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A major reason people want to do estate planning is to protect their hard-earned assets, whether for themselves or their loved ones. A frequent concern is the possibility that there will either be issues with creditors/legal judgments and settlements or a bankruptcy situation for both the estate holder or the heirs, or divorce for the heirs. Wanting to protect the estate from those types of claims is essential, and it’s a form of protection not offered with individual retirement accounts (IRAs). One way to do that is through a private retirement plan (PRP), a program held under California state creditor law. It’s a unique form of estate planning that
offers many safeguards other forms of estate planning do not. Here’s what you need to know.

What Does a PRP Protect?

It protects the named assets by exempting them from liens and seizures, whether due to bankruptcy or lawsuit settlements. It can also safeguard heirs by keeping the inheritance out of community property in marriage. Then, if the couple divorces, the spouse will not be entitled to the inheritance, which they could be otherwise.

The assets in the trust, including any earnings, gains, and future values, are safe while accumulating. Depending on the size of the estate and the assets within, the PRP may be able to take advantage of several tax benefits as well, which could conceivably offset the cost of setting it up. This is especially true for business owners.

When Should I Begin Developing a PRP?

There are situations when people face an unexpected financial problem, such as a lawsuit with a large settlement, and they want to put their assets in a PRP at that point to protect them. For example, a surgeon could face a malpractice lawsuit that could far exceed what his insurance covers. However, one criteria for the PRP to be legal and successful is that it’s done primarily for retirement benefits, not to evade creditors and judgments. That’s why a PRP should be set up as early as possible while there’s no pending financial problem on the horizon. By the time the surgeon faces the lawsuit, it’s too late.

Note that if the estate holder passes away before creating a PRP and the estate goes to a married inheritor, it may be too late for the inheritor to define it as a PRP.

Also, understand that this is a long-term planning tool. While it has many shorter-term benefits, it is structured specifically for retirement. If you have cash reserves you think you need before retirement, you may want to think about keeping those out of the PRP. Our team of attorneys is happy to discuss the specifics of your situation to come up with the best plan for you.

How Is a PRP Constructed?

This is a complex plan that requires having a knowledgeable professional to ensure it’s drawn up correctly. A big part of the PRP is setting up a private retirement trust. Assets are brought into that trust and retitled to indicate they’re assets specifically to be used for retirement.

Not every asset can be contained in a private retirement trust, but many can be, whether cash or property. The key is that the trust should hold things that will be used during retirement. Things like rental properties must be excluded. But funds from existing IRAs can. Unlike other retirement plans, PRPs can be funded with private business stock and LLC member interests.

That PRP is constructed so that you can continue adding to it, just as you’d add to any other retirement program. One of the additional benefits of the PRP is that contributions to it aren’t tax deductible, so there’s no maximum limit on contributions. However, the PRP plan needs to detail the need for retirement savings, so if much more significant contributions are made than what’s required, that could raise questions. That’s why it’s critical to have an experienced estate planning professional involved in developing the PRP, especially the plan.

What’s Required to Have a PRP?

As noted above, one thing that will be examined is whether or not the estate holder is trying to avoid creditors somehow. If that’s the case, the trust may not be able to be created; a prime example of why setting this up while there are no conflicts at hand is strongly recommended.

The PRP needs to have a detailed plan that outlines the assets and how they’ll be used in retirement. Courts will look closely at this plan to ensure it’s not a precursor to hiding funds from upcoming litigation but instead appears to be a diligently considered plan for when retirement may take place and what will likely be needed. A plan needs to be presented from every person named in the trust.

Beyond that, the trust must have an independent trustee and an independent plan administrator. There are many professionals in California who can fulfill those roles.

Finally, a PRP is only valid in California. If you plan to move out of state before or during retirement, the PRP will no longer hold legally.

What Should I Do if I Need a PRP?

Call us at 916-685-1225 for a free consultation. Our team of experienced, knowledgeable attorneys can walk you through the rules and requirements to ensure your estate is protected from creditors and lawsuits for you and your heirs. Because of the complexity of PRPs and the need to have them in place before any crisis arises, getting started as soon as possible is highly recommended. It’s a good idea to plan for the worst, even if you hope it never happens.

Although the various titles of trustee, executor, and administrator may sound the same, they are, in reality, each quite different from one another. Accordingly, the law in California states the following in regard to the various legal roles each one plays in dealing with matters that pertain to an estate.

If the descendant passes away and places their assets in a trust, then a trustee manages that property. If an individual passes away with a will in place, then there is an executor who is responsible for handling the various affairs and making certain the assets are distributed to the beneficiaries. Lastly, if the deceased passed away and did not have a will or a trust in place, then an administrator is named to oversee the affairs of the estate.

If you need more information regarding the difference in these various roles or assistance in performing these duties, contact the law offices of Cava and Faulkner of Elk Grove, CA, and ask to schedule a free consultation.

How are a Trustee and an Executor Similar to One Another?

There are many similarities between trustees and executors. One of their principal duties is to manage and care for the assets belonging to the beneficiaries of either trust or will. Under California law, both trustees and executors are to be paid for their work.

What Does a Public Administrator Do?

A public administrator only becomes involved in handling the affairs of an estate if the descendant left no will and also if there is no one willing to act as an administrator. The public administrator acts just as a private administrator would to ensure that all debts are paid and that all of the descendant’s assets are discovered and properly disbursed at the appropriate time.

Whom Should I Choose to Manage My Affairs After I Am Gone?

Making a decision about who should manage your affairs after you are gone is a decision that should be given much thought and consideration. You may be uncertain as to whether you should have an executor or a trustee to handle your affairs. Remember that an administrator is only appointed if you do not have a will or estate plan when you pass away.

One thing that is important to remember is that a trust is not subject to and many of the fees associated with having a will. Unlike the executor of a will, a trustee can take over the management of a trust without a court order.

Can a Trust Attorney Help Me With Concerns I May Have About a Trustee, Executor, or Administrator?

If you have concerns about any type of individual who has been put in place to manage an estate, you need to contact the law offices of Cava and Faulkner of Elk Grove, CA, as soon as possible. Our experienced attorneys can assist you by answering any questions or concerns that you may have. Contact us by calling (979) 596-4088 and ask to schedule a free consultation.

The executor’s main duty is to ensure all matters pertaining to distributing assets and paying debts associated with the estate are completed in a timely and legal manner. Being named an executor is a position of trust, and any betrayal of that trust can have serious consequences.

Theft from an estate is known as inheritance theft and is grounds to have the executor immediately removed from their position. Suppose you feel that an executor has been stealing from the estate; you need to consult with a trust attorney as soon as possible before even more assets can be embezzled. Contact our law offices and ask to schedule a free consultation as soon as possible.

What is the Legal Definition of Stealing From an Estate?

Inheritance theft can also be considered the crime of embezzling. In many cases, the theft occurs before the estate inventory can be completed. The executor may fail to properly report assets or other financial holdings that belong to the estate.

Any type of stealing is considered to be a serious crime in California. This type of theft can be challenging to prove and may require a great deal of evidence presented by the plaintiff. Evidence can be in the form of documents and testimony from the plaintiff or other witnesses.

Can the Executor Go to Jail for Stealing From an Estate?

Inheritance theft is a criminal offense in California. The courts have the legal authority to order the Executor to make restitution to the estate by paying damages and demanding that all of the stolen assets be returned. If the state attorney decides to bring criminal charges against the Executor, they could face being criminally convicted and potentially serving up to 25 years in prison. However, often the problem is dealt with in civil court rather than in the criminal justice system. In either case, a knowledgeable trust attorney can assist you in gathering crucial evidence such as documentation, assessing damages, and providing representation in court.

How Long do I Have to Respond to Beneficiary Notice?

The trustee of an estate is required to send out a notice informing beneficiaries when trust changes have occurred. If you feel that the Executor is stealing from an estate related to forged documents, you need to act within 120 days of receiving the notice. However, if you feel that funds or other financial assets have been stolen, you still have the option of pursuing legal action even if more than 120 days have passed.

How Can a Trust Attorney Help Me if I Suspect Theft by an Executor?

If you feel that the Executor is stealing from an estate, you need to contact the law offices of Cava and Faulkner of Elk Grove, CA, as soon as you suspect the theft. We can examine any evidence you may have and assess how to proceed with legal action if necessary. Contact us by calling (979) 596-4088 and ask to schedule a free consultation.

A power of attorney is typically set in place when an individual is considered to have a sound mind. The individual makes a voluntary decision to assign an “agent” to handle their healthcare or financial affairs for them. A power of attorney can be revoked at the creator’s discretion without having to ask or inform the agent of their decision.

However, a conservatorship has a much broader legal scope in terms of the law. A conservator is appointed by a court to oversee and run an individual‘s affairs if they are mentally incompetent or in any other way unable to do it for themselves. The individual who is under the conservatorship is known as a “ward” and does not have the legal ability to revoke the conservatorship on their own.

If a power of attorney and a conservatorship conflict for any reason, the conservatorship will take legal precedence. If you would like to know more information about a power of attorney or conservatorship, contact the law offices of Cava and Faulkner and ask to schedule a free consultation.

Why Does the Court Assign Conservatorship?

A court will assign a conservator to oversee and manage the affairs of a ward if that person has been deemed to be mentally incompetent or unable to do it for themselves. In most cases, the court will grant the conservator the ability to control designated aspects of the ward’s personal life.

Routinely, conservators are assigned to control the financial dealings of the ward because they have demonstrated an inability to do so for themselves. In some instances, the ward has been subject to undue influence from others who do not have their best interests at heart.

How Can I End a Conservatorship in California?

The only way to terminate a conservatorship in California is to go to court and have the matter decided by a judge. The following is a basic outline of the steps that you must take in order to file a petition with the court:

• Hire an attorney who will help you prepare the Petition to Terminate Conservatorship
• Submit the Petition to the county court in the county in which the conservator resides
• Attend the hearing with your legal representative

If the Petition is not opposed in court, the judge will most likely grant the Petition, thereby ending the conservatorship. Of course, the ward must be able to demonstrate that they can successfully handle their own affairs. If an objection is raised, you will have to go through legal proceedings in order to convince the court that the conservatorship should be terminated.

What is Conservatorship Abuse?

Sadly, abuse in conservatorships is not uncommon. Since most conservators oversee the financial affairs of the ward that they are assigned to manage, embezzlement and fraud seem to be the most common forms of abuse. The conservator owes a fiduciary obligation to the ward they oversee. If you suspect financial abuse, you must immediately speak with an attorney.

How Can an Attorney Help Me?

If you feel that you or a loved one is being financially abused or suffering any other type of abuse from your conservator in any other manner, you need to seek help immediately. A skilled attorney can begin the legal process to have the conservatorship revoked if the ward’s best interests are not being met. Contact Cava and Faulkner of Elk Grove, CA, by calling 916-685-1225 and asking to schedule a free consultation as soon as possible.

In California, if you possess a power of attorney for another individual, you, the agent, have the legal right to act on behalf of the other individual known as the “principal.” Generally, power of attorney is delegated to an agent when the principal cannot make decisions relating to legal, financial, or health issues.

The principal has the option to determine the scope and limitations of a power of attorney. If you would like more information regarding power of attorney in California, contact the law offices of Cava and Faulkner of Elk Grove, CA, and ask to schedule a free consultation.

What are the Different Types of Power of Attorney in California?

Several different types of power of attorney available in California can be chosen based on your specific needs. The options are as follows:

• General Power of Attorney: This is California’s most inclusive power of attorney. This allows you to designate an agent, also known as an attorney-in-fact. This allows your agent to have all of the legal rights and powers that you possess. However, if you become incapacitated, this type of power of attorney is no longer valid.
• Durable Power of Attorney: This type of power of attorney has the lasting capacity to stay in effect even if you do become incapacitated and can no longer make your own decisions.
• Special or Limited Power of Attorney: The scope of this type of power of attorney is extremely limited and is typically used in order for your agent to make decisions for you if you are unavailable. For instance, you may be out of the country but need to have legal documents signed on your behalf. Once the need is met, a power of attorney is no longer in force.
• Springing Power of Attorney: A springing power of attorney’s legal authority only goes into effect when certain conditions are met, such as when medical professionals determine that the principal can no longer make healthcare decisions for themselves.

When Should I Consider Making a Power of Attorney?

Many individuals make the mistake of waiting until it is too late to consider making a power of attorney. If you become incapacitated, you would no longer be able to make the decision to appoint an agent to act on your behalf. Although it may be difficult to consider, planning ahead for the future is one of the best ways that you can protect your interests should the need arise at a later time.

Can I Have More Than One Power of Attorney?

Under California law, you are permitted to have more than one power of attorney to represent your interests. For example, you may choose to designate a separate agent to make your healthcare, financial, or legal decisions. These various powers of attorney can each be determined by your set of specific needs. An experienced estate planning attorney can help you make a decision as to how you should best proceed.

Do You Need a Lawyer to Get a Power of Attorney in California?

California law does not require individuals to hire an attorney to obtain a power of attorney (POA) to manage their affairs. However, because power of attorney documents pertain to legal affairs such as managing finances and healthcare decisions, it is a sound idea to consult with an attorney before making any decisions.

A power of attorney document grants the agent, the individual you designate to manage your affairs, the legal authority to carry out transactions on your behalf without asking your permission to do so beforehand. Therefore, it is wise to consult with an attorney in advance to understand the scope of the document that you intend to sign in order to protect your interests.

How Do I Establish a Power of Attorney on My Own?

The first thing that you will need is a power of attorney form. You can find an official form offered by the state of California online. This form allows you to choose what type of POA you would like to have. For example, you may choose a healthcare power of attorney or financial power of attorney legal document.

In order to create a legally valid power of attorney document, you and your agent need to both need to be adults and considered to be of sound mind. You must also have witnesses or a notary present.

If you plan to create a POA document without an attorney, then you need to remember the following:

• Your agent cannot also be one of your witnesses or the notary
• Your witnesses cannot be your healthcare provider, an employee of your healthcare provider, or any individual related to the healthcare provider

Can I Assign My Spouse to be My Durable Power of Attorney?

A durable power of attorney document allows your agent to manage and carry out your financial affairs in the event that you are unwilling or unable to do so for yourself. If you desire your spouse to be your durable power of attorney, then they must sign a power of attorney document in your presence. This must be done in front of a notary. If signing before a notary is not possible, then you are also permitted to sign in front of at least two witnesses who are mentally capable of providing sworn testimony should the need arise.

Can a Family Member be a Witness for a Power of Attorney?

Texas law does permit a family member to be a witness on a power of attorney document. Of course, it is worth mentioning again that in order for a POA to be valid, the document must be signed by two witnesses.

Although the law does permit a family member to be a witness, one piece of sound legal advice is that it is always best to have disinterested parties act as a witness for legal documents. This often helps to avoid conflict or disputes at a later time.

Can an Attorney Advise Me About Composing a Power of Attorney on My Own?

If you would like to know more information about composing a power of attorney, you are welcome to call our law offices of Cava and Faulkner at 916-685-1225. We will be happy to schedule a free consultation in order to answer any questions that you may have.

When Should I Consult With an Attorney About Making a Power of Attorney?

One of the best steps that you can take to protect both yourself and your family is to consult with an attorney as soon as possible about the various power of attorney options that are available. Waiting until a crisis occurs is usually too late, and the State of California could end up appointing someone to make decisions for you.

Contact the law offices of Cava and Faulkner by calling (979) 596-4088 and ask to schedule a free consultation as soon as possible.

Being named Power of Attorney in California is a huge responsibility. Power of Attorney for another individual grants you the authority to make various financial, healthcare, and estate planning decisions.

With that in mind, California has specific legal requirements that every individual must abide by in order to qualify for this duty. These requirements have been established to protect the individual who you will be representing to ensure that their best interests and needs are met by your acting as their legal representative.

Contact the law offices of Cava and Faulkner of Elk Grove, CA, to schedule a free consultation.

What is Power of Attorney?

In California, power of attorney, also known as POA, entitles you to act as a personal representative for another person to make decisions on their behalf. Power of Attorney can be limited to a specific area, such as the authority to make medical decisions, or can cover a wide variety of areas such as finances, healthcare, and other areas specifically outlined in the paperwork that grants legal power of attorney.

What Requirements Need to be Met in Order to Become Power of Attorney?

Due to the serious nature of this obligation, the individual that a person chooses to be their power of attorney must be able to meet specific requirements. The individual must meet what is known as the “capacity to contract,” which means that they have the mental capacity to comprehend the duties and responsibilities associated with the tasks that they will be required to perform, such as:

• Manage and understand financial resources
• Resist undue influence from others
• Resist fraud or the temptation to use financial resources for their own benefit.

How Does Power of Attorney Go Into Effect?

For a power of attorney to be legal in California, the POA forms must meet specific legal requirements such as:

You must sign the document. If you are unable to sign, then another person must witness it for you.

• The agent and the witnesses must be at least 18 years of age
• The document must also be signed by at least two other adults.
• The agent is not permitted to be one of the witnesses.
• The power of attorney document must be notarized

Can I Revoke the Power of Attorney?

If you are the principal or individual who has created the POA, you have the legal ability to revoke it if and when you wish to do so. Revoking a power of attorney is simply ending the legal agreement that gave another person the legal authority to act on your behalf. Often the situation that required the power of attorney ends, and as a result, the legal agreement is no longer needed.

The individual named as a power of attorney, also called the agent, does not have to approve the cancellation. If you have more questions related to assigning an individual to be a power of attorney, contact Cava and Faulkner of Elk Grove, CA, by calling 916-685-1225 to schedule a free consultation. We will be happy to answer any questions that you may have and discuss your legal options.