Forward Thinking Estate Planning

Estate Planning requires sufficient consideration of what is going on both presently in the life of the client and their family and what is likely to occur down the road. Such a discussion is both broad and in depth and takes the attorney and the client into topics that the client may not have considered. Let us discuss some important considerations.

How does the client want to address the issue of getting old and not being able to fully take care of herself or himself? Does the client want to remain at home for as long as possible? Does the client want to move in with family or into an assisted living facility? Does the client want a child to become co-trustee so that the parent remains involved but can lean on the child for support? Will assets need to be gifted or spent down to qualify the client for Medi-Cal to pay for a skilled nursing home? These issues are important to how the client’s trust, power of attorney and advanced health care directive are drafted to include the necessary directives and authority to implement the client’s specific directives.

How does the client want any dependent family members cared for if the client becomes disabled or dies? That is, is there a dependent child or spouse who receives support, or may need support, whom the client wants supported? If so, the client’s trust and power of attorney can specifically provide the terms and conditions on which such support is provided in an appropriate manner. Otherwise, the client’s successor trustee or agent under a power of attorney has no authority to assist anyone other than the client because such other persons are not included as current beneficiaries, except perhaps as future beneficiaries at the client’s death.

For example, the client’s adult child may be receiving ongoing support for the essentials of living (e.g. a place to live and car insurance) because they attend college or became divorced and moved home. If so, the parent’s trust may say that the successor trustee shall continue the support arrangement even if the parent is incapacitated. Moreover, the parent’s trust may specify that the dependent child will receive their inheritance in further trust managed for the child’s benefit, which may include the right to live in a residence. Such further trust may be a support trust or a special needs trust that allows the trustee full discretion over distributions to or for the benefit of the beneficiary.

How does the client want any special assets administered? Does the client have a business, valuable assets (e.g., art or collectibles), or sentimental assets (e.g., heirlooms) that require special management? If so, does the client want a certain person or type of person to manage these assets who is not already nominated as their successor trustee for purposes of managing the other assets.

For example, consider an artist who has a lifetime collection of special artwork and professional art books that are valuable but require the expertise of a knowledgeable art advisor. The client might nominate a trusted art advisor to be the special trustee with full charge of such assets or nominate the advisor to act as a trust director who can tell the trustee how to market the artwork so as to fetch the highest price. An art advisor as trust director would have specific, limited involvement and responsibility for the art collection than the trustee.

In sum, comprehensive and forward thinking estate planning is needed for good outcomes. Such estate planning benefits from the depth of estate planning attorney attorney’s own professional experience and the willingness of the client to fully engage in the process. The foregoing is not legal advice.

The foregoing discussion is not legal advice. Consult an attorney for guidance. Dennis A. Fordham, Attorney, is a State Bar-Certified Specialist in estate planning, probate and trust law. His office is at 870 S. Main St., Lakeport, Calif. He can be reached at Dennis@DennisFordhamLaw.com and 707-263-3235.