estate.

This generates the perception that estate planning is only for the rich, who can afford to hire professionals to manage their substantial assets. Many ordinary people might consequently dismiss the idea of creating an estate plan, assuming their assets are too insignificant to warrant one. However, this assumption couldn’t be more incorrect.

Estate planning isn’t merely about wealth distribution. It’s a comprehensive process that not only determines the allocation of your assets after your demise but also addresses potential scenarios where you might be incapable of making decisions for yourself. This latter situation is, in fact, more likely to occur than not.

Without an estate plan, if you become incapacitated, the court will have to designate someone to make crucial medical and financial decisions on your behalf. This procedure can be lengthy, costly, and public, potentially causing conflict within your family if there’s disagreement over who should be appointed and how decisions should be rendered.

Importantly, even if you consider your resources to be modest, it’s worth contemplating who would inherit your hard-earned savings upon your death. Without an estate plan, this decision falls to state law. Often, the state’s assumptions about your wishes may not align with your actual intentions. But without an estate plan formalizing your preferences, the state has no choice but to intervene.

Estate planning is for everyone, regardless of the size of your assets. It’s about ensuring your wishes are honored and your loved ones are protected, no matter what the future holds.

2. My Partner Will Inherit Everything

It’s a common practice for married couples to jointly own property and bank accounts. The principle of joint ownership or tenancy by the entirety stipulates that upon the death of one spouse, the surviving partner automatically becomes the sole owner. This arrangement often suits many couples.

However, it’s important to recognize the potential pitfalls of this approach. While it may seem straightforward for assets to automatically transition to the surviving spouse, this method lacks any form of safeguarding. Imagine a situation where you are sued following a car accident after your spouse has passed away. All the assets that have transitioned to your ownership are now exposed to creditors and can be used to settle any legal claims against you.

Moreover, consider what could happen if your spouse remarries after your death. The assets that were once jointly owned could now be spent without any regard for your original intentions or the interests of your children. This concern is especially relevant today, given the prevalence of blended families.

Estate planning isn’t about excluding your spouse from your assets. It’s an opportunity for both of you to discuss and decide how your shared assets should be handled upon either’s death. This process ensures the financial security of the surviving spouse and allows any remaining assets to be distributed according to both parties’ wishes. Therefore, estate planning provides control over your financial legacy and peace of mind for your family.

3. I Already Have a Will, I Don’t Need an Estate Plan

Even though many people believe that creating a will can help them avoid probate, this isn’t necessarily the case. The will must still go through probate court for the assets to be distributed.

In some jurisdictions, if the estate’s value is below a certain amount, it’s possible to file a petition to distribute the assets without going through the usual probate process. Similarly, in certain states, an affidavit can be used to gather and distribute assets if their total worth falls under a specified limit.

Probate processes can either be supervised or unsupervised. Supervised probate involves a probate judge who oversees every step of the process and approves the actions of the personal representative. On the other hand, unsupervised probate can be an option when there are no disputes, and all involved parties are cooperative. However, certain documents may still need to be filed.

Regardless of being supervised or unsupervised, both types of probate can be time-consuming and might expose personal and financial affairs as public record.

Your peace of mind is our priority

Our dedicated team is on standby to address all your inquiries regarding estate planning and the intricacies of the process. We believe in crafting unique, tailored plans that offer the right protection for you and your loved ones. Don’t hesitate to reach out to us today.

Can an agent under a power of attorney sell a house or other real estate?

Can an agent under a power of attorney sell a house or other real estate?

The answer is, it depends. The authority that’s granted to the agent in a power of attorney is based upon the language that is actually contained within the power of attorney.

So if the power of attorney says that the agent has the authority to buy and sell real estate, and perhaps even specifies the specific real estate location by address or by APN assessor’s parcel number, then the power of attorney can be used to allow the agent to sell real estate.

Quick Question Corner is a video segment where we answer common questions about estate planning and elder law. If you have similar questions, leave them in the comment section and we can feature them in one of our videos in the future.
Practical Steps for Dividing Personal Items

Practical Steps for Dividing Personal Items

Throughout our lives, we accumulate various belongings, some of which hold sentimental value or monetary worth. It’s crucial to ensure these items are allocated according to your wishes after your death. Here’s how you can ensure a smooth distribution process.

How to Distribute Your Belongings

Use a Personal Property Memorandum: If you want a specific item to go to a certain individual, you can create a personal property memorandum. This document should be linked to your will or trust, and it allows you to specify who gets what. You might, for example, leave your gold pocket watch to your nephew, Bill Smith. Make sure the items are clearly described and the recipients are specifically named. Changes to this document must comply with your state’s laws.

Hold an Auction: If your aim is to divide your belongings equally among several beneficiaries, you could use play money to conduct an auction. Each beneficiary gets an equal amount of play money to bid on items. This method ensures everyone has an equal chance, regardless of their real-world wealth.

Take Turns Picking: Gather all your belongings in one place and allow each beneficiary to select an item in turns. To keep things fair, you could have beneficiaries draw numbers to decide the order of selection. This method works best when the items are of similar value, ensuring everyone receives an equal number of items.

Other Important Factors

Provide Clear Guidelines: If you’re leaving the distribution to a trustee or representative, make sure you provide clear guidelines to prevent disagreements among beneficiaries.

Involve Your Loved Ones: If you’re unsure how to distribute your belongings, involve your loved ones in the planning process. You could use stickers or sticky notes to mark desired items, resolving any conflicts while you’re still alive. Don’t forget about younger family members who might appreciate something of yours after you’ve passed.

Consider keeping collection together: When distributing a collection, consider whether you want the collection to be divided among multiple people or given entirely to one person. Some collections may be more valuable if all of the pieces are owned by the same person, especially if the collection is complete.

It’s important to make these decisions while you’re still alive. Without clear instructions, your loved ones might face disputes and possible legal battles. We’re here to help you establish a clear strategy and document it properly. We offer both in-person and virtual meetings for your convenience.

Can you transfer a one-half interest in a house into a trust?

Can you transfer a one-half interest in a house into a trust?

And the answer is yes, you can transfer a one-half interest in a house into a trust. People often own real estate with other individuals and usually that is a tenancy in common type of ownership.

And what that means is that each of the co-owners owns an undivided one half interest in the real estate. So it’s possible for one of those owners to transfer his or her undivided one half interest in the real estate to a trust that they create.

Quick Question Corner is a video segment where we answer common questions about estate planning and elder law. If you have similar questions, leave them in the comment section and we can feature them in one of our videos in the future.
Can you be the beneficiary of your own trust?

Can you be the beneficiary of your own trust?

And the answer is yes, you can be the beneficiary of a trust that you create. Most people will create what’s called a revocable living trust. That is a trust that they create during their lifetime and that they continue to have the ability to change at any point in the future so long as they are not incapacitated and have the ability to do so.

Now, when someone creates a trust, they actually wear three hats. The first hat is the role of the creator. They create the trust. The technical name for this is grantor. They are the grantor of the trust, meaning the person who creates the trust.

The next role that most people have is they are the trustee. The trustee is the manager of the assets that are owned by the trust. So an individual who creates the trust is usually also the trustee of the trust.

And then third, and finally, if you create a trust, you are also the beneficiary. That means that during your lifetime you will have the benefit of the assets that are owned by the trust.

Quick Question Corner is a video segment where we answer common questions about estate planning and elder law. If you have similar questions, leave them in the comment section and we can feature them in one of our videos in the future.
Who actually owns a property when it is in a living trust?

Who actually owns a property when it is in a living trust?

Frequently, when you create a trust, you will transfer certain of the property to the trust. An example is your house. You’ll sign a grant deed transferring your house from you as an individual to you as trustee of your trust, as the creator of the trust, what’s sometimes called the grantor, you have complete control over the trust to change it, modify it, or dissolve it, or revoke it.

So when you talk about who owns property, there are actually two types of title. There is legal title, and then there is equitable title. Legal title is whose name is on the deed or who has ownership of the property. Equitable title is who receives the benefit of the property.

And so, with a revocable living trust, if you were to transfer your house to the trust, legal title would be owned by the trust, but equitable title would continue to be owned by you as an individual.

And again, remember, with a revocable living trust, you always retain the ability to modify the trust if you change your mind in the future.

Quick Question Corner is a video segment where we answer common questions about estate planning and elder law. If you have similar questions, leave them in the comment section and we can feature them in one of our videos in the future.
Do you need an attorney to set up a trust?

Do you need an attorney to set up a trust?

One of the questions that I get is whether you need an attorney to set up a trust, and the answer is yes. I recommend that you hire an attorney to help you set up a Revocable Living Trust.

The reason for this is a trust is a complex document. And as a complex document, there are a lot of things that go into it and a lot of things to consider. If you’re not fully versed within the world of the probate law and within the tax code, you would want to rely on a trained and trusted professional to help you set up your estate plan with a Revocable Living Trust as the foundation.

Quick Question Corner is a video segment where we answer common questions about estate planning and elder law. If you have similar questions, leave them in the comment section and we can feature them in one of our videos in the future.
Why an Inheritance Calls for Estate Plan Adjustments

Why an Inheritance Calls for Estate Plan Adjustments

Inheriting wealth is a major event that, if not managed correctly, can lead to financial missteps and potential loss. Individuals who receive an inheritance often face challenges in managing their newfound wealth due to a lack of experience, existing debt issues, or tax complications.

However, proactive estate planning can help mitigate these problems, ensuring that the inherited wealth is used wisely and effectively.

The Impact of Inheritance on Estate Plans

An inheritance can significantly alter your financial landscape, necessitating a review and possible adjustment of your tax and financial strategies. It may also increase your risk of legal claims as people tend to target those with perceived wealth. If this is your first experience with substantial assets or investments, an estate plan can establish measures to manage and safeguard your wealth.

If you already have an estate plan, it’s crucial to revise it to include your recent inheritance. More assets may require a change to ensure your wishes are correctly implemented. This is especially true if your family structure is complex, if your assets now exceed $11 million, making your estate taxable, or if your initial estate plans involved a philanthropic approach. By carefully planning how to use your inheritance – whether for immediate or long-term financial goals – you can prevent the squandering of your newfound wealth.

Safeguarding Your Family’s Wealth

Receiving an inheritance also presents an opportunity to conserve your family’s wealth for future generations. Unfortunately, studies show that 70 percent of affluent families lose their wealth by the second generation, and 90 percent by the third generation.

A key reason behind these startling statistics is poor intergenerational communication about money matters. Hence, it is vital to take active steps to ensure long-term wealth preservation. Discussions about money are often avoided due to fears of creating a sense of entitlement among younger generations, concerns about privacy, or because talking about finances is considered taboo. But with open and honest dialogue, and careful planning, your family can avoid the common pitfall of wealth dissipation within a few generations.

Estate planning can lay the groundwork to ensure assets are managed effectively and preserved, rather than wasted. It can also help transform wealth into a positive legacy rather than a source of problems or societal issues.

Consulting Experts

Inheritances can deplete more rapidly than expected without proper planning. If you’ve recently inherited wealth or anticipate doing so soon, it’s essential to seek financial and legal advice.

Don’t hesitate to reach out to us for an appointment to discuss how we can assist in preserving your family’s legacy.

Is an inheritance considered community property or marital property in California?

Is an inheritance considered community property or marital property in California?

The answer to this question is no. An inheritance is not community property or marital property in California.

California is a community property state, which means that all property received during the marriage is community property unless it is received by gift or inheritance. And so if you inherit money from a family member and you inherit that money in your name alone, that money is your separate property.

Quick Question Corner is a video segment where we answer common questions about estate planning and elder law. If you have similar questions, leave them in the comment section and we can feature them in one of our videos in the future.

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