Estate planning isn't just for the wealthy—it's for anyone who wants to protect their family and ensure their wishes are carried out. Without proper estate planning documents, California's intestacy laws will decide what happens to your assets and who makes decisions on your behalf. Here are the five essential documents every California family needs.
Last Will and Testament
A will is the foundation of any estate plan. It specifies how you want your assets distributed after your death and who should be the guardian of your minor children.
What a Will Covers:
- Asset distribution - Who inherits your property, money, and belongings
- Guardian designation - Who will care for your minor children
- Executor appointment - Who will manage your estate and carry out your wishes
- Pet care - Who will take care of your pets and funds for their care
- Final arrangements - Your burial or cremation preferences
Important: A will alone does not avoid probate in California. Assets distributed through a will must go through the probate process, which can take 9-18 months.
Revocable Living Trust
A living trust allows your assets to bypass probate entirely, saving your family time, money, and stress. You maintain complete control of your assets during your lifetime and can change the trust at any time.
Benefits of a Living Trust:
- Avoids probate - Assets transfer immediately to beneficiaries without court involvement
- Privacy - Unlike wills, trusts are not public documents
- Incapacity planning - Your successor trustee can manage assets if you become incapacitated
- Cost savings - Eliminates expensive probate fees (typically 2-4% of estate value)
- Out-of-state property - Avoids multiple probate proceedings in different states
Note: A living trust requires funding—you must transfer ownership of your assets (real estate, bank accounts, investments) into the trust name for it to work properly.
Durable Power of Attorney for Finances
This document designates someone you trust to handle your financial affairs if you become incapacitated. Without it, your family may need to go to court to obtain conservatorship—a costly and time-consuming process.
Your Agent Can Handle:
- Banking transactions and bill payments
- Managing investments and retirement accounts
- Real estate transactions
- Filing taxes and dealing with government benefits
- Managing business interests
- Making insurance claims and decisions
Critical: Choose someone you trust completely, as they will have broad authority over your finances. Consider naming alternate agents in case your first choice is unavailable.
Advance Healthcare Directive
This document combines a healthcare power of attorney and a living will. It names someone to make medical decisions on your behalf and specifies your wishes for end-of-life care.
Two Key Components:
Healthcare Power of Attorney
Designates an agent to make medical decisions if you cannot communicate. This includes:
- • Choosing doctors and healthcare facilities
- • Consenting to or refusing medical treatments
- • Accessing medical records
- • Making decisions about medications and procedures
Living Will (End-of-Life Instructions)
Specifies your wishes regarding:
- • Life-sustaining treatments (ventilators, feeding tubes)
- • CPR and resuscitation preferences
- • Pain management and palliative care
- • Organ and tissue donation
POLST Form: If you have serious health conditions, consider also completing a POLST (Physician Orders for Life-Sustaining Treatment) form with your doctor.
HIPAA Authorization
The Health Insurance Portability and Accountability Act (HIPAA) protects your medical privacy. A HIPAA authorization allows your designated individuals to access your medical information and speak with your healthcare providers.
Why You Need This:
- Without HIPAA authorization, even your spouse or adult children may be denied access to your medical information
- Allows family members to discuss your care with doctors and receive medical updates
- Essential for making informed decisions about your healthcare
- Works in conjunction with your advance healthcare directive
Tip: Name the same people in your HIPAA authorization as you did in your advance healthcare directive to ensure seamless medical decision-making.
Additional Important Considerations
Beneficiary Designations
Review and update beneficiaries on life insurance policies, retirement accounts (401k, IRA), and bank accounts with payable-on-death (POD) or transfer-on-death (TOD) designations. These override your will and trust.
Regular Updates
Review your estate planning documents every 3-5 years or after major life events: marriage, divorce, births, deaths, significant asset changes, or moving to a different state.
Document Storage
Keep original documents in a safe but accessible location. Provide copies to your named agents and executors. Consider a fireproof safe or safety deposit box for originals.
Family Communication
Discuss your estate plan with your family and the people you've named as agents, executors, or trustees. Make sure they know where to find your documents and understand your wishes.
Ready to Create Your Estate Plan?
By The People® can help you prepare all of these essential estate planning documents affordably and accurately. We serve families throughout San Luis Obispo and Santa Barbara Counties.