Who’s Who in the Estate Planning Package?

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Estate Planning (wills and trusts) attorney Asaph Abrams on appointment of functionaries in the estate plan.

The (Who’s) Who of Estate Planning.

Lettuce Let us commence with your

List of Estate Planning Designees:
(Persons assigned in the estate planning instruments to carry out your directions)

Revocable Living Trust:

Durable General Power of Attorney:

Advance Health Care Directive:

Last Will and Testament:

Intro:

The proverbial “they–” or maybe only your devoted wills and trusts lawyer likens a living trust and signing of estate plan documents to the act of marriage.  It’s a stretch, but bear with your estate planning attorney, please.

I.  Weddings and Estate Planning: sort of analogous

Asaph Abrams on the Estate Plan functionaries
Jacob the Patriarch: somewhat relevant to this estate planning blog.


When women and men wed, they appoint a maid- or matron of honor and a best man, respectively.  Some say a maid of honor dates to circumstances surrounding the nuptials of the patriarch Jacob. [1]  See, his wives-to-be– Leah and Rachel arrived accompanied by their maids (for the purpose of illustration, that’s Jacob wooing Rachel, in the pic to the right).  The best man may date to when knights were sworn by grooms to shield brides from would-be kid-bride-nappers.  Then there’s the tale that groomsmen and bridesmaids–decked in similar dress to the groom and bride–were decoys to thwart evil spirits seeking to jinx the newlyweds.  The Romans gave us that one.   Finally, we posit that the wedding party was simply conceived to ensure the legal act of marriage was witnessed.

Whether you subscribe to stories of patriarchs, knights or evil spirits, the appointment of a wedding party– in particular, its principal players, the best man and maid (or matron) of honor is (loosely) similar in spirit (but not evil spirit) to the appointment of functionaries within the Revocable Living Trust Package (or Living Estate Package), which include the Revocable Living Trust, Durable General Power of Attorney, Advance Health Care Directive and Last Will and Testament. These must be persons you trust: they fulfill critical roles.  They are possibly tasked with tasks of greater import than throwing a tacky bachelorette party lovely shower or booking strippers tasteful venues for bachelor parties.  Then again, people do take weddings very seriously.  Now without further ado, I give you

II. The Estate Planning Party

Being our discussion of Who’s Who in the Estate Plan.  Since we’ve already borrowed from the Good Book, let’s start In the Beginning, with the genesis of the revocable living  trust:

1.  Settlor of the Living Trust

The creator of a trust is the Settlor; she is a proactive person who responsibly retains her faithful wills and trusts attorney to set up a revocable living trust.   The settlor must fund the living trust, i.e. transfer assets to it (e.g. real estate and financial accounts).  The transfer of assets gives substance to the living trust; it does not change ownership or control: the settlor stays in charge. Assets transferred to the living trust are described in attached Exhibits to the trust.

We name spouses as joint settlors of the revocable living trust.

The Settlor is also known as the Trustor.[2]  We’ll opt for Settlor instead of Trustor to avoid confusion with the other Tr- words: the Trust itself and the Trustee, which brings us to the

2. Trustee of the Living Trust

The Trustee, also known as You is the person named to manage the revocable living trust.  Appointment of oneself fulfills the purpose of the living trust: to preserve the settlor’s complete control of the living trust, with right to amend, right to revoke and right to read it at night to hasten one’s slumber.  After all, except for your better-half, who do you trust more than you?

We name spouses as co-trustees of the revocable living trust.

3. Successor-Trustee of the Living Trust

The Successor Trustee is the person named to assume the mantle of the living trust upon death or incapacitation of the settlor and (initial ) trustee of the revocable living trust.   You will appoint a second successor in case the first can’t serve.

The successor trustee is the person who will distribute your (the settlor’s) assets upon death, or preserve assets in the trust for your beneficiaries (e.g. on behalf of minor children), according to terms you specify within the living trust.

4. Beneficiaries of the Living Trust

Beneficiaries of the living trust are the persons chosen by you, the settlor to inherit your property.  In a state of intestacy (dying without a will or trust), inheritance (through sluggish administration absent an estate plan) follows marital ties and bloodlines, which may conflict with your wishes or the comparative needs of survivors.  In the living trust, you designate who will inherit and who will not.  Of course, treat it like the old-school imperative to Rewind (your videotape): Be Kind.

5. Attorney-in-Fact under the Durable General Power of Attorney

If the proverbial bus strikes and you become incapacitated, there is need for seamless handling of financial affairs (like writing checks); when family is distraught, caring for your person, they cannot be hampered by red tape. Advance appointment of an Attorney-in-Fact is in fact, the prudent course of action today. A successor attorney-in-fact is designated in case your go-to guy or gal can’t or won’t follow through.
In the event of extended incapacity (e.g. vegetative state), the Durable General Power of Attorney states preference for a conservator (to exercise broader powers).
If married, each spouse shall have a distinct Durable General Power of Attorney. (They would naturally appoint the other spouse as their first-in-line attorney-in-fact.)


6. Health Care Agent under the Advance Health Care Directive

The Advance Health Care Directive (which is slightly less cumbersome to say than its previous title: the Durable Power of Attorney for Health Care) appoints a Health Care Agent to provide direction to your treating physician or hospital if you cannot communicate your wishes (e.g. with regard to maintaining life support). Whatever the nature of the directives within the Advance Health Directive, this essential estate planning instrument affords control over matters of self-determination and dignity.
While the married sort tend to mesh in many matters and manners [3], separate Advance Health Care Directives are prepared nonetheless; the respective directives would naturally nominate the other spouse as Health Care Agent. An alternate agent is nominated in the event the Agent-spouse is unavailable.

6. Executor under the Last Will and Testament

Your estate plan will include a will (yes it will). If you have a living trust, your will includes a “pour-over” provision to ensure assets omitted from the trust will, ahem, pour over into the trust to be administered per its detailed provisions. If you don’t have a living trust, the will designates your beneficiaries. To carry out (or execute) its provisions, the will nominates an executor. If you have a revocable living trust, the executor may logically be the same person as the successor trustee; too many cooks in the kitchen isn’t good for handling hot pans or estate plans.

While directions may coincide, if you’re married, both spouses will have respective wills.

So there you have it, the functionaries, appointees, nominees, designees or simply put: the members of the estate planning party.  Now, in selection of bridesmaids and groomsmen– the wedding party, newlyweds consider persons who look flattered by frilly outfits, are skillful event-planners, and able to propose composed and sober toasts.  In selection of the estate plan party, we consider attributes of reliability, integrity and shared values.  If they also happen to look good in tuxes, throw a good party and drink in moderation, then that’s helpful too.

III.  The Estate Plan Signing

We touched upon the historic imperative to witness nuptials; it had (perhaps) the primary part in the invention of bridesmaids and groomsmen: those awkwardly attired friends and family members, bearers of bouquets and rings surrounding the happy couple on wedding stage or under chuppah.  The estate plan likewise features witnessing together with singing and notarizing of its essential instruments.  Witnesses needn’t be the functionaries of the will, living trust, etc.; there isn’t need to schlep.  Good folks from the wills and trusts attorney’s office will suffice.  A notary public is summoned  too.  After witnesses and notary put down John Hancocks and stamps, you’ll have in  hand an estate plan that is valid as an original or as a copy.  (The witnessed and notarized copy is a valid substitute if the original’s misplaced).  Your estate planning attorney is happy to preserve the original or you may take it, file it, safe-deposit-box it (yes: your estate planning attorney fancies awkward coinage of verbs– so be it) and there’s always the space beneath the mattress.

IV. The Dawdle Factor

With subtlety (or perchance bluntness), we’ve touched upon the obvious admonition that time waits for no one; estate planning is often put off with an off-hand remark:

A will or trust? Yeah, I gotta get one of those.

A reason it’s put off: selection of the estate planning party, of course. Because to err is human, to postpone (lest we chance mistake) is, ahem, even humaner? (Yikes!  I now invent adjectives too.)

Procrastination (for fear of error) needn’t be the case in composing a will and trust.  You may cut your nose (the “nose” of having an estate plan in place) to spite your face (the “face” that fears imperfection). What if I err in selection of functionaries for my will, trust, power of attorney and health care directive? Well, what if?  Recall that these are living, breathing documents, which may be expeditiously amended. Absent an existing estate plan, one neglects vital interests: protection of assets, direction for inheritance, care for your person when you can’t care for yourself and instruction for care of your children. Not necessarily in that order of priority.

V. The Cost Comparison

With multi-tiered cakes, flash photography and newly-ubiquitous photo-booths, weddings are expensive affairs.  A living trust or living estate package costs more than a cake (but not all cakes), costs far less than photography and… I would not know how it compares to photo booth prices (my wedding predated that trend).   In any event, estate planning is a fraction of the cost of single ingredients of the figurative feast we dub our wedding day.  Though its drafting falls short of the thrill of getting hitched (the estate plan culminates with notarization, not consummation), our wills and trusts are known to last longer than most marriages!

Our complete estate planning package averages $1,900 to $2,400 consistent with industry practice; yet the quality of our estate plan surpasses the competitive field by far. With sliding-scale pricing and installment plans, we ensure that this necessary legal step is affordable on an always-tight budget.

VI. Peace of Mind

We began by comparing elements of marriage to estate planning, which promote the same goal of certainty and assurance.  Marriage gives peace of mind (that there’s contractual obligation to faithfully put up with your foibles and flatulence).  Estate planning gives peace of mind (that there’s contractual protection from probate and clear direction to loved ones).  Through a living trust, family is spared from adding lack of preparedness to the long list of foibles that comprise our imperfect (but cherished) legacy.

Asaph Abrams on the Estate Plan designees
Jacob the Werewolf: not at all relevant to this estate planning blog.

Wills and Trusts Attorney, Asaph Abrams: offering free, no-obligation consultations in San Diego. Visit us online or call 858-240-6751. E-mail admin@abramslawsd.com to set an appointment.  Se habla español.

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[1]
Not to be confused with Jacob, the Werewolf.
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[2]
The Settlor is also know as You, Dear Reader, to whom this discourse is addressed.
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[3]
Exhibit “1” under  “Mortifying Circumstances of Marriage”: Absent advance coordination in the closet, long-married mates shall inevitably and unconsciously conform to matching selection of textile color-schemes. If my better half, the lovely Robin and I both dress in blue jeans and black tops, one of us will be dispatched to change (his) ensemble stat.
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