The Covid-19 pandemic is a scary reality which has had a global impact on all of our lives. Unfortunately, those over the age of 65 are more susceptible to the complications associated with this virus. While we may not be able to completely control how we respond to the coronavirus, we can prepare our finances and estate in case the worst happens.
This article discusses the different ways we can do this.
Create a Living Trust
Under California law, if you die with at least $166,250 in gross assets and you do not have a living trust, your beneficiaries would have to open up a probate case in order to gain title to the assets you passed to them. The term “gross asset” refers to the value of the property regardless of how much debt is owed on it. Since commencing a probate can be a slow and expensive process, it is best to avoid it as much as possible.
One way for you to save your beneficiaries from having to open up a probate case is to create a living trust. You can name you and/or your spouse as the initial trustee of the trust while you are alive. The trustee is the person who manages the trust. This means you retain control of all your assets the same way as if you never had a trust. For a revocable trust, you have the option of revoking the entire trust at any time during your lifetime.
Power of Attorney
Creating a power of attorney allows you to designate someone other than yourself with power of managing your financial affairs on your behalf. You can limit this power and define the scope of the power you are giving the individual you are naming.
Durable Power of Attorney for Healthcare
A Durable Power of Attorney for Healthcare allows you to designate someone to have the power to make healthcare decisions on your behalf in the event that you are no longer capable of making decisions yourself due to health conditions. You can define the scope of the individual’s authority and even revoke it altogether if you later change your mind.
Last Will and Testament
A last will and testament allows you to designate how your assets will be distributed upon your death. If you don’t have a will, you will pass away intestate and the probate court will follow the California intestate succession laws which are in the probate code.