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The Morton Memo - December 2014

Happy Holidays & Happy New Year! Start off the new year by learning about estate planning and how it can help you with our firm attorney Mike Ritter's article.

The Morton Memo is for you, so kindly email us those topics of interst to you.

>> The Five Essential Components to a Comprehensive Estate Plan    


The Five Essential Components to a comprehensive estate plan

By Mike Ritter, Attorney

Data LockSetting up an estate plan should be part of everyone's long term strategy. For individuals and families alike, an estate plan is a risk management tool no less important than insurance coverage. With both a comprehensive estate plan and adequate insurance coverage comes pease of mind and resources to avert disaster. Without them, what can go wrong will go wrong.

 When establishing an estate plan, five components should be considered to effectively meet the goals for each individual or family. All five may not be required.

1. Trust. A trust has the effect of changing title to assets in order to avoid probate. Probate is the court supervised process of administering a deceased person’s estate. It is generally accepted that probate should be avoided due to lengthy delays and high cost. Trusts also allow for complete control in how assets are distributed before and after one’s death. A properly drafted trust can also be used for tax planning and wealth management.

2. Will. A will is the basic tool for estate planning but it can be the most important. A will states how an individual’s estate will be distributed after death. It also appoints certain persons to serve as guardian for the deceased’s minor children. A person who dies without a will (or trust) is subject to the California law of intestate succession. This means the law determines how the assets are distributed. It also means the court must appoint a guardian for the deceased’s minor children. Both the asset distribution and the guardianship appointment are part of the aforementioned lengthy and expensive probate process.

3. Durable Power of Attorney. A durable power of attorney (DPOA) names a representative to act for an individual when they are unable. Illness or injury may result in the inability to make certain important financial decisions. In this case, the representative is authorized to make such decisions, sign documents and manage matters on behalf of the individual. The alternatives for an individual needing such assistance without a DPOA are limited. The most common solution is a conservatorship whereby a court appointed person is responsible for the affairs of another. Conservatorship proceedings, like probate, can be complex and expensive.

4. Health Care Directive. A health care directive has two key features. First, a representative is appointed to make health care decisions when the individual is unable. Second, the directive states specific end-of-life desires to be followed by the representative and/or the individual’s caretakers. One can easily see the importance of having the appropriate decision maker there when the need arises. By offering the end-of-life direction, the individual also helps those responsible for such decisions, thus easing the inevitable anxiety associated with this process.

5. HIPPA Authorization. The HIPPA authorization is perhaps the most overlooked component of the estate plan. This document names a representative to seek and receive medical information and records on behalf of the individual. Without a valid authorization, health care providers are prohibited by federal and state law from releasing information. In many cases, a HIPPA authorization is signed when one is admitted to a hospital or undergoes medical treatment. However, the HIPPA authorization may not be consistent with the individual’s health care directive and information may not be released to the person with health care decision making authority. Therefore, it is important to include a HIPPA authorization with a comprehensive estate plan to ensure the information gets to the right person.

There are many important factors to consider when establishing an individual or family estate plan. Issues such as blended families, domestic partners, business ownership and high net worth must be carefully evaluated. However, the essential components discussed above apply in nearly every individual or family estate plan. The goal in every case should be a comprehensive plan to manage risk and offer peace of mind.

Mike Ritter is an attorney with the firm and works in the area of real estate and cell phone site leases in particular. He can be reached at (760) 917-1123 or via e-mail at

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