Orange County Estate Planning

What’s the Importance of Having a Financial Power of Attorney?

WMUR’s recent article, “Why you need a financial durable power of attorney” explains that a power of attorney is a legal document that allows another individual (your agent) or financial institution to conduct financial transactions for you, if you’re unable to do so. Without a POA, your family will likely need to petition the court make these decisions on your behalf.

Whether you’re young, elderly, single or married, it’s a good idea for everyone to have a power of attorney. For married couples, while your spouse can usually take care of the basic finances, many financial transactions require both spouses’ signatures. For those assets in your name only, your spouse will have no access.

One type of financial power of attorney is a durable power of attorney, which becomes effective upon signing and stays in effect through any incapacity and until your death—unless you revoke it. This POA typically lets the agent perform a wide range of financial transactions on your behalf. If you don’t designate that your power is “durable,” it may automatically end, if you become incapacitated.

Another type of power of attorney is a “springing” power of attorney, and it usually doesn’t become effective unless specific conditions are met. Typically, a physician must certify that you’ve become incapacitated. This POA lets you to control your affairs, unless and until you can’t do so.

Work with an experienced estate planning attorney to draft the power of attorney. This document is usually created as part of your overall estate planning. Note that it’s not the same as a medical power of attorney. That document gives your agent authority for medical, not financial decisions. To be fully effective, these POAs must comply with state laws, which can vary from state to state.

The typical powers granted to your attorney-in-fact or agent, are to use your assets to pay your normal expenses, collect Social Security, invest your money, handle banking transactions, gain access to your safe deposit box, manage property and watch over your retirement accounts. Aside from granting broad powers, the POA must be specific about certain rights granted to the agent. For example, the grantor gives an agent the right to make gifts on behalf of the grantor or the right to complete and file your tax returns.

Your attorney may also hold the POA for you pending release, if you should become incapacitated.  It is important to make certain to periodically review your documents and your estate plan, so that it reflects your current situation and goals.

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 monthly e-newsletter.

Reference: WMUR (May 23, 2019) “Why you need a financial durable power of attorney”

No More Reasons for Delay in Implementing These 5 Estate Planning Essentials

There is simply no reason for anyone to delay in implementing these five estate-planning essentials:

 Will.  Look around you right now.  Everything you see has to be distributed in the event of your death.  Your Will names the person you want to handle it all and can also indicate who you want to receive it all.  If you don’t have a Will, a Judge decides who is in charge of your affairs and State law provides who receives everything you own.  Take control now by getting your Will in place today.

 Guardian Nomination for Minor Children.  If you have minor children at home, you need a comprehensive set of documents to ensure they are taken care of by the people you want, in the way you want, no matter what.  Not just for the long-term, but also in the immediate term if and when something happens to you.  A guardian nomination does just that. 

Advance Medical Directive.  Also known as a health care directive, durable power of attorney for healthcare or living will, this document provides the legal right for the person of your choice (your representative) to make healthcare decisions for you in case you become incapacitated and unable to make those decisions for yourself.  Plus, it also lets that person know HOW you want decisions to be made if you cannot make them for yourself.  Without an Advance Medical Directive in place, your family could have their hands tied when it comes to ensuring you get the best care possible, in the way you would want.

Power of Attorney.  In the event you cannot communicate, your Power of Attorney will allow your family to gain access to your financial accounts so they can pay your bills and manage your financial affairs.  Without this in place, they’ll face an expensive, long, and public court process to take matters into their hands.  Don’t leave your family in that position, handle this today.

Trust.  If you own any property that would go through the probate process (a home, bank accounts, brokerage accounts, business assets, investment real estate, and other investment assets), you’ll want to make sure to have a Trust set up as soon as possible so your family isn’t stuck dealing with an expensive, unnecessary, long, and totally public Court process in the event of your death.  A revocable living trust puts the people you know, love and trust in control without having to go to Court. 

If you’re ready to do the right thing by your family, call our office today to schedule a time for us to sit down and talk.  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.  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.

5 Reasons Why You Need to Review Your Estate Plan

Creating an estate plan to protect your financial future and that of your family is just the first step in the estate planning process.  Once those documents are executed, you will still need to review your plan annually to ensure it continues to reflect your needs and achieve your goals.  Here are 5 reasons that can trigger the need to review your existing estate plan:

Family changes.  Marriage, divorce, birth, and death are four family changes that should prompt an estate plan review.  If one of your beneficiaries dies, you will need to remove them from your estate plan.  A new child or grandchild means adding beneficiaries.  If your daughter gets a divorce, you will likely want to remove her ex from your estate plan but keep their children in.  These circumstances can also trigger changes to those people designated as guardians, executors, or health care agents.

Health changes.  The state of your own health may dictate changes to your estate plan, especially when it comes to long-term care.  You may want to help a family member who has no other resources for long-term care, or if you yourself suddenly need long-term care, you may need to provide a trustee with new instructions on the kind of care you want - i.e., staying at home with in-home help or paying to live in a senior living facility.

Work changes.  You may suddenly want - or need - to retire, which could necessitate withdrawing from your IRA funds to support yourself instead of contributing more.  If you have a family business, you may want to sell it or convert a sole proprietorship into an LLC or corporation, which could mean a significant change for your estate plan.

Market changes.  If the total value of your estate has fluctuated by more or less than 20 percent, this should prompt an estate plan review.  A significant gain could provide you with assets you may want to gift to children or grandchildren to reduce or remove estate taxes.

Law changes.  Tax law changes all the time, so reviewing your plan at least once a year is the best way to either take advantage of any new changes that could benefit you, or revise your plan so these changes do not adversely impact your estate.

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.

What Women Need to Know About Estate Planning

Women outlive men, make less during their careers, and have less in savings due to pay discrepancies and time taken out of the workforce to raise their families. 

These are just a few reasons why it is important for you to know the following about estate planning:

Minor children can be legally protected with a guardian nomination, which provides parents with important legal tools to name short- and long-term guardians, provide instructions and guidelines for those guardians and execute medical powers of attorney that allow you to dictate medical care for your minor children in case they are injured and you are not with them.

A will and a living trust are both essential estate planning tools, and although both can be used to transfer assets upon death, they serve separate purposes.  A living trust can take effect while you are alive or after death.  It allows you to hold assets for your benefit during your life, which may prove useful if you become incapacitated in the future.  A living will can also be beneficial if you own real estate in another state.  A will only takes effect upon death, and is used to appoint guardians for minor children, cover assets that are not part of a living trust and create trusts that kick in after death.

Women need to execute financial and healthcare durable powers of attorney and consider choosing a member of the family if that person is willing to assume the responsibility of making financial and/or medical decisions on your behalf in case of incapacity.  And, if you are married or partnered, make sure your spouse or partner does the same because you’ll be the one who is handling things if anything happens to your spouse/partner and you want it to be as easy as possible.

Make sure your partner/spouse has life insurance to support you for as long as you will need support and that there’s enough to last your whole lifetime, unless you will have your own savings.

Don’t own your own life insurance policy as the proceeds will be subject to estate tax after you die.  Instead, if your life insurance is designed to pay estate taxes, designate a spouse or other family member as owner or set up an irrevocable life insurance trust (ILIT), which buys the policy and holds the proceeds for beneficiaries.  And again, if you have a taxable estate, make sure the same is set up for your spouse’s life insurance.

Keep beneficiary forms for retirement accounts (IRAs, 401(k)s, etc.) up to date, as they determine who receives the assets of each one of your accounts. 

Make sure there is enough cash held in a joint account to handle any immediate expenses if your spouse dies suddenly.  You may not be able to access a deceased spouse’s separate bank account right away.

Surviving spouses are allowed to add the unused portion of a deceased spouse’s estate tax exclusion to their own – which means the surviving spouse can have an estate tax exclusion of up to $11,200,000 million in 2018.  However, this exclusion transfer must be claimed by the deceased spouse’s executor filing an estate tax return.  There’s other critical items that must happen when your spouse dies that can easily be overlooked.  Contact an attorney within a few weeks of your spouse’s death whether you have a sizable estate or not.

Married couples can participate in “gift splitting” during life, which means they can share each other’s $11,200,000 million lifetime gift exclusion and can each make gifts each year and give more to their children now tax-free.  We recommend you transfer as much as possible during life for many reasons.  Ask us about it.

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.

Have you Chosen the Right People to Be Your Power Of Attorney?

Next Avenue’s article, “Saying ‘No’ to Power of Attorney Duty,” says that not everyone’s cut out to be a power of attorney (POA)., There are many reasons children and others may need to say no when asked. Becoming a power of attorney is a big job. This obligation shouldn’t be entered into without great consideration. With the POA legal instrument, a person named power of attorney is referred to as the “agent” or “attorney-in-fact,” and the person on whose behalf she’s acting is the “principal.”

While there are several combinations and varieties of power of attorney, there are two common ones. General durable power of attorney, also known as power of attorney for finances, allows the named agent to act on behalf of the principal to take care of that person’s finances like banking, paying bills, or selling a house. Health care or medical power of attorney allows the agent to make health care decisions, in the event the principal is incapacitated.

A common misconception about POAs, is that people think that if they’re named as an agent on a POA, they’ll wind up owing money for the principal’s unpaid medical bills. Not so. An agent is merely acting on behalf of another person, not making themselves personally liable. However, there are other reasons a person may want to decline being named power of attorney. Ask yourself these questions, when considering whether to commit to being someone’s power of attorney:

• Can you drop everything for weeks or months and make critical medical decisions?
• Do you have the emotional strength to make hard, life-and-death decisions?
• How is the family dynamic? Do you have a sibling who’s quick to anger or who could be suspicious of your motives, when it comes to medical or financial decisions?

If you’re not up to it, and the person who appointed or plans to name you as POA is still capable, it’s best to talk directly with that person about your concerns. Be honest and let them know how you feel.

The possibility of a POA not being able to serve is highly likely, and that’s why everyone should designate successor agents. These alternates in a POA can cover the inability, or inevitability, that someone may not be able to serve.

If you really don’t want to be power of attorney, be honest with your family member and tell her, “I’m worried enough about you to tell you, that I’m not the right person.”

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 monthly e-newsletter.

Reference: Next Avenue (September 11, 2018) “Saying ‘No’ to Power of Attorney Duty”

Why Do I Need Estate Planning If I’m Not Rich?

Many people spend more time planning a vacation than they do thinking about who will inherit their assets after they pass away. Although estate planning isn’t an enjoyable activity, without it, you don’t get to direct who gets everything for which you’ve worked so hard.

Investopedia asks you to consider these four reasons why you should have an estate plan to avoid potentially devastating results for your heirs in its article “4 Reasons Estate Planning Is So Important.”

Wealth Won’t Go to Unintended Beneficiaries. Estate planning may have been once considered something only rich people needed, but that's changed. Everyone now needs to plan for when something happens to a family's breadwinner(s). The primary part of estate planning is naming heirs for your assets. Without an estate plan, the courts will decide who will receive your property.

Protection for Families With Young Children. If you are the parent of small children, you need to have a will to ensure that your children are taken care of. You can designate their guardians, if both parents die before the children turn 18. Without a will and guardianship clause, a judge will decide this important issue.

Avoid Taxes. Estate planning is also about protecting your loved ones from the IRS. Estate planning is transferring assets to your family, with an attempt to create the smallest tax burden for them as possible. A little estate planning can reduce much or even all of their federal and state estate taxes or state inheritance taxes. There are also ways to reduce the income tax beneficiaries might have to pay. However, without an estate plan, the amount your heirs will owe the government could be substantial.

No Family Fighting (or Very Little). One sibling may believe she deserves more than another. This type of fighting can turn ugly and end up in court, pitting family members against each other. However, an estate plan enables you to choose who controls your finances and assets, if you become mentally incapacitated or after you die. It also will go a long way towards settling any family conflict and ensuring that your assets are handled in the way you wanted.

To protect your assets and your loved ones when you no longer can do it, you’ll need an estate plan. Without one, your family could see large tax burdens, and the courts could say how your assets are divided, or even who will care for your children.

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 monthly e-newsletter.

Reference: Investopedia (May 25, 2018) “4 Reasons Estate Planning Is So Important”

How Do I Choose An Executor?

Are there any ramifications for making your attorney the third-party executor of you will? No, as nj.com asks and answers in its article, “Who should be executor of your will?” You’re free to choose almost anyone to be your executor. Some people choose family members, friends, business associates, or even professional fiduciaries like trust companies.

An executor is a person you name in your will or who is appointed by the court and is given the legal responsibility to address a deceased person's remaining financial obligations. An executor is responsible for paying debts and creditors, filing tax returns, paying taxes, and distributing the estate's assets, pursuant to the deceased person's wishes as stated in the will.

The individual named as an executor in a will can refuse to accept this task. A person who originally accepted the role as executor, may resign at any point in time. Therefore, it’s a good idea to name alternative executors. If you don’t, a judge will appoint a replacement executor, if your original selection says no for any reason.

Most executors typically perform their duties without payment, but they are entitled to some renumeration. The reason that most executors don't ask for compensation, is because most executors are close family members and perform their duties out of respect for their deceased loved one. The amount an executor gets paid, is usually set by state law and what a probate court decides is reasonable under the circumstances.

For larger estates, it may be wise to select a professional, such as a trust company, who is familiar with the duties and obligations of serving as an executor. This can be extremely useful, when the deceased was the owner of a business and the estate may be complicated.

Executors California get paid a statutory fee based on the gross size of the estate plus extraordinary fees if approved by the court.  The attorney representing the Executor gets paid the same statutory fee as the Executor and may also request extraordinary fees.

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: nj.com (April 16, 2018) “Who should be executor of your will?”

How to Find the Right Assisted Living Facility

For many seniors, assisted living has become an increasingly common option to remaining in their homes. An elderly individual can live in a comfortable residence, get the services that he or she requires, such as help with bathing and dressing, as well as avoid the institutionalized setting of a nursing home.

However, Consumer Reports’ recent article, “5 Steps for Choosing the Right Assisted Living Community”, says that finding the right residence can be a huge challenge.

Right off the bat, the cost is high. In 2017, the median fee for a private one-bedroom was $45,000 a year, according to Genworth, a long-term care insurer. Most residents pay out of pocket, although some qualify for Medicaid. Medicare generally does not cover long-term care services.

In addition, shortfalls in caregiving can be a problem for assisted living residents. A 2017 survey of state long-term-care ombudsmen conducted for Consumer Reports, which monitors senior living facilities nationwide, found the most common complaints dealt with understaffing and delays in response to calls for assistance. Ombudsman data show that complaints about assisted living have gone up 10% in recent years.

For families looking at into assisted living facilities for a family member, there are ways to find a facility that delivers quality care in a comfortable setting. The key is to conduct thorough research. You should begin by asking these five key questions:

1. What Kind of Care is Required? Remember that different facilities offer varying levels of care. Is there a registered nurse on staff? Without this basic level of care, your loved one might end up going to the ER more often.
2. What is the Quality of Care? Look at the residence’s licensing and inspection records, to see if there are any issues. To get a feel for the way things work, make several visits to the facility. Go for meals and during the weekends, when fewer staff are on duty. You should also talk to residents and their families about their experiences.
3. Uncover the Real Costs of the Care. Get a written list of fees and charges from the residence and be sure that they’re included in the contract. It is recommended that you hire an elder law attorney, who’s familiar with local facilities to review the terms of the contract.
4. Can Your Parent or Family Member Age in Place? Find out what scenarios might trigger a discharge, and whether you could hire private aides, if more care is required. You should also ask what assistance the facility would be able to provide, if a move is needed.
5. Is There an Advocate? When you’ve selected a residence for your parent, it’s important to have family and friends visit regularly. If you do this, you’ll quickly be able to spot any issues with care. That is critical when your family member is ill or confused and can’t advocate for herself.

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: Consumer Reports (April 16, 2018) “5 Steps for Choosing the Right Assisted Living Community”

Parents and Kids Switching Roles as Nation Ages

In many U.S. families, children and parents are going to be switching roles. As parents age, they’re becoming their own kids’ children in many ways, requiring time and care, as well as sometimes creating a financial burden, says Fox Business in the recent article, “Aging parents are the new ‘children.’”

One concern is that aging parents can lose their mental abilities. The Alzheimer’s Association says that every 65 seconds, someone in the U.S. develops the disease. It’s now the sixth-leading cause of death. This can create additional long-term care needs for parents and result in an emotional and financial burden on adult children.

Parents with physical limitations may have difficulties living independently. Therefore, you should understand your parents’ long-term plans and how they will impact you. Let’s examine some of the things you can do, as your parents go through the aging cycle.

Family Conversations. While talking to your parents about these topics now may be uncomfortable, it will save you a lot of stress, time and money in the future. Parents who want to preserve autonomy should express their wishes. Parents should discuss their healthcare wishes, the what ifs and finances now to discover what options they may have for care. It’s important that adult children understand details of their parents’ financial situations, before they’re unable to communicate due to incapacity or death.

Get the Family Affairs in Order. Create a system to help with gathering information. This should include medical histories and estate plans. Start to organize information with your parents as early as possible. Adult children should be sure that their parents have a will, a trust (or both), a durable power of attorney for property and a durable power of attorney for healthcare.

Determine Parents’ Long-Term Financial Needs. It’s extremely expensive to provide care for aging parents. Seek professional guidance to determine how much of your parent’s savings is currently allocated to pay for healthcare in retirement, not covered by Medicare. Look at long-term care insurance.

Be Involved. As parents age, look for signs of anything that might be amiss. If you aren’t near your parents physically, or perhaps need additional assistance, you may want to get someone to help you with the care management of your parents. An aging-care support person can go with your parent(s) to doctors’ visits, act as liaisons with care facilities and provide you with regular reports.

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: Fox Business (May 25, 2018) “Aging parents are the new ‘children’”

What Grade Does Your Estate Plan Get?

Many people think that having an estate plan just means drafting a will or a trust. That is not true. There’s much more to add to your estate planning to be sure that all of your assets are transferred efficiently to your heirs, when you pass away.

Investopedia’s recent article, “6 Estate Planning Must-Haves,” provides a list of items that every estate plan should have. This includes a will (and perhaps a trust), a durable power of attorney, up-to-date beneficiary designations, a letter of intent, a healthcare power of attorney and guardianship designations.

Let's take a look at each item on the list to see if you’ve left any decisions to chance.

Wills and Trusts. This should be one of the main elements of every estate plan—even if you don't have substantial assets. Wills are documents that make certain property is distributed, according to your wishes (if drafted pursuant to state laws). Some trusts also help limit estate taxes or legal issues. But this isn’t enough. The wording of these documents is extremely critical: a will or trust should be written in a way that’s consistent with the way you've bequeathed the assets that pass outside of the will.  In California, if the gross value of your estate exceeds $150,000, it could be subject to probate.

Durable Power Of Attorney. A durable POA authorizes an agent of your own choosing to act on your behalf, when you’re unable to do so for yourself. Without a power of attorney, a judge may have to decide what happens to your assets, if you’re found to be mentally incompetent. That ruling may not be what you wanted. A POA can give your agent the power to transact real estate, enter into financial transactions and make other legal decisions in your stead (as if he or she were you). This POA is revocable by the principal at a time of his or her choosing, typically at a time when the principal is deemed to be physically able, mentally competent or upon death.

Beneficiary Designations. Some assets can pass directly to your heirs, without being dictated in the will (like a 401(k) plan).  Therefore, it’s important to have an up-to-date beneficiary, as well as a contingent beneficiary, on these types of accounts. If you fail to designate a beneficiary, or if the beneficiary has passed away or is unable to serve, a judge may decide what to do with your funds. This again may not be what you wanted.

Healthcare Power of Attorney. This appoints another individual (usually a spouse or family member) to make important healthcare decisions on your behalf, in the event of incapacity. If you’re thinking about creating such a document, you should select someone you trust, who shares your views and who would likely recommend a course of action with which you’d agree. A backup agent should also be named, if your initial pick is unavailable or unable to act at the time needed.

Guardianship Designations. If you have minor children or are considering having kids, choosing a guardian is very important and many times is overlooked. Be sure the individual or couple you choose shares your views, is financially sound and is willing to rear your children. You should also add a contingent guardian. Without these designations, a judge could rule that your kids should live with a family member you wouldn't have wanted, and in some cases, the court could require that your children become wards of the state.

As you can see, a will is a great start, but it's just the beginning.

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: Investopedia (April 18, 2018) “6 Estate Planning Must-Haves”