Orange County Estate Planning

Estate Planning For Your High School Graduate

If you’re the parent of a high school graduate this year, congratulations!  You’ve put in a lot of time and effort toward their earning that diploma, and whatever their next step in life will be, you likely want to protect them just as much as you did while they were still in high school.

But before you pack that kid off to college or just an apartment across town, you need to know that when they leave, they will be taking some of the legal rights you had before they turned 18 with them. 

Once a child turns 18, they are no longer considered a child in the eyes of the law.  And you no longer have the legal right to access their health care, school or banking records without their permission.  Here are some steps you should take before your child leaves the nest that will help ensure your peace of mind and their safety:

Create an advance healthcare directive.  Once your child is officially an adult, they need to have an advance healthcare directive that will allow you to access their medical records and make medical decisions for them in case they become incapacitated.  This is essential in case of an emergency.  They will also need to sign a Health Insurance Portability and Accountability Act (HIPAA) form that allows medical professionals to share information with you. 

Create a power of attorney.  Once your child is officially an adult, you will not be able to make financial decisions for them or access any of their accounts.  In order to do so, your child must name you as their agent on a power of attorney.  The power of attorney will allow you to negotiate their apartment lease, add money to their account, and access college financial aid information among other financial tasks.

Review your own estate plan.  Now that your child is an adult, you should review your own estate plan.  Is your child emotionally and financially mature enough to be named a successor agent or trustee?  If not, does your plan need to bre revised to delay when your child recieves or controls his or her inheritance.

One of the main goals of our law practice is to help families like yours plan for the safe, successful transfer of wealth to the next generation.  Call our office today to schedule a time for us to sit down and talk about your estate plan, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security.  Our office is located in Santa Ana, CA but we serve all of California including Irvine, Orange, Tustin, Newport Beach, and Anaheim.

For more information and articles on estate planning, probate, and trust law, please visit our website and request our free monthly e-newsletter.

Intellectual Property and Selling Your Business

In every beginning there is an end, and in every planning for the beginning of your company there should also be a plan for the end. Whether all goes well or all goes south, how does your business fit into your plan and how might it fit into your overall assets or estate? That is a heady issue, but increasingly in this information economy the most vital aspect is intellectual property.

Have you planned to structure the sale of both your business and your intellectual property? To what degree are the products of your company products of an intellectual property? Who owns the property, you or the company? Just as likely, is it possible that a previous employer has claim to your intellectual property?

Heed some advice given in a recent Forbes article titled “Start With The End In Mind: Four Must-Dos For Intellectual Property.”

The simple fact is that with a personal business, so much of your own life – your blood, sweat, tears and ideas – go into the business. Accordingly, that planning for the business is truly a bit of life planning for yourself.

So how can you protect your intellectual property and what is your property in the first place? And, if you are already at the point of sale, how do you go about protecting and valuing that intellectual property?

One of the main goals of our law practice is to help families like yours plan for the safe, successful transfer of wealth to the next generation.  Call our office today to schedule a time for us to sit down and talk about your estate and business succession plans, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security.  Our office is located in Santa Ana, CA but we serve all of California including Irvine, Orange, Tustin, Newport Beach, and Anaheim.

For more information and articles on estate planning, probate, and trust law, please visit our website and request our free monthly e-newsletter.

 Reference:  Forbes (June 9, 2014) “Start With The End In Mind: Four Must-Dos For Intellectual Property”

Planning your estate so your children still talk after your death

When planning for the estate, and for who should get what, there is an undeniable element of self-expression. Sometimes this is a direct mode of expression, whether of appreciation for a person or an extolling of virtues, and so written large in your estate plan. Other times, and especially as a family-loving person, you express yourself far more subtly by ensuring that your heirs and the entire family can come together even after your passing and that no fight is to break out with regard to the inheritances you leave. You want them to be happy together, but you will settle for just ensuring that they can and do still talk to one another.

Estate planning for the entire family is a difficult balancing act. It can take a good deal of thought, but is well worth the effort. Forbes recently offered a bit of wisdom on the topic and a goal too: “How To Make Sure Your Children Keep Speaking To Each Other After You Die.”

Inheritance is often conceived as the tool to ultimately show your favorites or to spurn your less-loved family members. Of course, this is something of a Victorian fascination (and an age-old scandal that makes for good drama) than a life-goal commonly shared by those planning their estates. Nonetheless, the thought is out there and the anxiety as well.

Inheritances can become charged whether you want them to or not. Keeping the family talking after you are gone, or as a loving unit no less, can mean a number of things within the peculiar context of each individual family. More often than not, communication is key. So, how do you intend to keep the peace? Have you planned accordingly already?

One of the main goals of our law practice is to help families like yours plan for the safe, successful transfer of wealth to the next generation.  Call our office today to schedule a time for us to sit down and talk about your estate plan, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security.  Our office is located in Santa Ana, CA but we serve all of California including Irvine, Orange, Tustin, Newport Beach, and Anaheim.

For more information and articles on estate planning, probate, and trust law, please visit our website and request our free monthly e-newsletter.

 Reference: Forbes (June 4, 2014) “How To Make Sure Your Children Keep Speaking To Each Other After You Die”

Trusts as IRA and 401(k) Beneficiaries?

When it comes to planning for the estate and all of your various accounts and various beneficiary designations, it is important to ensure that you have updated your beneficiary designations and that you have elected the most efficient beneficiaries in the first place. It is not about which heir is best with economics; if you are electing a trust as a beneficiary to an IRA or other retirement account it is simply not the same as electing one of your heirs. It is an important difference to understand.

The confusion between IRA beneficiaries, trust beneficiaries, and IRA trusts by way of IRA beneficiaries is a common confusion, but one that may end up costing your estate and heirs. The Slott Report took up the charge recently and offered a definitive answer worth consideration for those hoping to mix their trusts and IRA.

The question (and article): “How Many Beneficiaries Are There With a Trust?”

The Answer? Just one: the trust. Even if there are 20 beneficiaries to the trust there is just the one beneficiary to the IRA - and that is the trust.

The difference comes out in the balance and the math at the end. Naming a trust as beneficiary can seem like or even be an easy way to spread an IRA amongst the heirs you have already chosen to be beneficiaries of the trust. It is not the same thing, however, and that may affect the usefulness of the IRA. After all, IRAs can make for uniquely useful bequests because they can be stretched out over the life of the inheritor, but when the trust is the beneficiary the math changes entirely. How? It is the eldest beneficiary that determines the age.

How and when distributions happen is, further, at the discretion of the trustee rather than the would-be IRA owner. Sometimes this multi-tiered approach can work for a family, but more often than not it is not understood before the papers are signed and only dealt with after the fact.

Always consult your attorney when considering the trust, its assets, and any time you might wish to elect the trust as a beneficiary to this account or the other.

One of the main goals of our law practice is to help families like yours plan for the safe, successful transfer of wealth to the next generation.  Call our office today to schedule a time for us to sit down and talk about your estate plan, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security.  Our office is located in Santa Ana, CA but we serve all of California including Irvine, Orange, Tustin, Newport Beach, and Anaheim.

For more information and articles on estate planning, probate, and trust law, please visit our website and request our free monthly e-newsletter.

Reference: The Slott Report (May 30, 2014) “How Many Beneficiaries Are There With a Trust?”

What is your Art worth?

Art is gauged by two entirely different and often mutually-exclusive vantage points. There is the subjective eye of the beholder that gauges beauty, and then there is the no less subjective eye of the market, the appraiser and/or the taxman. In planning for your estate, your heirs can adopt the eye of the beholder but it is necessary for you to see through the eyes of the taxman. Be sure to properly plan for your artworks and ensure that they are appropriately (if usefully) valued, as seen through the eyes of the taxman.

The issue of valuation is always the issue at stake when it comes to taxes – be it with regard to real property, stocks, or something as mercurial as an easement – but with art there is both a special importance and a special irony. After all, art is only truly valuable when it is priceless, in one sense, but there is nothing that is priceless on the market.

For perspective on the issues and even some practical advice there is much to be gleaned from a recent article in Mondaq titled “Valuing Artwork For Federal Taxation Purposes: Income, Estate & Gift Tax Issues.”

As anyone with a sizeable art collection will quickly understand, the value placed on a piece of art is, in the first instance, entirely based on the market’s whim and, in the second instance, every valuation is both a blessing and a curse. A high valuation leads to high prices for sale and, just as important, a high deduction when donated to charity. A low valuation, on the other hand, can make a piece of art cut that much less against estate and/or gift taxes. It is really hard to say which value you will want and when. That is a dynamic the IRS is well attuned to, so when it comes to finally pegging a value it is vital to have a reasonable valuation of the “fair market value.”

Admittedly, it is a tricky topic and after reading the original article you will agree that it is a good idea to review your own collection and plans. So, what about your art collection? Will it pass the taxman’s tests or will it be a flaw in the estate plan?

One of the main goals of our law practice is to help families like yours plan for the safe, successful transfer of wealth to the next generation.  Call our office today to schedule a time for us to sit down and talk about your estate plan, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security.  Our office is located in Santa Ana, CA but we serve all of California including Irvine, Orange, Tustin, Newport Beach, and Anaheim.

For more information and articles on estate planning, probate, and trust law, please visit our website and request our free monthly e-newsletter.

Reference: Mondaq (June 3, 2014) “Valuing Artwork For Federal Taxation Purposes: Income, Estate & Gift Tax Issues”

Is Your Castle Built on Sand - Who Will Be Your Trustee?

You can build the greatest and strongest castle in all the land. However, if you leave it to a guard who forgets to lock the gate, then those strong walls won’t do you much good. Trusts work pretty much the same way. Even the most carefully crafted trust is hobbled, counterproductive or even broken by leaving the wrong trustee in charge. How do you make sure you leave the trust in the right hands?

Picking a trustee can be a very difficult task. It is not the same as crafting words to paper – ink is cheap in a certain sense – because picking a trustee means picking the right person. You have to read people well and know the right people (or financial institutions) to pick. Financial Planning recently offered a few principals well worth mulling over if you’re in the process of creating a trust in an article titled “Selecting a Trustee? 3 Factors to Consider.”

Factors one and two are useful foils: “think twice before naming children” and “consider using a professional.”

There are definite trade-offs to read into this because a family member turned trustee is certainly wedded to the project and the well-being of the family. On the other hand, a professional is detached. Of course, a professional is detached for good reason. Depending upon the complexity of the assets in a trust, correctly managing them can require a special skillset. Finally, and regardless who you put in charge, remember that the trust itself can always be built to include a power to remove a trustee. Depending upon whom you choose and who your beneficiaries are, this may be more and more important to strengthen, either to protect the trustee or to ensure that the trustee can be kicked out.

Finding a trustee is always a bit of a balancing act, but it is a necessary one. The purpose of the trust itself is to ensure there is a legal device carrying out your wishes, to hold your assets and protect your beneficiaries as you would do so yourself. So when you build the castle, with whom will you leave the keys?

One of the main goals of our law practice is to help families like yours plan for the safe, successful transfer of wealth to the next generation.  Call our office today to schedule a time for us to sit down and talk about your estate plan, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security.  Our office is located in Santa Ana, CA but we serve all of California including Irvine, Orange, Tustin, Newport Beach, and Anaheim.

For more information and articles on estate planning, probate, and trust law, please visit our website and request our free monthly e-newsletter.

Reference: Financial Planning (May 29, 2014) “Selecting a Trustee? 3 Factors to Consider”

Planning for Your Special Needs Child

Caring for your child with special needs requires much more thought and planning. After all, you are responsible to ensure the well-being of your child in a world without you.  

How can you possibly ensure for the future of your children, especially when they have certain dependencies? CNBC recently touched on this topic offering up a solution - the special needs trust. If this topic touches you and someone you love, then take a moment to read the original article titled “Special needs trusts: Helping parents provide for kids' futures.”

Trusts are powerful legal devices made to do what you program them to do, all under the watchful gaze of a responsible trustee. The needs of a child with special needs are especially amenable to special planning. You can’t leave your assets to them outright, as your child is likely unable to use them. In fact, just owning them might endanger their government assistance.

Sure, money could be left to another child or other loved one with express instructions to care for the special needs child. However, without formalization, it’s never guaranteed that the money will be used for this purpose. Instead, that money would be open to the other individual’s liabilities, suits, divorces, and other legal pitfalls. The special needs trust solves all of this in a very tidy way and even ensures that there is always a financial guardian of sorts in the trustee.

Why do you need to leave assets to your child with special needs in the first place? After all, they will be receiving government assistance, right? This depends greatly upon the nature of the care needed, of course. But as many parents can already attest, those government benefits can only take you so far and even sometimes force decisions.

Your special needs trust can care for them without any benefits, if your have the means of course. In reality the express goal of a special needs trust is to bridge the gaps and protect all aspects of their life and longevity. Just what kind of a trust you can put together and what kind of needs you have to fulfill depends on your finances and your child. Regardless, the trust needs to be drafted by a steady hand and a careful mind.

Competent counsel can knit together the plan, the ability and the needs in light of current (and even future) laws and regulations to provide for a loved one’s care. In the end, that’s not just peace of mind now, but the assurance of a happy life for your loved ones who cannot take care of themselves.

One of the main goals of our law practice is to help families like yours plan for the safe, successful transfer of wealth to the next generation.  Call our office today to schedule a time for us to sit down and talk about your estate plan, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security.  Our office is located in Santa Ana, CA but we serve all of California including Irvine, Orange, Tustin, Newport Beach, and Anaheim.

For more information and articles on estate planning, probate, and trust law, please visit our website and request our free monthly e-newsletter.

Reference: CNBC (May 31, 2014) “Special needs trusts: Helping parents provide for kids' futures”

Estate Planning For The Childless

Estate planning can be difficult. If you have no spouse or children, this can compound the dilemma. How do you plan when there is no one for whom to plan? For an increasing portion of the population there are no direct descendants.

Reuter’s summarized the issues in a recent article titled “Estate planning for the young, rich and childless.” It’s in one sense a case of there being no easy or automatic options. This means that the sky is the limit. The other side of the coin, however, is that there also is much room for option paralysis. For most, the most rewarding decision is to find a way to give back to the community and to the causes about which you care most through charitable giving.

This is not simply a niche issue, either. According to statistics, there are over 17 million unmarried Americans over the age of 65 who will experience this tricky position. And it is not just an issue for retirees or those of a certain age. You are childless until you have children, so even the young have to address this in their own planning. After all, estate planning is also not an age-driven activity. Be sure to meet with an experienced estate planning attorney to help you navigate your options and make adjustments as your situation changes.

One of the main goals of our law practice is to help families like yours plan for the safe, successful transfer of wealth to the next generation.  Call our office today to schedule a time for us to sit down and talk about your estate plan, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security.  Our office is located in Santa Ana, CA but we serve all of California including Irvine, Orange, Tustin, Newport Beach, and Anaheim.

For more information and articles on estate planning, probate, and trust law, please visit our website and request our free monthly e-newsletter.

Reference: Reuters (June 2, 2014) “Estate planning for the young, rich and childless”

Dementia and Family Finances: the Glass Half Empty and the Need for Planning Early

Dementia is an unfortunate and pernicious affliction. Unfortunately, it is one that will afflict the majority of households at some point. Because it is so real a possibility to face, it is one better faced sooner rather than later. Proper planning can reduce the inevitable stress on all concerned.

The issue of dementia in planning was recently addressed by MarketWatch in article titled “Stunning study on dementia, couples and money.” The results of the study mentioned are multifaceted. However, there is one obvious data point upon which the article rotates - the vast majority of households turn over financial control to the unimpaired spouse once the original leader of family finances shows signs of dementia. Unfortunately, dementia doesn’t work that way; it’s far too subtle. This means that many households may have waited too long, and then the unimpaired spouse is left to learn all of the finances and pick up any broken pieces from a spouse who may be unable to fully account for it all. That is a glass half empty, unfortunately.

So how do you fight against so subtle an affliction and a tide of impairment affecting (as far as we can tell) fully 22% of Americans over the age of 71? You plan early and spouses plan together. In fact, there is much to do and it is all about starting early. The original article, as it happens, also offers a helpful bit of wisdom with five practical tips.

Are you an adult child working to assist your aging parents? Then some of these tips are critical to share with your parents sooner rather than later.

One of the main goals of our law practice is to help families like yours plan for the safe, successful transfer of wealth to the next generation.  Call our office today to schedule a time for us to sit down and talk about your estate plan, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security.  Our office is located in Santa Ana, CA but we serve all of California including Irvine, Orange, Tustin, Newport Beach, and Anaheim.

For more information and articles on estate planning, probate, and trust law, please visit our website and request our free monthly e-newsletter.

Reference: MarketWatch (June 2, 2014) “Stunning study on dementia, couples and money”

Will your genetic material yield heirs after your death?

The illegitimate child who emerges from obscurity to claim a family inheritance is a staple of Victorian melodrama. Today, some families are grappling with a 21st-century twist on that narrative—one where the child is conceived years after a parent’s death, with the help of frozen sperm or eggs.

You might say that planning for your estate is about tying together all of the loose ends of your life. That’s always been easier said than done. However, it seems with every passing generation our lives get that much more complicated. Medicine, especially fertility medicine, continues to baffle the legal system. The perfect example of that is posthumous progeny (how is that even a phrase?) through cryogenics, in vitro fertilization, and entirely understandable timing. It’s been in the news before, but MarketWatch recently took up the topic in an article titled “Your frozen sperm could inherit your estate.”

Inheritance, unless you plan otherwise, legally flows from generation to generation or simply the closest kin in lieu of that next generation. It’s an age-old concept and logically follows the nature of human reproduction. On the other hand, that can get pretty complicated when we stop reproducing as they always have (as in only the ways they could) in ages past.

Artificial insemination is a different concept entirely, and there are enough legal battles just beginning to prove how murky it can become (think child-support for a sperm donor.) Artificial insemination plus cryogenic preservation of sperm/egg samples gives rise to the possibility that the father need not be alive when his children are born, and not by a short time frame either. Moreover, that’s expressly the point with so many couples. Many preserve genetic materials so that they can ensure for future children, say before going into military service or before starting an invasive medical regimen like chemotherapy.

The everyday has subtly begun to incorporate these new medical advances well before the legal system has had a chance to take it all in. That means you have to be all the more aware of these new loose ends of your life as you set about to plan for your estate. If you’ve preserved or donated genetic material, it’s a topic worth thinking about.

One of the main goals of our law practice is to help families like yours plan for the safe, successful transfer of wealth to the next generation.  Call our office today to schedule a time for us to sit down and talk about your estate plan, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security.  Our office is located in Santa Ana, CA but we serve all of California including Irvine, Orange, Tustin, Newport Beach, and Anaheim.

For more information and articles on estate planning, probate, and trust law, please visit our website and request our free monthly e-newsletter.

Reference: MarketWatch (May 30, 2014) “Your frozen sperm could inherit your estate”