Estate Planning Infographics Snapshot

Estate Planning During the Pandemic

Numbers have shown that more than half of the people living in the United States do not have estate planning documents in place. It seems during this Covid-19 pandemic, that many people who have procrastinated for years suddenly feel an urgent need to complete their estate plan.  At a minimum, everyone over the age of eighteen needs three things: a will, a financial power of attorney and an advance health care directive.  Parents with small children, should have guardianship provisions in their will or trust. Homeowners in California should have a living trust to keep loved ones out of probate court.

What if you procrastinated and you are in the hospital with no estate planning in place?  If you have capacity, you can sign documents in the hospital.  An estate planning attorney can talk to you over the phone, or via video chat, to determine your needs.  Your attorney can draft the legal documents that make your wishes known.  If mobile notaries and witnesses are allowed in the facility your documents can easily be finalized.

If it is not possible to execute estate planning documents using the standard practice of signing a will before two independent witnesses and notarizing all the other documents. It may be possible to sign an affidavit asking that the wishes expressed within the documents be honored by all individuals and courts as though they were signed in the presence of a notary and witnesses. The result is that the documents should be valid even though they are not executed under ideal circumstances. These documents should be signed under more formal circumstances when the Covid-19 Pandemic is at an end.

Estate Planning during the Pandemic

Adult Children Should Have These Documents in Place

Back to school season has arrived and if you have children, or grandchildren, over the age of eighteen (in school, living with you, or on their own) that do not have much financially, you should encourage them to have at least the following documents in place:

General Durable Power of Attorney for Finances. This document authorizes your “attorney in fact” to handle your bank and financial accounts if you lack capacity, are unavailable, or unable to do so for yourself.

Advance Health Care Directive. An Advance Health Care Directive authorizes an agent to speak to a doctor for you if you cannot. If an accident or disease renders your loved one unable to speak for themselves, this is invaluable. Beware: The free advance directives provided by hospitals work fine for medical providers, but they are not usually legally adequate.

Medical Privacy Authorization. The Health Insurance Portability and Accountability Act makes it hard for anyone to obtain medical records of a patient. If someone in the family cannot obtain medical records to provide to a medical insurance carrier, the carrier will not pay the bills and the medical provider will turn the patient over to collections.

If none of these pre-arrangements have been made for incapacity, the court will grant a conservatorship of the person or the estate. This process is expensive and intrusive because the conservator must seek ongoing court approval.


***In California, if children have homes and larger assets, they need the above documents, a living trust and pour-over wills.


Is it Time to Review your Estate Plan?

It is a good idea to review your estate documents every five years, or when your financial or family situation changes.


If you remarry after you prepare your will or trust, your new spouse may be able to claim they were forgotten and bring a probate court action, even if they were provided for outside of your will or trust.

If you get a divorce, you should have your estate planning documents updated to make sure they have the right people in charge and the correct beneficiaries.  Be sure to also verify the beneficiaries of your IRA’s, annuities and life insurance policies.

Everyone should look over their trust periodically to make sure all schedule A assets are in the trust.  If you refinanced your home after your trust was prepared, make sure the home is in the trust.

Ask Annette

Ask Annette: Living Trusts

Occasionally we receive common questions from clients. This month we wanted to share a few questions we receive about living trusts.

If you have a question about a living trust, probate, wills, or estate planning in general contact Annette Dawson-Davis at [email protected]

What are some advantages of having a living trust?

A properly funded living trust keeps your beneficiaries out of probate court, thus saving your beneficiaries thousands of dollars.  A living trust allows your successor trustee to easily manage your assets for you if you lack capacity and cannot manage your assets.  A living trust also allows your trustee to manage funds for your beneficiaries who are not good with money.

What are some of the common mistakes people make when they have made a living trust?

The biggest problem is that some people never get around to putting their accounts or homes into their living trust.  If the accounts do not have a “pay on death” or “transfer on death” beneficiary, a probate may be necessary if the accounts have a cumulative value of more than $150,000.  If a home is not in the trust it will need to be probated unless there is proof they intended the home to be in the trust.  Lenders will sometime make people take their home out of their living trust to refinance, and then the borrowers forget to deed the home back into the trust.


4 Estate Planning Tips for Gen X’ers and Millennials

4 Estate Planning Tips for Gen X'ers and Millenials

Estate Planning is not just for the wealthy and it is not just about when you die.  Life is unpredictable.  We have all lost young friends or loved ones. Everyone, over the age of eighteen, should designate someone to manage their assets and make health care decisions for them in case they cannot speak for themselves.  If no arrangements are made for your incapacity, someone must get legal authority from the court in the form of a conservatorship.  It is intrusive and expensive because ongoing court approval is required.  It is much easier and less expensive to obtain a few legal documents that will allow people to help you when you need help.

  1. Older people are not the only ones who get sick and or die.  An Advance Health Care Directive gives someone the authority to talk to a doctor for you and give the doctor instructions about your health care if you are not able to do so for yourself.  Does someone know your wishes and have the authority to express them to a doctor?  Someone also needs the authority to make final arrangements for you.
  2. Anyone who has ever been laid up and unable to deal with financial institutions knows they need a General Durable Power of Attorney for Finances. It allows your agent to manage your financial accounts, buy or sell real estate, sign rental agreements and deal with utility companies.  This document is only valid while you are alive.
  3. HIPAA Release.  Allows your Agent to access your medical records. Your health insurance company may not pay your medical bills if they cannot see your medical records.  If no one is authorized to obtain your medical records, the insurance company will not pay your medical bills and the doctor or hospital can turn your bills over to a collection agency.
  4. A Will leaves directions for who should care for a minor child or how assets should be distributed when you die.  Even if you do not have many assets, it is necessary because it allows someone to collect a small amount of assets in a bank account, cancel a lease, or sell an automobile.
Lottery Winnings_Now what_

What to do When you Win the Lottery

You have just won the lottery, congratulations! Now what?

I would advise all lottery winners to see an estate planning attorney to draw up a trust, a pour-over will, a general durable power of attorney for finance and an Advance Health Care Directive that includes HIPAA provisions.  It is important someone can manage your money for you, if you cannot.

The type of trust you set up depends on any inheritance tax consequences that might arise for your beneficiaries.  There are dynasty trusts that may be set up to provide for your children’s children’s, children.  Depending on the amount of the winning a simple probate savings trust may be all that is needed.

A consultation with a financial adviser would be a wise move, to ensure the income would support you for life.


Below is an article from which shares some tips on what to do if you were to win the lottery.

What To Do If You Win The Lottery

By Zack Friedman, published on

If you win the next Powerball drawing, you could walk away with $650 million.

It’s easy to imagine how you might spend all that money.

Before you start spending your impending fortune, however, it’s important to ask yourself one question.

What do you actually do if you win the lottery?

Here’s what you need to know and how to execute your lottery financial game plan:

1. Sign the back of your lottery ticket

It sounds so simple, but it is the easiest step to take for granted. Despite the advent of technology, you still need to sign the back of a winning lottery ticket.
Why? Like a check, a lottery ticket is considered a bearer instrument. Whoever signs the winning lottery ticket and presents a valid photo ID can claim the lottery prize.So, sign your ticket right after you purchase it so you protect yourself in case you lose your winning ticket.


2. Choose a one-time, lump-sum payment or installment payments

You have 60 days from the day you present your winning ticket to determine how you want to receive your prize.

You have two choices when you win the lottery: you can receive a one-time, lump-sum payment or 30 installments over 29 years.

If you choose the lump-sum payment, you will receive your prize winnings upfront, and immediately will owe income tax on the full amount.

If you choose the installment plan in the form of an annuity, each installment payment will be taxed. Which should you choose? It depends in your personal preference.

Financially, a dollar today is worth more than a dollar tomorrow. If you choose the lump-sum payment, you have the peace of mind of receiving all the funds today and can invest the proceeds to earn a financial return.

However, if you prefer to set an allowance for yourself to help control spending, an annuity payment plan can help instill fiscal discipline.

You should compare the after-tax proceeds and your intended investment return (lump-sum payment) with the after-tax annuity payments and intended investment return (installment payments).

Overall, you will want to consider the time value of money — that is, how much you can earn under each scenario comparing the timing of the payments that you receive.

3. Assemble your financial and legal wolfpack

If you win the lottery, you may need help managing your new fortune. It is critical to have a team of trusted advisors to help you manage an array of investment, accounting, tax and legal issues.Expect to be approached by just about every type of advisor who wants to lend a helping hand.

Invest the time to make careful selections about who you want in your inner circle.

Not all advisors are created equally, so you will want to vet personally each new advisor you retain.

Don’t outsource this function. It’s your money, and you need to protect it.

You should interview each prospective candidate, and make sure he or she understands your goals.

Make sure to check their credentials to ensure they are properly licensed.

Advice is not always free so make sure to understand their fee arrangements before you retain them.

Most importantly, hire a team that tells you “no.”

The last thing you want is a team that says “yes” to every time you want to spend money on large purposes.

It’s your call how you spend your money, but it’s helpful to have a team that gives you honest advice even if it’s not what you want to hear.

4. Don’t abandon your budget

Wait, you just won hundreds of million of dollars. Why would you still need a budget?

Financial discipline doesn’t go away when you become a millionaire.

You may have more money, but that doesn’t mean the same principles of personal finance do not apply.

With more financial resources, there may be more things to purchase.

That’s why budgeting is even more essential.

Develop an action plan that accounts for your monthly and annual spending. Categorize your major expenses. Understand your income sources.

One strategy to instill financial discipline is to live off your income, not your prize winnings.

Therefore, you can preserve principal.

5. Take care of your heirs with an estate plan

If you have an existing estate plan, now is the time to update it.

If you have never put one together, now is the time to create one.

When you win the lottery, or have any major life change, it’s essential to ensure that your estate plan reflects your new reality.

With an estate plan, you will want to protect your estate, institute tax planning and consider how to provide for your heirs.

Estate Administration Boot Camp

Everything You Need to Know About Effectively Administering an Estate

Join Annette Dawson-Davis at the Estate Administration Boot Camp on October 10th and 11th held at the Courtyard by Marriott San Luis Obispo in beautiful San Luis Obispo.

Are you fully confident in your knowledge of the latest court and tax rules and the most effective transfer tools to ensure each client’s estate is laid to rest according to the decedent’s wishes, with minimal tax burden? This comprehensive 2-day instruction will give you all the skills you need to administer estates that include trusts and/or business interests without a hitch. Register today!

  • Don’t miss any crucial notice and filing requirements when opening the estate – learn what must be done right away.
  • Get helpful forms and checklists that will help you in administration.
  • Understand how income and estate tax deductions interact and find the most advantageous way to structure the tax returns
  • Learn how to use disclaimers more effectively.
  • Clarify what must be done when the trust becomes irrevocable.
  • Protect your professional reputation with a practical legal ethics guide focused on trusts and estates practice.
  • Prevent mistakes in final petition and ensure each estate is closed quickly and without disputes.


Who Should Attend

This two-day, basic level seminar is designed for:

  • Attorneys
  • Accountants/CPAs
  • Certified Financial Planners
  • Trust Officers/Administrators/Managers
  • Paralegals

Course Content

DAY 1 – October 10, 2017

  • Forms of Administration and When They are Used
  • First Steps and Notices, Executor Duties, Opening the Estate
  • Marshalling the Assets
  • Handling Debts and Claims Against the Estate
  • Spouse Elective Share and Disclaimers
  • Key Intestacy Laws You Must Know
  • Trusts That Affect Estate Administration

DAY 2 – October 11, 2017

  • Income Tax Returns
  • Handling Distributions
  • Legal Ethics in Estate Administration
  • Estate and Trust Contests, Disputes, Challenges
  • Business Interests in Estate Administration
  • Portability and Estate, Gift, GST Taxes
  • Closing the Estate and Final Accounting
Ask Annette

What is a Durable Power of Attorney?

“Annette, what is a Durable Power of Attorney for Property Management?
Do I need one of these?  I am a small business owner a homeowner and not sure if I need this. “

A durable power of attorney for financial management allows an individual to provide for continuing management of their assets in case of future incapacity.  The “durable” means that the power of attorney continues to be effective despite the incapacity of the person who signed the power of attorney.  Very old powers of attorney may not be durable, so they are no help if someone becomes incapacitated, which is when you really need them to be effective.

 There are different ways that the “power” becomes effective; either immediately or on the incapacity of the person who executed the power.  Everyone over the age of 18 needs a power of attorney for financial management and an Advance Health Care Directive.

 Who could handle your affairs if you became incapacitated?  If you do not have papers in place, the court will appoint someone to help you and the court will supervise that help, in the form of a conservatorship.


Stay Out of Probate Court!

One of the greatest gifts you can give the Valentines in your life is to keep them out of probate court.  Probate court can be time consuming, emotionally upsetting and expensive.  Not to mention siblings can be vicious to each other when parents are not around to supervise.   I have an ongoing probate where my client is doing a great job as administrator and her siblings personally sued her anyway.  It is just costing them a fortune in attorney fees.  The case was frivolous.

If you have a trust please make sure your bank accounts, money markets and certificates of deposit are in the trust.  Do not put your IRA’s in the trust, instead name your beneficiaries and name the trust as the very last beneficiary after your spouse and children.

Is your parent’s estate plan up to date?  If you have any questions, please call me at 805.498.0909.

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