Orange County Estate Planning

How to Ensure Your Pets Are Protected and Well-Cared For in the Event of Your Death or Incapacity

If you have pets, you probably want to make sure they are well-taken care of, if anything happens to you. Unfortunately, wishing for their good fortune isn’t enough. Too many animals are abandoned when their owners die and face rehoming, life in an animal shelter, or worse.

To make sure your furry friend is taken care of when you become incapacitated or upon your death, you can leave assets for their care and custody. The best way to leave your faithful companion assets is to set up a pet trust.

With a pet trust, you can create certain rules for how the trust’s funds can be used. You can name a trustee—the person who will control and manage the funds—and a caregiver for your pet. By having a trustee manage the funds, you can be ensured the caregiver will only benefit from them if they are used according to the rules of the trust.

Another way people leave money and instructions for the care of their pets is with a will. But wills cannot ensure the funds are used in the way you want them to be, nor do they ensure the caregiver will care for your pet. A person who is left a pet in a will can turn around and leave the pet at a shelter and pocket the money left to them for their own use instead.

Leaving your pet assets is easy with a pet trust. But trust creation can be complicated, and working with a lawyer to develop the terms of the trust is highly recommended.

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.

Pay For a Loved One’s Education With an Education Trust Fund

Today’s parents are all too familiar with the budget-busting cost of funding a child’s college education. It can be challenging enough to put aside sufficient savings for a single child’s education, but for multiple kids, the price tag can make donating a kidney for extra cash seem downright reasonable!

In fact, a survey by The College Board found that the “moderate” cost for all expenses (tuition, fees, books, room and board) for a year of in-state public college averaged $24,610 in 2016-2017. A similarly moderate budget for a private college averaged $49,320.

But don’t freak out just yet! If you’re savvy about estate planning, you can use an education trust fund to save for your child or grandchild’s education expenses and specify exactly how you want those funds used.

You can create an education trust that is payable during your lifetime (living trust) or upon your death (testamentary trust). The disbursements from the trust are designated for a beneficiary's education, and you can specifically designate how and when the funds are to be distributed—meaning the beneficiary can only receive the funds if they’re compliant with your terms.

Education trusts can be used to fund not only a traditional university education, but any type of  learning institution, such as trade schools, educational workshops, community colleges, and private academies. Or even alternative education, such as travel, workshops, retreats, business building programs, and the like. You get to decide exactly how broad or how limited the use of the funds can be.

Trusts can be created for multiple beneficiaries, whether through separate trusts for each individual or a single trust that funds all beneficiaries. If a single trust is established for multiple beneficiaries, you can require the assets to be distributed in a number of ways: equally, using a set amount, by percentage, or the decision as to how much each beneficiary receives can be left to the trustee’s discretion.  

 If you’re interested in funding your children’s or grandchildren’s education using an education trust, we can walk you step-by-step through the process.

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.

 

Planning Pays Off: An Illustrative Look at Carrie Fisher’s Semi-Failed Estate Plan

Whether your estate is modest or movie star worthy, the value of a good estate plan, properly handled, cannot be underestimated. A comprehensive plan can mean the difference between an expensive and unnecessary “time spent in court headache” for your loved ones or an easy “in your lawyer’s office” transition that allows your family time to grieve in peace.

When a high profile celebrity passes away, we can learn a lot about the value of careful planning when using their estate plan as a case study.

Carrie Fisher is one of the celebrities whose proactive, yet faulty, planning gives us an excellent example to illustrate some key points that are important for you to understand for your family.

Even though Carrie Fisher worked with some of the best (read: most expensive) lawyers in Los Angeles, and she had created a trust to hold her assets, her estate plan failed, in our opinion, because it didn’t keep her assets out of court and passing privately to her heir, Billie Catherine Lourd.

Instead, Fisher’s lawyer created a Trust, and never ensured Fisher’s assets were transferred into the Trust. And while you may think this is malpractice on the lawyer’s part, it’s actually common practice.

We see this all the time when clients come to us with prior prepared estate plans -- they’ve got beautiful documents that will not work when their families need them because their assets were never properly inventoried and transferred.

Fisher’s death brings this major issue in estate planning to light. As a result, Fisher’s Trustee, Dennis King, had to file a petition in probate court seeking to have Fisher’s assets transferred into her Trust.

The whole point of creating a Trust is to keep your family out of court and keep your affairs totally private.

Because Fisher’s Trust was not properly funded (the legal terminology for making sure your assets are transferred into Trust so you can keep everything private and out of court), all of her assets and who will receive them have been made public.

As a result, we know that Fisher left her estate to her daughter, Billie Lourd, and that it included cash accounts, several LLCs, real estate, a life insurance policy, personal belongings, and intellectual property rights. Having this information public leaves Lourd at risk. Unscrupulous parties now have access to details they wouldn’t otherwise know.

This is exactly why a key part of our planning process is a thorough inventory of your assets, ensuring your assets are transferred into your trust (if you choose to keep your family out of court) and then a review of your assets and planning documents at least every three years, if not annually.

Proper estate planning can keep your family out of court and  save your family precious time and money in the process. If you’re ready to create a comprehensive estate plan, start by sitting down with us. And, if you already have a plan in place, contact us to have it reviewed.

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.

 

Could an Out of Date Will Leave You Facing Eviction?

It’s all too common, but unfortunately the way some lawyers handle their clients’ estate plans create more problems than solutions for future generations.

It’s critical that you understand exactly what will happen after you become incapacitated or when you die, to ensure that the people you love don’t end up cleaning up an estate planning nightmare while also grieving your passing.

Recently in Columbus, Ohio, a mom of four kids is not only grieving the death of her mother, but now also facing eviction from her home.

Here’s how it happened: Grandma signed a will in mid-2015 putting all of her assets in trust for the education of her six grandchildren. She indicated that her local bank should manage those assets for the benefit of the education of those grandchildren. That seems like a great thing to do, right?

Right. Except that then in 2016, Grandma then bought a home for one of her daughters and her daughter’s four children. And she didn’t update her will.

Unfortunately, this oversight is far too common due to the way many lawyers serve their clients. Their estate plans are often just focused on the documents and the one-time transaction, rather than ensuring they work with their clients on an ongoing basis, updating those documents each time life changes or asset changes occur.

So now, the daughter that is living in the house with her four children is being evicted. The bank was tasked with providing for the education of the children, so the bank is now selling the house with the intention of putting the money in trust for their education. Then, when they turn 21, they will get a distribution of whatever is left.

It’s hard to imagine that Grandma would have wanted this outcome for her daughter and four of her grandchildren. But without a clear plan that documents Grandma’s wishes, which could have included her daughter paying rent to the trust account for the benefit of all the grandchildren, the bank is within its right to evict the daughter and the four grandkids.

It’s a sad, sad tale. And one that could have been easily avoided if Grandma’s lawyer had foreseen the potential issues  and supported grandma to update her will.

When is the last time you had your estate plan reviewed? Have you developed a relationship with a trusted lawyer who you feel confident has your back and will make sure that your kids aren’t facing eviction or some other unexpected mess after your incapacity or death? If not, now is the time.

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.

 

Accident or Illness Always Possible - Do you have an estate plan in place?

There are no age requirements for disabling accidents or illnesses, so it would be wise for everyone to plan for what would happen if they were to be incapacitated. It is not difficult, according to TC Palm in "Be as prepared as you can by planning for incapacity."

To get started, schedule an appointment with an estate planning attorney. The attorney can prepare the necessary documents for incapacity.

You will need a general durable power of attorney so someone else has the authority to handle your day-to-day finances. A health care power of attorney will allow someone else to make your health care decisions and let you decide ahead of time what medical means can be taken to prolong your life.

An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances now and preparing for possible circumstances in the future.  Your plan may consist of only a will or the addition of one ore more trusts.  Your plan will reflect your assets and your goals for when you become incapacitated and distribution at death.

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: TC Palm (Feb. 20, 2018) "Be as prepared as you can by planning for incapacity."

The Downsizing Generation: How to Handle a Surplus of Stuff When a Loved One Ages

As the baby boomer generation ages—and downsizes—more and more adult children will be tasked with going through their loved one’s belongings to decide what to do with everything. As more and more people downsize after retirement, china sets, furniture, heirlooms, and other belongings are often left behind and unwanted.

Traditionally, these items have been passed down to the next generation. But today, the next generation has different needs, tastes, and wants. As a result, there is a surplus of “stuff” baby boomers don’t need or have room for, and their adult children don’t want. Maybe that includes you.

This is an all too common problem with a few helpful solutions.

The thought of tossing a lifetime of belongings in the trash is more than many can bear, which explains the advent of the senior move management industry. Today, there are a plethora of professionals who can help your loved one go through each item to decide what should be kept, what should be given away, and what should go to charity or donated.

The cost of this professional service can be up to $5,000 for a large estate, but it eases the burden on the adult children and ensures the loved one’s wishes are listened to and honored.

Bear in mind, as the baby boomer generation ages, charities and nonprofits that typically accept used furniture and other belongings are faced with the burden of too much stuff. The dated styles baby boomers preferred during their prime don’t fit the tastes and needs of today’s generation. The current generation views belongings like furniture and dishes as functional and more disposable, better suited to their urban, fast-paced lives where minimalism and portability are more prized than sentimentality and tradition.

Another way to decrease the time and effort it takes to dispose of all your belongings is to be very clear about what you consider to be heirlooms and valuable items by indicating in your will, or in a separate writing ancillary to your will, exactly what’s important to you and what isn’t.

Most importantly, talk to your children or other heirs to see what they want and don’t want. And to make sure they know what’s important to you, and what isn’t. The more you can communicate about this now with your loved one’s, the better.  Some items you maybe able to give to your loved one's during your life.  You may be surprised to discover that most family fights that break up families aren’t over money at all, but over the personal property of mom and dad that the kids fight over because there was not clear instructions.

As more baby boomers age and non-profits turn away dated donations,  the need for thoughtful estate planning is greater than ever. A comprehensive estate plan can ensure your belongings either go to those who will cherish them or to charities that will benefit from them.

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.

 

Estate Planning with the New Tax Law – Although estate tax may no longer be an issue for you, probate, incapacity, and distribution of your assets is still relevant.

Forbes’ recent article, “Trusts In The Age Of Trump: Time To Re-Engineer Your Estate Plan,” explains that the law allows $11.2 million per person to be passed to children or other non-charitable heirs, free of federal gift or estate tax.  With aggressive techniques, a couple could use their combined $22.4 million tax exemption to transfer more than a quarter-billion of assets into an irrevocable dynasty trust. That way, the wealth can continue to grow and pass, estate-tax-free, to an unlimited number of future generations.

Ask your estate planning attorney about this.  You should also have him or her review your current estate plan for traps immediately. This is because you may need to redo or scrap your plan. It is especially important, if you live in one of the 15 states that have estate and/or inheritance taxes at much lower levels of wealth than the federal government.  Thankfully, in California we have no California estate tax. 

A common mistake is a will that establishes a trust linked to an outdated federal and/or state exemption amount. An old will that leaves the "exemption amount" in a trust for children from the first marriage and the rest to the current wife means the kids' trust would get everything and his wife nothing. In a state like New York, that exempts only $5.25 million from its own estate tax, accidentally leaving the rest to the kids will incur a large state estate-tax bill.

Also, because of previously low estate tax exemption amounts, many trusts divided in two or three subtrusts on the death of the first spouse.  This method may not be necessary anymore because of the increased estate tax exemption. We recommend you review your current plan to make sure it fits your needs with the tax law changes.

It would be easy to change the will or perhaps to not have any trusts, because now there is the "portability" of exemptions between spouses. Prior to 2011, the wills of affluent couples typically created what's known as a "credit shelter" or "bypass" trust. When the first spouse (assume it's the husband) died, an amount equal to his estate-tax exemption went into a trust for his wife and kids. She would have access to trust income and, if necessary, principal.  However, his exemption wouldn't be wasted. When the wife died, the trust assets wouldn't be part of her estate. Now, with portability, any unused portion of the husband's exemption passes to his widow, provided the executor of the husband's estate files a tax return electing portability.

Avoiding capital gains tax may be a reason to skip a trust. When someone dies, the assets in his or her estate (including real estate, collectibles, stocks and mutual funds that aren't held in a retirement account) get a step-up in basis to their current value. That means heirs can sell immediately without owing capital gains tax. If the husband's assets are left directly to his wife, they get one step-up at his death and another at hers.  However, assets in a traditional credit shelter trust don’t get that second step-up at her death.

Ask your estate planning attorney about this, if you already have one of these trusts. Assets held in an irrevocable trust of the deceased husband that have appreciated since the husband's death can be distributed—in lieu of cash—to the widow. If she holds them until her own death, they'll get another step-up.

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 (February 13, 2018) “Trusts In The Age Of Trump: Time To Re-Engineer Your Estate Plan”

Recently Divorced or Getting Divorced – Now is the time to update your estate plan or create one!

Negotiating a divorce settlement can be a real chore. In addition, with a contentious, financially-complex divorce, the process can take months or even years.

Forbes recently published an article, “A Checklist To Help You Manage Post-Divorce Finances.” According to the article, many women are disappointed to learn that all their divorce-related financial troubles aren’t neatly resolved, when their ex signs the settlement documents.

 It is true that your agreement will say exactly what must be divided and how much goes to whom.  However, you’ll need to work through the practical details of how the agreement is implemented.

Some of the post-divorce financial matters you’ll face, like changing your name, address, and emergency contact, are simple enough. You only need a copy of your divorce decree.  However, other issues can be more complex and serious.

If you haven’t done so already, you should take care of the following:

• Watch your credit and cancel any joint credit cards. You should establish credit in your name alone;
• Disinherit your ex. See your estate planning attorney to make changes to legal documents;
• Change beneficiary designations on your insurance policies, retirement accounts, pensions, trusts, and annuities;
• Sell or refinance the marital home. You may agree to sell it, with the proceeds divided between you, or if you are keeping the home, refinance the mortgage in your name alone.

To avoid post-divorce financial trouble, you and your ex, through your attorneys, should draft an action plan that details what steps you will each take with deadlines to enact your settlement agreement. In California, a restraining order goes into effect limiting some estate plan until the divorce is finalized.  Review with your family law attorney the limitations prior to filing for divorce.

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 (February 12, 2018) “A Checklist To Help You Manage Post-Divorce Finances”

What Is the Best Way to Treat Children Equally in Your Estate Plan?

Varying degrees of financial responsibility by children can be a challenge to creating an estate plan, according to Market Watch in "My son is responsible, my daughter is in debt -- how do I split my estate?"

A common way to meet the challenge, if financial responsibility isn’t the same among the children, is to create an estate plan that limits how the assets can be used. Provisions can be written into a trust, so an irresponsible child cannot waste any money received on frivolous things. This is unlikely to offend any responsible children, if they use the money in reasonable ways.

An estate planning attorney can advise you on creating an estate plan that fits the unique circumstances of your family. Also, you don't have to treat your children equally if you don't want to.  It's your plan and your assets so they can be designed any way you choose.  Sometimes there are reasons children are treated differently such as substantial lifetime gifts, special needs of a beneficiary, or family relations.  We will meet you where you are.

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: Market Watch (Feb. 16, 2018) "My son is responsible, my daughter is in debt -- how do I split my estate?"

Spring Cleaning for your Estate Plan

Have you done your spring cleaning? If you did, did you find any old Trusts, Wills and Durable Powers of Attorney that haven't been looked at since Friends was on the air? If that's the case or if you haven't done your estate planning at all, it may be time to clean up your estate plan whether you are married, single or in a same sex relationship.

Q: Why should a person's estate plan be updated from time to time?

A: Laws change, your assets change, your situation changes. What was     right in 1995, may not work at all today. Let's say you name your     spouse then your mother as your Executor because your kids are minors at the time. Now, your mother may be deceased     and there is no successor executor. Worse, what if you have named your brother as the beneficiary of your estate when     you didn't have kids and now he inherits the whole estate. Just like we update other parts of our lives, we need to update     our Wills.

Q: What if I don't have a Will? Won't everything end up with my next of kin anyway?

A: California law does provide that your nearest next of kin inherit, but without a properly drafted Will (or Trust if your     estate is greater then $150,000), it may take longer and be harder for them to inherit because the administrator (similar to     an executor, but an executor has to be nominated by a Will) will have to ask the court's permission before handling a     number of things -such as selling the home.  To avoid probate all together we recommend a trust to dispose of your     assets.

Q: Is it just my Will I need to think about?

A: No. The Will handles your estate when you die, but estate planning refers to more than just death. As mentioned     previously, you can avoid probate if you have a will.  What happens if you become incompetent and cannot make     medical decisions or pay your bills? That's where a Durable Financial Power of Attorney and an Advance Health Care     Directive come in. The Durable Financial Power of Attorney allows you to appoint someone you trust to handle your     finances. An Advance Health Care Directive allows you to appoint someone to make medical decisions if you can't. No     matter how long you have lived together, without these documents if you are incompetent, someone may need to go to     court to become guardian to handle your financial and health care decisions.

Your Estate Planning is important. But there is no one size fits all. You should sit down with your attorney to discuss what you need to handle your situation.

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:   Solomon, Steiner & Peck, Ltd. All rights reserved. 

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