California Estate Planning: An Overview

What You Need to Know About California Estate Planning

No matter where someone lives, it is important to have several basic estate planning documents in place, but with California’s high real estate values, this is an especially good idea for California residents. Here’s everything you need to know about California estate planning.

There are many available tools to help with estate planning in California. Legal estate planning resources such as wills, living trusts, advanced health care directives, and more can be beneficial in securing a family’s future in California after a loved one is gone.

Wills in California

In the event of an individual’s death, a will (also known as a Last Will and Testament) can ensure that someone’s assets are distributed to their family and friends according to their wishes. In a will, an individual may name their beneficiaries, who is to be the guardian of any living children should both parents pass away, and who will execute the will.

A person’s will governs the distribution of monetary and property assets to their named beneficiaries. Note that a will cannot govern the distribution of assets that are already promised to beneficiaries in:

A life insurance policy
A living trust
A retirement plan
Securities or brokerage accounts with “transfer/pay on death” clauses
Joint ownership or community property agreements between spouses or domestic partners with survivorship clauses

Without a will, the state of California will determine the distribution of any unassigned assets upon death. The state will distribute these assets according to the following beneficiary hierarchy depending on who’s available to receive the assets:

A spouse or registered domestic partner
Children or grandchildren
Living relatives, including parents and siblings
In the state of California, if there are no living relatives, spouses, or domestic partners

Steps to Create a Will in California

Here is a quick checklist for making a will in California:

Decide what property to include in the will.
Decide who will inherit the property.
Choose an executor to handle the estate.
Choose a guardian for any children.
Choose someone to manage children’s property.
Make the will (preferably with the help of an attorney).
Sign the will in front of witnesses.
Store the will safely.
Living Trusts in California

A living trust (also called an “Inter Vivos” trust) is similar to a will in that it will distribute assets to beneficiaries upon a person’s death. However, a living will also be used to manage assets while someone is still alive. Assets like stocks, bank accounts, and real estate can be placed into a living trust, and a person can then assign a trustee to manage the assets according to their wishes.

One of the major differences between a living trust and a will is that a living trust is established and regulated without court supervision. It is typically safer to govern the distribution of assets after death using a will, in which case the executor of the will is under court supervision.

California Power of Attorney

When someone assigns another person durable power of attorney, it means another person may act on their behalf should their physical or mental health deteriorate.

Someone may assign durable power of attorney to anyone they trust to make decisions on their behalfs, such as family members, a lawyer, or an accountant. The individual must specify whether the power granted to the agent is for general or specific situations and the extent of their power. Upon the person’s death, the agent’s power of attorney expires.

It is possible to make several different types of power of attorneys (POAs) in California. In particular, many estate plans include two POAs that are effective even if you become incapacitated:

A financial POA, allows someone to handle another’s financial or business matters
A medical or health care POA, allows someone to make medical decisions on another’s behalf

Basic Steps for Making a Financial Power of Attorney in California

Here is a basic checklist for making establishing financial power of attorney in California:
Create the POA using a Statutory Form, software, or attorney

Sign the POA in the presence of a notary public or two witnesses
Store the original POA in a safe place
Give a copy to the agent
File a copy with the land records office
Consider giving a copy to financial institutions

FAQs About Estate Planning in California

What happens if someone does not have a will?

Should someone die without a will, state “intestacy” laws will dictate how their property will be distributed. California’s intestacy law gives the property to the closest relatives, beginning with spouses and children, then grandchildren or parents, then continues to increasingly distant relatives. If the court exhausts this list to find there are no living relatives, the state will take the property.

Can someone revoke or change a will?

In California, a will may be revoked or changed at any time. If a spouse’s divorce or marriage is annulled, any gift one gave their spouse in the will and any provision that named the spouse as an executor or trustee is automatically revoked unless the will expressly says otherwise (Cal. Prob. Code § 6122). If someone needs to make changes to their will, it is best to revoke it and make a new one.

Who can be named an agent (Attorney-in-Fact) in California?

Legally, any competent adult can serve as an agent. But it is important to take into account certain practical considerations, such as the person’s trustworthiness and geographical location. California allows for the appointment of co-agents who are authorized to act at the same time, but it is advisable to have just one agent to minimize potential conflicts. However, naming a “successor” agent—an alternate who will become the agent if the first choice is unavailable for any reason—is always a good idea.

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