Essentials of Estate Planning

Essentials of Estate Planning

Estate planning can seem overwhelming when you first begin planning for the future. You often start with more questions than answers, and the information online can create more confusion than guidance. At Copenbarger & Copenbarger, we work to ensure that all our clients feel educated, informed, and in control of their plan for the future. Our firm serves clients all over the state of California, and I focus on serving our clients in the greater Bay Area.

The first question we seek to answer is whether or not you need an estate plan at all. An Estate plan is designed to give you control of what happens to your assets if you became incapacitated or pass away. Often people think of estate planning as what happens when you’re alive and well, and what happens after you pass away. But what about the in between? 

One of the most crucial aspects of your estate plan should address what happens while you are alive, but not well. These intimate decisions are ones that you are able to make using a comprehensive estate plan.

Power of Attorney 

At some point in a person’s life, typically seniors, will either need help managing their finances or will need someone else to handle their financial affairs if they are unable to do so themselves. While many will already have an Advanced Health Care Directive or Durable Power of Attorney created during their lives, it is important to make sure that these documents remain up to date and reflect the current wishes which fit their needs. When the documents are outdated, it can leave the family with its hands tied, unable to make the necessary medical or financial decisions on the person’s behalf without getting the court involved. It is crucial to have a set of powers of attorney which match your current stage of life.

Advance Healthcare Directive

One of the first documents we ensure each of our clients has is an Advanced Healthcare Directive. If you are over the age of 18, you need an Advance Health Care Directive. Often the assumption is made that your spouse could automatically make your medical decisions if you are unable to, or that your parents can continue making your decisions once you become an adult. However, when HIPPA laws changed in 2004, it became essential to have a written directive. No person has the power or right to make your medical decisions unless you give them that ability under the HIPAA law.

A Healthcare Directive allows you to name an agent to act on your behalf concerning medical matters if you become incapacitated and are unable to communicate your wishes and decisions to your doctor. 

If you do not have a written directive, the court may get involved and appoint someone to make those decisions for you. This may or may not be someone that you would want. 

By leaving instructions for your end-of life care within your directive, you can give some much-needed guidance to your loved ones. This guidance allows them to not have to assume what your wishes would be and can remove the burden from their shoulders when it comes to stopping treatment, what to do with your remains, and more. As such, it is very important to not only make sure that your current wishes are in place, but to also discuss your wishes with the person, or people, that you have named in your Advance Healthcare Directive. This gives them the chance to ask questions, for you to explain your choices, and can provide some much-needed peace of mind during what a very difficult time. 

The last thing you should be worried about is who can make your medical decisions in a time of need. We will help guide you through these decisions and ensure that your wishes are clearly outlined for your loved ones. 

Durable Power of Attorney 

A Durable Power of Attorney allows you to name an agent to act on your behalf concerning financial matters. If you have issues traveling to the bank or want someone else to handle your bills and finances, you can achieve this by using your Durable Power of Attorney. This document allows your agent to care for your financial matters on your behalf without having to prove any kind of medical disability. It also gives them the ability to fill out paperwork necessary for any assisted living or nursing home admissions. To determine if a Durable Power of Attorney is right for you, you should contact an attorney to review your current situation and planning documents, if you have any. 

It is important to note that your Durable Power of Attorney is only in effect during your life. Once you pass away, the document cannot be used to manage the assets that you had. 

Wills vs. Trusts

A lot of people come to us unsure of whether they need a will or a trust. The two are often used interchangeably, and the information can become overwhelming without someone to help you sift through what is relevant to you and your situation. 


You should have a will if you do not have real estate, if you have an estate of less than $166,250, or if you are the parent of minor children. 

It is crucial to note that having a will does not mean that you can avoid probate. If you die with a will, it must go through probate in order to be effective. So, if one of your goals is to avoid probate, then a will is likely not the best option for you. 

Probate is required in order to settle accounts with the living, to settle the accounts of the decedent, and to transfer title from the decedent to their heirs or beneficiaries. 

Probate is a legal process that follows the State’s rules. There is often a lengthy delay as you are on the Court’s calendar. For anyone who has dealt with the Court, I am sure you can attest that the Court is not an efficient entity. This delay can cause undue stress on the family. It is also a significantly more costly process. The Probate Code sets the fees that are applied to the estate, and depending on the size of the gross estate, this fee could be substantial. 

The good news is that Probate can be avoided by using Trusts!


A Trust is a contract between the Settlor (fancy way of saying creator) and the Trustee (manager of the assets). The Settlor sets the terms of the Trust and determines how assets will be managed, who they will go to and in what manner, and when they will be dispersed. The Trustee’s job is to carry out the settlor’s wishes. Each family and situation is different, so your Trust should be customized to your individual situation. One size does not fit all, and our firm prides itself on providing customized Estate Plans for an affordable cost to the client’s we serve. 

Your Living Trust is created during your lifetime and can be revocable or irrevocable. A Trust can also be used for income tax, estate tax, and gift tax protection. 

Advantages to a Trust

The Trust keeps the estate out of probate which protects against the costs and delays that come with the Court, it protects your privacy as the Trust does not need to be lodged with the Court, it can defer or avoid income and estate taxation, and avoids court-supervised guardianships or conservatorships. 

Disadvantage to a Trust

A Trust only avoids probate on assets properly transferred to the Trustee. When you establish a Trust, a crucial step is to ensure that title of certain assets is given to the Trust. I walk my San Jose, Capitola, and Sacramento clients through a comprehensive list of which assets should be titled in the name of the Trust, and which ones should not be. Any asset that should be given to the trust, and is not when you pass away, may still need to be probated. 

Pour Over Will

Earlier I went through when you need a Will. Those Wills take the place of a Trust. A Pour Over Will accompanies a Trust. Your Pour Over Will names an executor if you forget to title the necessary assets in the name of the Trust and it needs to go to Court. The Pour Over Will tells the Court that the asset that was left out of the Trust should be given back to the Trust and distributed pursuant to the Trust’s terms. 

 Your Pour Over Will is also where you name a guardian for your minor children. 

Guardianship designations are one of the most intimate decisions that you can make. You are trying to name someone who will take your place if you are no longer able to care for your children, and this can seem like a daunting or impossible task. During our initial consultation we discuss attributes that would make someone a great guardian for your children, and which ones would not. 

In our initial consultation we also discuss the difference between the Guardians of the Estate, and Guardians of the Person. Some people are more equipped to handle finances while others are more capable of taking care of the children. In some situations, these are the same people while in others they are different. Your plan should be tailored to your situation and family, as there is no “normal” way of doing things.

Additional Trust Protections

A/B Trust

For married couples, you could choose to include what is called an A/B Trust. An A/B Trust helps protect fifty percent of the estate in the event the surviving spouse remarries. It also helps protect fifty percent of the estate from creditors and lawsuits and can maximize tax credits available. 

Generation Skipping Trust

If you have children, you can also include a Generation Skipping Trust. A common misconception from the name is that your children will be skipped over and will not receive an inheritance. This is in no way the case. Instead of your children receiving their inheritance outright, it goes into a protective Trust, like a lockbox, for their lifetime. You can give them the position of Trustee, or if there is concern over spending habits, can put someone else in that role to manage the money on their behalf. 

This protective Trust helps to ensure your wealth stays in your family line. It protects your children’s inheritance from creditors, lawsuits, bankruptcy, the IRS, and even from it being taken in a divorce proceeding. Your child is able to benefit from their inheritance for their lifetime, and the Generation Skipping Trust ensures that the remaining estate will ultimately pass tax-free to your grandchildren. That is where the skip comes from; it will skip a tax when it passes to your grandchildren. 

Long Term Care Protection Plan

Times are incredibly difficult right now, and nursing homes, while never the ideal choice, are even less ideal in the current situation. However, we want to ensure that in every scenario of life, no matter how unpleasant, that you are protected to the fullest and have as many options available as we can make possible.

We offer a preventative plan which will allow you to have more options for how to pay for your long-term care, that you may not think you qualify for. For most of us, our assets have disqualified us from being able to benefit from Medi-Cal paying for our long-term skilled nursing needs.  However, with our Med-Cal Trust, we not only make it possible for you to retain your assets, but to also qualify for Medi-Cal benefits. 

By setting up this planning, we protect you against state recovery in the event you need Medi-Cal to pay for the long-term skilled nursing, as well as preserving the assets for the healthy spouse. One of the worst decisions is choosing whether to pay for your spouse’s care needs or keep enough assets for yourself. With this planning, we allow you to do both. Further, this planning allows you to preserve your assets so that you can leave your children an inheritance, rather than spending all of your resources on a care facility. 

This planning also allows you to continue living in your home, and that state cannot take it away to let you qualify. You are able to keep the home and qualify for Medi-Cal benefits. 

If you would like to learn more about any or all of the documents discussed, to review a current estate plan that you have, or to create an estate plan, please contact us at 800-244-8814 to set up a free consultation. 

If you have any further questions about asset protection planning and strategies to shield your wealth, or if you’d like to have your current asset protection plan reviewed to make sure it still meets your needs, please contact us at our California asset protection office at 800-244-8814 to set up a consultation.

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