When someone is unable to make important decisions for themselves (often due to age or health issues), it can be helpful to pursue certain legal processes to enable a trusted individual to make these decisions on their behalf. Both guardianship and power of attorney provide important decision-making support, but they do have some distinctions, discussed below, that might make one a better choice than the other in certain situations. 

What is Guardianship?

Guardianship is a legal process by which a court appoints either an individual or an organization to make certain decisions on behalf of someone who is incapable of managing their own affairs. Before issuing an order for guardianship, the court will investigate whether the person is incapacitated or not (except in cases where the guardianship is of a minor).

Because guardianship is established through a court order, the guardian is generally required to provide periodic updates to the court on the well-being of the individual under guardianship, which provides ongoing oversight of the relationship.  Usually, the guardian is responsible for decisions regarding health care, finances, and day-to-day living arrangements.

The person under guardianship necessarily has limited autonomy and may lose some or all of their legal decision making rights.

What is Power of Attorney?

Like guardianship, a power of attorney is a legal process where one person acts on behalf of another, especially in making important decisions. Unlike guardianship, however, the individual (the principal) voluntarily designates the power of attorney to someone else (the agent or attorney-in-fact), and the process does not require court involvement. 

Because the principal is choosing to grant authority to their agent, the power of attorney option provides much more flexibility and control. For instance, the principal can specify the areas in which they want the agent to act (e.g., health care power of attorney; financial power of attorney, etc.), can grant broad or limited powers, and can set specific amounts of time, such as during temporary incapacity or absence due to extended travel or illness.

Although the principal can revoke or alter the power of attorney at any time while they are competent, a durable power of attorney remains in effect even if the principal becomes incapacitated.

Which Option Is Best for You?

If you wish to have a plan in place to delegate decision-making to someone you trust in the event you become incapacitated in the future, establishing a power of attorney is an excellent option. This legal option provides you with a great deal of control, allowing you to manage your finances, healthcare, living arrangements, and other important decisions without court intervention or oversight.

If someone becomes incapacitated, and there is no power of attorney in place, the court will intervene to establish an appropriate guardianship to manage their affairs. Parents of minor children or of children with special needs should make provisions for guardianship in their estate planning to ensure their children are cared for if the parent is unable to.

Start Planning for the Future Now

Having a plan in place before you need one is the best way to ensure your choices about your finances, healthcare, children, and more are honored. Schedule your free consultation with Lonich Patton Ehrlich Policastri to go over your options, whether you are considering setting up a guardianship or power of attorney. We have years of experience helping our clients secure their futures and protect their families through estate planning and family law.

Disclaimer: this article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter. 

Money can be a touchy issue, especially among close family members. According to an Ameriprise study, when siblings argue about finances, it’s usually about how an inheritance gets divided up and whether parents are being fair to each child when it comes to financial support. Fair distribution of assets in estate planning can be complicated, but that doesn’t mean it’s impossible. The following are a few tips and strategies to help you navigate this process with your family.

Maintain Open Lines of Communication

While many people are uncomfortable talking about money, avoiding the discussion will only make things more difficult in the long run. Encourage family discussions about inheritance preferences (especially about sentimental objects like family heirlooms, jewelry, etc.) while everyone is still alive.

It’s best to set specific times for these discussions. Don’t try to have a serious conversation about estate plans at a holiday gathering. Even though everyone is together, the focus of holidays and special events should be about fun and togetherness.

Open lines of communication will hopefully promote transparency and help address potential grievances before they become a problem.

Decide Between Equal or Equitable Distribution

In many cases, equal distribution among siblings makes sense. However, it’s important to consider the individual circumstances of each child. If one sibling has been more involved in caregiving, for instance, it might be more fair to increase their share of the inheritance. Or, if one child is struggling financially, has special needs, or will require more financial help in the future, you might choose equitable distribution of your assets, rather than equal distribution. Clearly communicating this distinction to your children is important and might help protect against conflicts and hurt feelings.

Involve a Neutral Third Party

Many families find it helpful to hire a mediator or estate planning expert to facilitate difficult and sensitive discussions and establish a plan that is in everyone’s best interests. Siblings might be more willing to be honest with a neutral third party and feel more comfortable with this type of formal discussion and setting.

Consider Using Trusts as Tools

Setting up trusts or college funds is another way that you can thoughtfully provide for your children while also controlling the distribution of funds, protecting the assets from potential disputes, and minimizing conflict. 

Other Considerations to Avoid Conflict

Other things to think about when estate planning that might smooth out the process and head off sibling rivalry before it begins:

• Document everything – clearly outlining your wishes in your estate plan, including your rationale for how you’ve distributed assets, can reduce misunderstandings.
• Update regularly – be sure to review and update your estate plan as necessary to reflect current realities, especially if one child has a significant life change.
• Encourage good relationships  – promote positive interactions and relationships among siblings. Family activities, shared vacations, and even therapy might minimize sibling rivalry.
• Prepare for conflict – acknowledge that disagreements may still arise and have a plan for how to handle disputes, including mediation.

Our Estate Planning Group Has Been Helping Families Like Yours Since 1994

When it comes to protecting your family’s future, the estate planning attorneys at Lonich Patton Ehrlich Policastri can help you have the difficult but important conversations you need to have and go over all your estate plan options so you can make informed decisions. Call us today to set up a free consultation.

Disclaimer: this article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter. 

The Greek philosopher Heraclitus is credited with the quote, “The only constant in life is change.” We experience new things every day. While some are small and seemingly insignificant, others completely redefine our lives.

At some point, you may have created an estate plan. After it was complete, you likely put it in a safe place, and that is where it’s remained. 

However, you need to ask yourself: Is your estate plan still relevant in the face of your current circumstances? 

Have You Experienced Significant Life Changes?

Life is made up of milestones, and your estate plan should evolve to reflect those changes. Here are some events that should trigger a review:

1. Marriage or Divorce

The beginning or ending of a marriage can impact your estate plan. As a newlywed, you will want to add your spouse as a beneficiary on any life insurance policies and investment accounts. You will also need to review your will to ensure they are included or name them as power of attorney.

If you and your spouse divorce, you will want to remove them from your will and as a beneficiary. You should take their name off of any legal documents that allow them to make any decisions on your behalf if you become incapacitated.

2. The Addition of a New Family Member

Welcoming a new child into the family is a time for joy and celebration. You will want to ensure your little one is provided for if anything should happen to you. Therefore, your estate plan needs to be updated with the appointment of a guardian and the setting up of a trust to take care of their financial needs.

3. Death

If someone listed in your will as a beneficiary or executor passes away, you must update your estate plan.

4. Financial Changes

Suppose your assets significantly increase or decrease, such as receiving an inheritance, buying or selling a business, or winning the lottery. In that case, those changes need to be reflected in your estate plan. 

External Events That Impact Your Estate Plan

Even if your life remains the same, there are outside factors that may require you to update your estate plan, such as:

• Changes in tax laws
• Economic conditions
• Legal reforms
• Politics

The Consequences of an Outdated Estate Plan

If you’ve never updated your estate plan, your assets may be distributed to outdated beneficiaries, such as an ex-spouse. Loved ones that you intended to add to your policies may find themselves involved in family disputes and legal battles.

Furthermore, by failing to update your estate plan, you may have missed opportunities to take advantage of new laws or strategies that would have left more money to your heirs.

Set up Regular Reviews with LPEP Law

Unless you experience a significant life event that requires immediate changes to your estate plan, you should review it every three to five years. This ensures that your legal documents are a reflection of your current life circumstances and goals. Our attorneys at Lonich Patton Ehrlich Policastri can work with you to review the following:

• Beneficiary designations
• Guardianship
• Power of attorney and healthcare proxy
• Trusts

We will also discuss any new regulations or tax laws that may have an impact on your estate. You will have peace of mind knowing that your loved ones will be protected and provided for according to your wishes.

Contact us for a free consultation by calling (408) 553-0801.

Disclaimer: this article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter. 

Estate planning is an essential strategy for protecting your assets and ensuring that your wealth is passed on to your loved ones. One of the significant concerns for many people is how to protect their assets from potential creditors. By creating a robust estate plan, you can safeguard your hard-earned property, savings, and investments from being seized to satisfy debts. Here’s what you need to know.

Why Protecting Your Assets from Creditors is Important

Creditors can pose a serious threat to your financial well-being, particularly if you face lawsuits, medical debt, or business liabilities. Without proper protection, your assets could be vulnerable to claims, jeopardizing your financial future and your family’s inheritance. Estate planning offers legal ways to shield your assets from such risks, allowing you to maintain control over your wealth.

Effective Estate Planning Strategies for Asset Protection

Let’s take a look at some of the estate planning strategies you can put in place to protect your assets from creditors. 

Create an Irrevocable Trust for Asset Protection from Creditors

One of the most effective ways to protect your assets from creditors is through an irrevocable trust. Unlike a revocable trust, where you maintain control over the assets, an irrevocable trust requires you to give up control of the property placed within it. Since the assets no longer legally belong to you, creditors cannot reach them. Irrevocable trusts are particularly useful in shielding high-value assets, such as real estate or substantial investments.

Establish a Family Limited Partnership (FLP)

A Family Limited Partnership (FLP) is another tool for protecting assets from creditors. In an FLP, family members own shares of the business, and these shares can be difficult for creditors to seize. While you may still control the partnership as a general partner, creditors can only access your personal interest, not the assets of the FLP itself. This type of arrangement is often used for family-owned businesses or investment portfolios.

Utilize Homestead Exemptions as a Strategy for Asset Protection

In the state of California, homeowners can take advantage of a legal provision known as the homestead exemption. This law provides protection for a certain amount of equity in one’s primary dwelling against claims from creditors. As of 2024, the protected equity value varies between $300,000 and $600,000, with the specific amount determined by the median home prices within the homeowner’s county of residence. Although this exemption doesn’t shield the entire value of a property, it does safeguard a considerable portion. This protection makes it substantially more challenging for creditors to compel the sale of a homeowner’s primary residence to satisfy debts.

Work with an Estate Planning Attorney at LPEP 

The laws governing asset protection and estate planning can be complex, particularly in California. It’s essential to work with an experienced estate planning attorney who understands the legal nuances and can help you implement the best strategies for your specific situation. 

Here at Lonich Patton Ehrlich Policastri, our experienced estate planning attorneys can help you with properly crafted trusts, partnerships, and legal documents to ensure your assets are protected and your legacy is preserved.

Protect your future and your family by taking the necessary steps today to shield your assets from creditors—contact LPEP today for a free consultation. 

Disclaimer: This article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.

We spend our lives building a strong financial foundation for ourselves and our loved ones. After a lifetime of accumulating assets, it’s inevitable that you want to ensure that your assets are allocated according to your wishes. Estate planning provides valuable tools to assist you in managing and disposing of your estate during your life and after death.

Why Estate Planning is Important

An estate plan is a set of legal documents that outlines how you want your financial affairs handled in the event of your death or incapacitation. It also allows you to specify your medical treatment preferences and name individuals to make financial and healthcare decisions on your behalf if you cannot.

A comprehensive estate plan can minimize legal complications and potential conflicts among beneficiaries. It can also help reduce taxes, avoid probate, and protect your estate from creditors.

A Will is the Foundation of Your Estate Plan

More than half of the adults in the United States don’t have estate planning documents or even a will. If you were to die in California without a valid will, the state’s intestate laws would determine how your estate is dispersed, and it’s likely not the way you would choose.

A will outlines how you want your assets to be distributed after your death. It provides clear instructions and names beneficiaries for specific assets, reducing the likelihood of disputes among heirs.

A properly drafted will is legally binding and will ensure your wishes are honored. Furthermore, it allows you to update it as your circumstances change, such as the birth of a child or the acquisition of new assets, such as an inheritance or selling a business.

However, using a will as your sole estate planning tool does have its drawbacks. A will needs to be validated, and your estate must go through probate. This process can be expensive and time-consuming, potentially delaying the distribution of assets.

In addition, once probated, a will becomes a public document, which may not be ideal if you are someone who values your privacy.

The Versatility of Trusts

A trust is a legal mechanism in which you assign ownership of your assets to a trustee, who then oversees and manages them for the benefit of your designated beneficiaries. Trusts can be customized to address a wide range of estate planning objectives. There are two primary ways to establish a trust:

#1. During your lifetime (living trusts)

#2. Upon your death (testamentary trusts)

Creating a trust requires drafting an agreement that specifies the terms and conditions for managing and distributing your assets. You then transfer your assets into the trust, which is managed by the trustee according to your instructions. The trustee is responsible for making the distributions to beneficiaries and ensuring compliance with the terms of the trust.

Trusts have multiple benefits, such as:

• Assets placed in a trust avoid the probate process, enabling a faster and more confidential distribution.
• You can customize your trust to address specific needs, such as providing for a special needs child or managing assets for minor beneficiaries until they reach a certain age.
• There may be tax advantages as a living trust can potentially reduce estate, gift, and income taxes.

Trusts do have drawbacks, though. Setting one up and maintaining it can be more complicated and expensive than creating a will. They also require ongoing management and oversight.

LPEP Law Can Offer Practical Advice

Legal advice is crucial for drafting wills and trusts that comply with California’s laws and effectively communicate your wishes. At Lonich Patton Ehrlich Policastri, our attorneys can assist you with creating an estate plan that ensures your assets are distributed according to your wishes. We will review your goals and help you understand the benefits and drawbacks of various estate planning tools. 

Contact us for a free consultation by calling 408-553-0801. Together, we can create a customized estate plan that will provide peace of mind for you and your loved ones.

Disclaimer: this article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.