As an estate planning attorney, I sometimes receive urgent calls from clients who are about to leave for the holidays or a much-anticipated vacation, only to realize that they don’t have their affairs in order. Their excitement about travel turns to dread as they begin to imagine the worst case scenarios.
Fortunately, there are interim steps that you can take to address your estate planning emergency. You can make these preparations in a hurry. I refer to this as “Vacation Estate Planning.”
A Vacation Estate Plan is better than nothing
A Vacation Estate Plan is far from optimal. It is not comprehensive, nor is it a replacement for a well-designed estate plan. But it is preferable to having no plan at all.
This is a do-it-yourself partial plan that can you prepare quickly as a temporary measure and last resort (pun intended).
Vacation Estate Planning provides the benefit of allowing you to make decisions that otherwise would be determined by California default and intestate statutes. It also allows you to address possible litigation that could arise if there are family conflicts because you left no specific directives.
The Vacation Estate Plan is not ideal for tax planning, avoiding probate or avoiding guardianship proceedings for minor children. A more thorough estate plan will be required to address those issues.
Documents for your “Vacation Estate Plan”
Estate plans should address what will happen if you become unable to care for yourself. If you have minor children, then your estate plan should also identify those who will serve as their guardians.
Fortunately, there are free forms available that can help you to address these issues. These forms have been prepared so that they can be completed by non-lawyers.
♦ If you have minor children, then each parent should prepare a Guardian of the Estate and Person form for each child.
♦ The Durable Power of Attorney for Property legal form allows you to appoint an agent to manage your property if you become incapable of managing it yourself. (Please note that this form must be notarized.)
♦ The Advance Health Care Directive form will allow you to designate an agent to tend to your healthcare matters if you become unable to do so yourself. (Please note that this form must be signed in the presence of witnesses.)
In addition to the above, you will also want to prepare a will.
Guardian of the Estate and Person
Guardian nomination papers allow you to name the person who you want to look after the personal and financial affairs of minor children if you are deceased.
The guardian of the person manages your child’s personal lives, such as where they live, who they play with, medical decisions, school, etc. The guardian of the estate manages the child’s finances.
Frequently, parents will nominate the same person for both jobs. But you are free to divide these duties as necessary.
The importance of nominating a guardian before you go on vacation is self evident, as you will certainly want a say in who raises your minor children. Completing the guardian nomination papers will reduce the potential for infighting among family members if different family members try to assume this role. If both parents nominate the same person or people, the courts will almost certainly respect the parents’ wishes unless there are compelling reasons not to.
If you pass away as a single parent with shared custody of minor children, then it is likely that the surviving parent will become the guardian over the children’s personal affairs (the “guardian of the person.”) However, the surviving parent does not necessarily have to serve as the guardian over the children’s financial estate. If you are not comfortable with your ex-spouse managing your children’s financial estate, then you should nominate another trusted person to act as their guardian.
It is advisable to have each parent complete a separate guardian nomination form for each child.
Power of Attorney
A Durable Power of Attorney for Property (DPAP) is a document that appoints someone (an “agent”) to manage your estate in case you are incapable of doing so yourself, usually due to physical or mental incapacity.
A DPAP is only in effect while you are alive. It is not included in your estate plan after your death.
If you are going on vacation, you should nominate someone to manage your estate for you in the unlikely event that you cannot manage your affairs when you return. (This is especially true for unmarried individuals.) Married couples typically nominate each other as first agent, then choose an alternate. If one spouse dies and the other becomes incapacitated, the alternate agent will take over.
Executing a Durable Power of Attorney has the added benefit of avoiding the need to initiate conservatorship proceedings. A conservatorship is the court process by which the Court appoints someone to manage your affairs because you cannot. This is expensive, time consuming, and burdensome. If you have an effective DPAP, court intervention will not be necessary.
Rest assured that by executing a California Statutory Durable Power of Attorney that you are not granting authority to your agent to give your property away or to decide who benefits from the proceeds of your estate or life insurance beneficiaries. The power of attorney is limited in nature.
Advance Health Care Directive
Similarly to a power of attorney for property, the Advance Health Care Directive allows you to name an agent to make health care decisions for you in case you are incapable of articulating your wishes to your own doctors. This document also allows you to state your preferences when it comes to medical decisions, such as end-of-life decisions, donating organs, and pain relief.
Married couples typically appoint each other as their first agent, then name alternate secondary agents.
An Advance Health Care Directive is important so that family members don’t fight over your medical treatment. You may recall the case of Terry Schiavo, a young woman in Florida whose husband and parents engaged in an ugly public battle over whether to maintain her life support. This conflict could have been avoided with an effective Advance Health Care Directive that either stated her wishes or else appointed someone who had the power to make this decision.
An Advance Health Care Directive is particularly important for single parents with minor children, as those children will have no authority to consent to medical treatment. A single parent with adult children is also advised to have an Advance Health Care Directive to avoid family conflicts among those children and/or among other relatives.
In California, the agent appointed in an Advance Health Care Directive also has priority on deciding how to dispose of your remains. That is another potential hotspot for conflict that can be avoided with this form.
| Proper estate planning can keep your estate out of probate, saving time, money and headaches for your loved ones. To learn more about estate planning, click here to read our California estate planning FAQ. |
| Legal forms for guardianship, conservatorship and power of attorney are available to you for free. Click here to learn more. |
| Estate planning and probate are easier to understand when you learn the terminology. Learn more by clicking here for our glossary. |
Wills, living trusts and probate
Without a will, the state will follow default rules for who receives your property when you pass away.
A will allows you to designate who receives your property and to appoint an executor who can manage the distribution of your estate.
But having a will alone is not sufficient for avoiding probate. If probate is necessary, a court-appointed executor will be entitled to high fees.
Without a living trust, an estate in California that is larger than $150,000 will be subject to probate. For many homeowners who die without a living trust, a house owned either singularly or co-owned with a spouse who also dies will have to be probated.
Probate is an expensive, slow process that is best avoided if possible. Although it is better to have a will than nothing at all, many may find that a living trust is more suitable than a will. Accordingly, thorough estate planning should help you to avoid probate and allow you to determine whether a trust is a superior choice for you.
Using a holographic will
A will that is typed should be signed and dated in the presence of witnesses. But if you do not have sufficient time to prepare a will or living trust, then you may choose to use a holographic (handwritten) will.
A holographic will is one that is written in your own handwriting, signed by you and dated. For a holographic will to be valid in California, it is important that the will is NOT witnessed or notarized. The validity of your holographic will would be established by a court via sworn statements from adults who can recognize your handwriting.
The will should include a clause that you intend it to be your will, name an executor and state how your property is to be divided. Your holographic will should also have your name printed clearly to accompany your signature. It is recommended that you name your children individually along with their ages, even if you intend to disinherit one or more of them.
A holographic will is far from ideal. Such a will is unlikely to avoid all of the issues that could be prevented with more complete estate planning. However, it will allow you to leave your estate to the people, organizations, and charities you choose, and to prevent a share of your estate from being left by the default rules to relatives who otherwise you would have disinherited.
What to do if you already have an incomplete estate plan
Recently, I received a thick envelope from one of my clients. I opened it to find the signed draft version of a living trust that I had prepared for her. She explained she would be on vacation and just wanted to make sure that she had something in place in the event that the unlikely happened.
Although we had not yet finished her estate planning, she was wise to be proactive. The signed version of the draft document would have reduced difficulties for her estate had something happened to her while on vacation, such as keeping her house out of probate.
If you are in the midst of your estate planning but have not yet completed it, you may choose to follow my client’s example. Do what you can as a stop gap before you leave, then complete your estate plan after you come home.
Don’t panic
With minimal effort, Vacation Estate Planning can serve as a temporary measure that will address at least some of the issues common to estate planning. Just be sure to prepare a more thorough plan upon your return.
In the unlikely event that something does goes wrong during a trip abroad, the US State Department may provide some assistance.
Safe travels. Bon voyage!