People who create an estate plan will usually set an executor and powers of attorney designations. For the people who are named in these positions, understanding what they mean is important. There are specific duties that must be handled properly. Failing to do these correctly can be costly for the heirs since mistakes may come with increased expenses and time.

It is best to understand your duties before you need to do them so that you are prepared. This is important if the person is your loved one since you will need to handle these tasks while you are still in shock about what’s going on.

Duties of an executor

An executor of an estate must find the heirs and assets of the estate. They also need to prepare and pay the final tax return for the estate and handle creditor claims. The will must be filed with the court and approved by the probate judge before the executor can distribute funds to the appropriate individuals or entities. It is possible for the probate process to be bypassed, but only if certain conditions are met through the use of trusts. In most cases, the executor will also handle the funeral expenses for the decedent.

Duties for a person with powers of attorney

The duties of a person who has powers of attorney occur before a person passes away, but only if the person is incapacitated. There are two primary duties that the powers of attorney handle. The one you are responsible for depends on the terms of the designation. You might be charged with making medical or financial decisions. In some cases, the same person is responsible for both.

When you are given the health care powers of attorney, you will make medical decisions for the person. There might be a living will or advance directive in place, so knowing the contents can be beneficial. You have to think about what your loved one would want instead of what you want. This can be challenging when there is a conflict.

A person who has the financial powers of attorney has to make financial decisions. This includes making investments, paying bills and similar matters. Just as is the case with the health care powers of attorney, you have to do what the person would have wanted and not what you’d do in the same situation.

Because these duties are often complex, many people will have questions or concerns. Some people choose to have legal representation to prevent costly errors. This gives them the opportunity to ask questions about how laws in California might impact the situation.

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When someone dies without a will, the California probate courts will have to handle the distribution of assets. People call this process “intestate succession.”

Thankfully, there are relatively clear-cut laws in place in the state that guide the courts in dividing the assets of someone who dies without a will among their closest relatives in a fair and reasonable manner.

In many situations, how the courts must handle assets is straightforward. However, when the deceased is part of a blended family, things quickly become more confusing.

A blended family involves a couple who marries with pre-existing children from outside of their relationship. In other words, one or both of the parents have a biological or adoptive child that is not biologically or legally related to their spouse.

People in blended families facing an intestate succession may have questions about who gets what under California law. This can lead to unnecessary conflict between stepchildren and stepparents in the wake of a tragic loss.

Distribution of the property depends on the kind of property

It may sound strange, but the courts will, in many ways, handle an intestate estate for a blended family in a manner similar to how they handle property in a divorce. The first step is to determine what property is the separate or sole property of the deceased and what property is owned jointly by the deceased and their spouse.

Most assets acquired during marriage or with income earned during the marriage are marital or community assets. The surviving spouse will usually retain their own ownership interest in marital property and will receive the full ownership interest held by their spouse in the marital property as well.

However, any separate property will be open to division with children biologically or legally related to the deceased. Separate property includes property inherited, received as gifts or owned prior to the marriage.

How will the courts handle separate property?

Intestate division for blended families will vary based on the number of children. If there is one child, the surviving spouse and child will each receive half of the separate property. For families with two or more children biologically related to the deceased but not the surviving spouse, the separate property gets divided into thirds, with one-third going to the surviving spouse and the remaining two-thirds divided between the children.

It’s also important to note that the rights of biological children pass down to biological grandchildren. In fact, the surviving spouse will have to share that separate property with other family members even if there aren’t children. Parents of the deceased will have a claim to a portion of the separate assets.

Many factors can impact how the courts handle an estate without a will. Consulting with an estate and probate attorney can help you know what to expect in your situation.

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For estate planning purposes, it is important to keep track of the loans and financial gifts that you give to your children while you’re still alive. Do they count as an advance on that child’s inheritance or not?

Maybe you have three children, for example. Two of them do very well financially and need nothing from you. The third struggles to make ends meet. When that child wants to buy a home, you give them $50,000 so that they can have a down payment and cover the other related costs. The child promises to pay you back, but you do not set up monthly payments or make any other solid plans.

If you pass away and leave equal amounts of money to all three children, will the other two feel slighted? Technically, they ended up with a smaller portion of your wealth. To avoid this, do you want to count the $50,000 as an advance? You can then give that child $50,000 less as part of your estate plan, evening things out and keeping the peace between the kids.

Experts warn that your will and/or trust should specify exactly what you want. If it does not mention the loan or the gift at all, it does not count as an advance, but you can put into the document that an unpaid loan should count against the inheritance. This way, the child can pay back as much as possible while you’re alive — perhaps even the whole loan — and then the estate plan simply makes up the difference.

As you can see, these situations often get complicated. Be sure you understand exactly what steps to take.

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Single adults who don’t have children might assume that they don’t need a will. Without a will, you won’t have any say in where your assets go. You also won’t be able to name someone to handle your affairs if you are unable to do this due to incapacitation. Even your choices regarding medical care might be up in the air due to your not having an estate plan.

There are several components that you need to consider when determining what you should do for an estate plan. You should handle them one at a time so that you are certain everything is set up how you want it.

Components of an estate plan

There are many components for you to think about when you are creating an estate plan. The will is the cornerstone of the plan. It should include a plan for any assets that aren’t covered by other aspects. You can transfer many assets to your loved ones and charities through trusts. There are various types of trusts, so find out which one meets a specific need. Many financial accounts have a payable on designation that outlines who will get possession of it when you pass away.

The last components of the estate plan have to do with your life and assets if you can’t make decisions for yourself. You can give a person power of attorney over your health care. You can also set a power of attorney for your finances. The individuals you choose for these duties should be familiar with your wishes. You should also set up your living will, which outlines what you want for medical care if you can’t voice your wishes.

Passing away without an estate plan

The state has a set order in which your relatives would get assets if you pass away without an estate plan. If you have relatives within the first grouping covered on the intestate law, those individuals will receive your assets. If nobody in that grouping exists or can be found, they will move on to the next grouping. This continues until all possible heirs are exhausted. The state will ultimately receive your assets if there aren’t any beneficiaries.

Even if you think you have plenty of time, now is the best time to get things together. This is the only way that you can ensure that your assets go where you desire when you aren’t here any longer.

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Your last living parent or perhaps another elderly relative whose estate you were chosen to administer has passed away. They never got around to downsizing and decluttering — something we talked about recently. They’ve got a home filled with items that go back many decades. Some may have considerable monetary value, while others may only have sentimental value — and maybe not even that.

If your loved one didn’t detail in their will how they want these items to be distributed to family or other beneficiaries, you may decide that the best course of action is to sell the items that are worth something at an estate auction and add the money made from them to the estate’s assets. Before you contact an auction house to evaluate these belongings, it’s good to have some idea of what is worth selling.

Of course, antique furniture can sell for a considerable amount. However, many items you may not consider valuable are worth a respectable price to collectors. These include:

Collections: Coins, stamps, baseball cards and comic books may be valuable — particularly if they’re in good condition.

Vintage toys: Even toys from the 1980s can be valuable — particularly if they’re made from cast iron or tin.

Vintage clothing: The value will depend on their condition, how old they are, whether they’re handmade and if they’re designer items.

Costume jewelry: This isn’t all junk. Pieces made from low-carat gold, silver or Bakelite can fetch a good price. Older watches (the kind you have to wind) can be valuable as well.

Tools: Specialty workshop tools, like those used for woodworking, and handmade or antique tools can have a high resale value.

Vintage housewares and appliances: Baking dishes, mixers and other items found in kitchens in the mid-20th century can go for a good price. If you saw something like it on Mad Men, it may be worth selling.

If you’re not sure if an item or collection has value, it’s best to let a professional evaluate it before giving it to the nearest thrift shop or tossing it in the trash. It’s essential to find a trusted auction house.

An experienced estate planning attorney can likely recommend one or more auction houses in your area. They can also provide other valuable assistance as you clean out your loved one’s home. It’s best to contact them before you begin the process.

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As we progress through adulthood, our lives tend to get bigger — more kids, then grandkids, a larger house and more possessions. Then we reach a point where we no longer need that big house and all that stuff. The kids are grown, maybe our spouse is gone (through divorce or death). That’s when downsizing becomes an attractive option.

Many people reach this “downsizing” phase of their life about the same time they’re doing their estate planning. Your downsizing can actually be an important component of your estate planning. By getting rid of things you no longer need or want, you’re saving your loved ones from having to do it after you’re gone. Moreover, this is a chance to give things away while you’re still around to know they’re appreciated.

The idea of downsizing can be overwhelming. That’s why it’s best to take it one step at a time. Even if you’re not moving to a smaller home right away, you can start decluttering your current one. Often people will start with one room. Sometimes, they start even smaller — with their bookshelves, for example. Maybe you’ve got books you’d like to share with your grandchildren. You may choose to give them to a local charity thrift shop or a public library.

Clothes are another thing that we tend to accumulate over the years. Giving away clothing you haven’t worn in years can free up a lot of closet and drawer space.

If you’ve got jewelry, collectibles or other items of sentimental value to loved ones that you don’t look at or wear any longer, why not give them to family members who’ve expressed an interest in them or whom you’d like to have them?

One of the keys to downsizing is not to refill the empty space with new things. That can be more difficult to do if you’re not moving to a smaller home right away, but downsizing requires being vigilant.

If you’re giving away items that are valuable, it may be best to let at least the executor of your estate know. This way, your family won’t be looking frantically for valuables after you’re gone that you gave to charity. Your estate planning attorney can provide other valuable guidance as you make decisions about what to leave to loved ones and other beneficiaries both while you’re alive and after you’re gone.

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Often when people use trusts to leave money to family in their estate plans, they don’t designate specific dollar amounts. They will designate that whatever assets are in the trust at the time of their death be divided — sometimes equally and sometimes not. If you’re the beneficiary of a trust, finding out how much you’ll receive may take some research — and patience.

It’s also important to determine when you’re entitled to your share of the trust assets. Often a trust will read something like “distributions shall be made upon the settlor’s death.” That means that once the estate debts, expenses and taxes are paid, the remaining assets will be distributed.

In some cases, however, the trust grantor places conditions on the distribution of trust assets. For example, they may designate that a beneficiary needs to have reached a certain age. The funds may have to be used for specific purposes, like college.

Often, grantors will designate that the assets in a trust be divided equally among their children. In these cases, they’ll add a clause that if a child predeceases them, that child’s own kids will get an equal portion of their parent’s share of the estate.

Distributions from a trust are typically managed by a trustee who’s chosen by the grantor. They’re required to act according to the instructions provided by the grantor. Some are given more discretion than others.

It’s generally best when people develop an estate plan if they let their family know, at least in general terms, how they are choosing to distribute their assets. Unfortunately, people don’t always get around to having these conversations. Sometimes, particularly if they fear their decisions will be unpopular, they intentionally leave their loved ones in the dark.

If you’re the beneficiary of a trust, and you have questions or concerns about your inheritance, you may want to start by talking with the trustee. If you’re not satisfied with the answers you’re getting, you may want to seek the guidance of an estate planning attorney.

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As you age, you’re more likely to think about your future health and well-being. For example, you may have questions about what will happen to your assets in the event of incapacity and who will make important decisions on your behalf.

You’re not required to add a living will to your estate plan, but it can give you peace of mind in regard to the type of treatment you receive in the event of a serious illness or injury.

With a living will in place, your health care team will have a clear idea of the type of treatment you want to receive if you’re unable to personally communicate your desires.

Here are some of the benefits of creating a living will:

• You have the ability to make important medical decisions when you’re 100 percent healthy
• You take the stress off your loved ones, as they don’t have to make these decisions on your behalf during a very stressful time
• You can name a person in your living will to speak for you if you’re faced with a terminal condition

Whether or not you create a living will depends on many factors, including your willingness to answer a variety of difficult questions regarding your health.

Some of the things you have to address include:

• When you want your living will to kick in
• What type of treatment you want to receive, and what type of treatment you want to turn down
• The financial cost of extending your life when there is not much hope (or any) of making a recovery
• The emotional impact on your family of prolonging your life (without any quality of life)

Note: Don’t confuse a living will with a regular will, as these two documents are different. A regular will is designed to ensure that your assets are passed along to the right person or people upon your death, among a variety of other reasons. Furthermore, it doesn’t go into effect until you pass on.

It’s never easy to think about a serious injury or illness that wouldn’t allow you to communicate with your medical team, but this could happen. If you want to protect yourself and your loved ones, the creation of a living will is a good place to start.

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By having a thorough, professionally-developed estate plan, you can ensure that your affairs will be looked after responsibly if you become physically and/or mentally incapacitated and unable to do so. You also can plan for your assets to be disbursed as you’ve designated after you’re gone.

However, it’s essential to make sure that you protect those assets and your intentions when you develop your estate plan and designate your executor, trustees and powers of attorney. While it may seem inconceivable that a family member or other trusted person would betray you, there are no guarantees. Money can make people do things that no one — even they — would have believed they were capable of.

Following are some steps you should consider when developing or revising your estate plan to protect your assets.

Have checks and balances

It’s best not to place one person in charge of your entire estate. For example, if you have a trustee, it’s a good idea to have a trust protector who can step in if they see an issue. Don’t prohibit the removal of anyone — including the trust protector. Another type of check on the estate is allowing the estate to be contested. It may be wise to avoid including a “no contest” clause.

Consider an irrevocable trust

Many people avoid these trusts because of the restrictions on them. However, it may be a wise choice for some of your assets to help ensure that the assets aren’t misused. However, be aware that under California law, trustees can now amend irrevocable trusts without getting the approval of a probate judge unless there’s a clause that prohibits “decanting.” Decanting is essentially re-evaluating a trust and distributing the assets in a way that’s determined to be preferable for the beneficiaries.

Distribute your assets now

If you have assets that you intend for particular loved ones to have and you have no need for them, you might consider giving them away while you’re still around. This can minimize estate battles after you’re gone.

Your estate planning attorney can advise you as you develop your estate plan or amend it as your needs and your family change.

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Serving as the executor of someone’s estate is a difficult job. Many people find that they have to take a leave from work in order to handle everything involved. Depending on the size of the estate and the level of preparation undergone by the testator, you could have several weeks or even months of bookkeeping, asset location and distribution ahead of you.

With so much to do, you might be looking for ways to decrease the amount of time that tasks require. Choosing not to write everything down could seem like a reasonable way to speed up things.

However, failing to create clear records could cause serious legal issues for you down the road. No matter how frustrating or repetitive it may seem, you must document every single thing that you do with assets from the estate.

A clear accounting of who got what protects you as executor

The heirs and beneficiaries of an estate are often disappointed with what they receive. Even when someone has been very generous, people can still take offense with their inheritances.

Occasionally, frustration with the outcome of the estate plan can lead people to challenge the estate or even the administrator. They might allege theft or misappropriation of estate assets. If you don’t have proof of who got what and when, the courts could side with the person challenging you.

There could potentially be financial and legal complications, depending on the value of the assets involved. The best way to protect yourself from allegations of misconduct is to track everything that you do for the estate in writing.

Even family members should sign receipts for assets they receive

You probably already know that you need receipts to prove that you paid off and closed the necessary accounts, handled taxes and liquidated certain assets. What you may not consider is the fact that physical assets often have significant value as well.

A necklace, for example, could have both emotional and financial value to the members of the family. Once you have the assets set aside for a particular heir or beneficiary, that person should sign a receipt that verifies they received the items. Creating receipts for physical assets helps ensure that there is no confusion about who received which items. It can also help you if someone claims they didn’t receive an asset that they did, in fact, obtain from the estate.

In addition to receipts for physical items, maintain documentation for all major transfers from estate accounts into beneficiary accounts. Those records can help you in the future if your role as executor or capability in that position winds up challenged in court.

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