We all want our divorced or widowed parents to find love again, particularly as they get into their later years. However, when they decide to remarry, as more and more seniors are, adult children often become concerned about what that will mean for their inheritance.

Sadly, older couples often decide not to marry because their adult children are concerned that the new spouse will get everything and share nothing with them. They may even believe that this is true.

No matter how long a couple may have lived together, if they aren’t married, when one dies, the other likely won’t inherit anything if there’s no estate plan in place. Surviving children would have priority, followed by other biological family, under the laws in inheritance.

However, concerns about adult children’s inheritances shouldn’t stop any couple from marrying. With a will and a prenuptial agreement (both wise choices for anyone getting married later in life), you can stipulate how your assets will be disbursed after your death.

There are still practical and financial reasons why it’s better to remain unwed, In fact, the number of couples over 50 who are choosing to live together without getting married has grown by 75 percent over approximately the last decade.

However, no couple who wants to wed should stay unmarried because of concerns about inheritances. By having everything properly codified in a prenup and your estate plan, you can ensure that your children get the assets you want to leave them and that your spouse will be taken care of as well if you die first. This planning can also help your children and spouse build a good relationship.

Source: The New York Times, “When Your Parents Remarry, Everyone Is Happy, Right?,” Tammy LaGorce, March 22, 2018

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One advantage of having a carefully-considered, detailed estate plan is that you minimize the chance of fighting among heirs after you’re gone. Even close family members can turn on each other if they believe that they were unfairly or mistakenly denied the inheritance they expected.

There are myriad family dynamics that can be predictors of an estate battle. Following are a few, along with steps you can take in your estate planning to minimize resulting issues.

Mental illness or substance abuse

As we’ve discussed previously, when you have a child or other family member with a substance abuse issue, you’re rightfully concerned about their ability to handle an inheritance. The may also be true with family members with serious psychological issues.

A trust is generally the best way to ensure that your loved one is included in the will, but that disbursements of assets are supervised by a trustee. If an heir receives government assistance for a disability, a trust can be set up so that it doesn’t impact those benefits, but he or she can still receive supervised disbursements from the trust.

Sibling rivalry

This can be a big source of conflict. Perceived unfairness in the estate plan can trigger emotions from a lifetime of sibling battles — even if you take pains to treat them equally in your estate.

If you believe that your children will fight over your estate, it’s best not to appoint any of them as the trustee. That will only exacerbate the sense of inequality. Appointing multiple children as co-trustees can make things even worse. Choose someone you trust, but who’s outside the immediate family dynamics. If necessary, you may need to appoint a professional fiduciary.

Remarriage

When people go into a second marriage later in life, relationships between adult children and stepparents are often strained. When people remarry, it’s essential that they update their estate plan. It’s also wise to have a prenuptial agreement. These documents can help ensure that your children get the inheritance you intend. Otherwise, the surviving spouse is at a significant advantage under California law.

You can further avoid familial conflict after you die by discussing your estate planning decisions with your children and other close relatives while you’re alive so that there are no major surprises. It’s also essential to keep your estate planning documents up-to-date to reflect changes in your life and your family.

Source: Everplans, “8 Signs Your Family Will Fight Over Your Estate,” accessed March 19, 2018

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One of the major concerns of family members who have lost a loved one has to do with the financial aspects of the death. People who are dealing with an estate that is a fairly nice size will have to determine what debts must be paid and in what order. The estate administrator is the person who will have to deal with these matters.

When you are going over the assets and debts for an estate, you need to understand how to handle the debts. There are several factors that have to be considered. Here are a few that you need to remember:

Secured vs. unsecured

Secured debts, such as a home that has a mortgage, can usually be collected by the creditor because they can just take the property back. Unsecured debts, such as credit card debts have no guarantee for being paid. California laws set all debts into categories that dictate the urgency to pay. Priority debts must be paid first. Any funds that are left from the estate after those are paid would then trickle down to other debts. When debts that are required to be paid are all taken care of, the heirs will get the remainder of the estate.

Mortgage debt

One interesting thing to note about mortgage debt is that the mortgage company can’t demand that a mortgage is paid off immediately if there is a co-owner on the home. Instead, the co-owner would have to continue making the payments on the home. If there isn’t a co-owner, the person who inherits the home could pay the mortgage off or the estate might pay it off. In some cases, it is possible for an heir to just pick up the payments on the mortgage.

Student loan debts

With the exception of student loans who have a co-signer, there isn’t any guarantee that these loans will be paid when a person passes away. If the estate has the money to pay them, they can be covered. If not, the debt is likely going to have to be charged off.

Other debts

Other debts, such as credit card debts and medical bills, will be paid as possible from an estate. Just like student loan debts, these will have to be dismissed if the estate is unable to pay. As is the case with many things that have to do with probate, administrators should verify the order that bills for the estate must be paid.

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If a loved one asks you to be the executor of his or her estate, it’s understandably not something you want to think about until you have to. However, after your loved one is gone, you’re likely going to be in a state of grief and perhaps denial.

Therefore, it’s important to know what being an executor entails and to be as prepared as possible when the time comes. The more detailed and organized your loved one has been in his or her estate planning, the easier the job will be for you.

First, you need to access the original will and other estate documents. You’ll also need to obtain multiple copies of the death certificate. The funeral home can get you those certificates. If your loved one lived alone, it’s also essential to ensure that the home is safe, that mail doesn’t accumulate and that bills get paid.

If your loved one has an estate planning attorney, he or she will help you deal with the legal and financial issues. If the attorney who drafted the will is no longer around, you should seek guidance from an estate planning attorney in the state where your loved one lived.

If the will has to be probated, there are fees assessed. You may have to pay some costs out-of-pocket. Keep records of those so that you can get reimbursed from the estate.

Administering the estate will consume the bulk of your time and energy. This process includes finding all of the assets owned by the deceased. It also includes paying taxes and debts owed by that person. You’ll need to distribute assets to heirs and beneficiaries as your loved one designated and finally pay yourself as the executor.

If someone asks you to be an executor and you aren’t the closest living relative, consider whether this is something you want to take on before you say yes. It requires time, patience and good organizational skills.

If you agree to be the executor, make sure the person has a current, comprehensive estate plan and that you know where to locate everything you’ll need. Know where all of the documents are, where necessary passwords are stored and who the estate planning attorney is. Make sure you have everything necessary to begin your job when you are called on to do so.

Source: Kiplinger, “How to Perform the Duties of Executor of an Estate,” Daniel A. Timins, Esq., CFP, accessed March 12, 2018

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Creating an estate plan that truly protects your assets and makes your intentions known regarding the dispersal those assets is often far more complicated than one might expect here in California, especially when it comes to real estate.

Without a properly prepared estate plan and will, your wishes for your estate may not align with a slew of state laws that govern real estate and probate. Considering the relatively low threshold for probate in the Golden State, nearly every property owner must deal with probate one way or another in when executing an estate plan. However, a poorly executed will or plan may simply create larger conflicts for beneficiaries and drain the resources of the estate while the matter gets resolved.

If you have real estate holdings in California and wish to avoid or minimize probate, it is crucial that you understand some of the nuances of the applicable laws. An experienced probate and estate planning attorney is a strong resource to help ensure that you understand these issues in detail and have the tools you need to make your wishes clear. Even more importantly, this guidance can ensure that your estate plan is not unnecessarily vulnerable to legal challenges.

Willing property to a trust

One of the most common ways to circumvent probate is by placing property into a trust. However, in California, it is not sufficient to simply list property within a trust in your will. It is also necessary to prepare a deed that transfers the property officially into the ownership of the trust.

If you only list a piece of real property within a trust in your will and do not officially transfer the ownership, you may create massive conflicts between beneficiaries. Without a proper deed transferring the property, it will remain in your ownership no matter what your will dictates.

Unfortunately, addressing this may not be a one-time occurrence. Depending on the length of time that the property remains in the trust, you may need or want to refinance. This often requires returning the legal ownership of the property to your name in order to complete the refinance process and then once again transferring it back to the ownership of the trust, all through creating deeds to facilitate each transfer.

In each of these steps, it is necessary to carefully plan and execute the process, so that there is no ambiguity about your intentions. Unfortunately, the more alterations and transfers a property receives, the greater the likelihood of generating contradictions or omissions in the documentation that may lead to conflicts for your beneficiaries and potential legal challenges to your will once you are gone.

Take your own wishes seriously

Properly expressing and protecting your wishes may take time, but it is well worth it. If you choose to ignore these details, your estate distribution may look nothing like you intended when the time comes. Don’t hesitate to use all the tools you have to make these wishes clear and keep your legacy protected.

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As Americans live longer and have to stretch their retirement savings farther, many people die owing more money than they have. Increasingly, older Americans are in debt — sometimes substantial debt. Almost a quarter of people over 75 are still making mortgage payments. When people who have more debt than assets die, their adult children are forced to deal with their parents’ debt as they manage their estate.

When someone dies, his or her debt transfers to that person’s estate and is paid out of the estate. However, if there aren’t enough assets in the estate to cover those debts, the deceased’s survivors (with the exception of spouses) usually aren’t responsible for the debt if they aren’t co-signers on it.

That’s one piece of good news. Another is that if your parent named you as a beneficiary on a bank account, retirement plan, insurance policy or other asset, you aren’t required to use that money to pay that parent’s debt. You’re free to take it without obligation.

Sorting through a parent or other loved one’s debts can be labor-intensive. However, it’s essential to know how much that person owed and to whom. Generally, if you notify creditors of the death and inform them that the state is insolvent, they will cancel the debt.

Unfortunately, sometimes creditors will try to manipulate loved ones by telling them that it’s their responsibility to pay the debt, particularly if they inherited money. That’s why it’s essential to consult with a California estate planning attorney. He or she can advise you of the proper course of action and let you know what your rights and responsibilities are as you settle the estate.

Source: Washington Post, “When your parents die broke,” Liz Weston, AP, March 05, 2018

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Increasingly, Californians doing their estate planning have to deal with the reality that they have a child with a substance abuse problem. Even when children are in recovery, parents may be understandably concerned about what could happen if they inherited a large sum of money or considerable assets. Even a few thousand dollars given in a lump sum to an addict could lead to tragic consequences.

There are a number of options for parents of addicts. Some involve trusts. It’s essential to have a trustee whom you can rely on to oversee the trust responsibly. Your child’s well-being and even life may depend on it. It may seem obvious to choose another child or other family member for this responsibility, but that’s not always wise. It can complicate an already difficult family situation.

One option is a spendthrift trust. As the name implies, these are often used for children whom parents don’t feel are responsible enough, for whatever reason, to handle a large inheritance. There are variations of this trust, but essentially the trustee has control of giving part or all of the money to the heir as he or she sees fit. The trustee can use the funds to help ensure that the heir has enough for housing, food and necessities, but not enough to feed the addiction.

Some parents use incentive trusts, also known as conditional trusts, for children with substance abuse issues. They determine the conditions under which money can be disbursed, by the trustee, such as completing rehab and remaining sober for a year. They may set a condition where if the child relapses, funds are cut off. These conditions help protect the funds from being misspent and, more importantly, can provide a needed incentive for continued sobriety.

Addiction and legal experts often discourage choosing to disinherit children because of substance abuse issues — even if you’ve given up hope of them ever recovering. People may leave children out of the will with the intention of including them if they turn their lives around, but don’t get to it before they die.

Many people are ashamed to talk about their child’s substance abuse problems with anyone, including their estate planning attorney. However, your attorney needs the facts to help you draw up an estate plan that you feel is best for your family.

Source: Beginnings Treatment Centers, “Inheritance, Estate Planning, and Addiction,” accessed Feb. 27, 2018

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Recently, we discussed the battle over music legend James Brown’s estate among those involved in his complicated personal life. Now the estate of another wealthy and colorful man, billionaire mogul Kirk Kerkorian, is the source of a legal battle here in California nearly three years after his death at 98 years old in June 2015. The state’s attorney general is even involved.

Kerkorian is known for, among other things, envisioning the future of Las Vegas back in the post-World War II era and for buying MGM studios multiple times. The man who didn’t get beyond the eighth grade was at one point reportedly the wealthiest person in Los Angeles.

Kerkorian left most of his approximately $2 billion-dollar estate to various charities. He had appointed three people, including his business partner, to distribute the funds within three years. As that deadline approaches, things are heating up.

Kerkorian’s fourth wife, Una Davis, who was legally married to him when he died, is claiming that she owed one-third of his estate as his widow. This is despite the fact that she reportedly signed a waiver agreeing that, in exchange for $10 million, she wouldn’t seek any money from his estate. The two lived together less than two months, according to Kerkorian’s business partner.

Davis is claiming that Kerkorian wasn’t able to make informed decisions when the agreement was drafted and that those around him had undue influence on him. The executor was granted the ability to challenge her demand by an appeals court last month. It has yet to be determined whether a trial is necessary to settle the matter.

As noted, the state attorney general is also involved in the estate battle. That’s because of the considerable amount of funds bequeathed to non-profit organizations and the impact that the decision on the disbursement of those funds would have on them.

No matter how well crafted an estate plan may be, when there are considerable funds at stake, competing interests and an elderly decedent, things can get messy. California estate planning attorneys can provide necessary legal guidance to anyone involved in one of these battles.

Source: Hollywood Reporter, “The Battle Over MGM Mogul Kirk Kerkorian’s $2 Billion Estate,” Eriq Gardner, Feb. 14, 2018

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The majority of Americans don’t have a will. Even many of those who realize that they should put something in place to lay out how their assets will be distributed and, more importantly, who will take care of their kids, use do-it-yourself (DIY) methods.

There is no end to software options for people who want to draft their own will without the hassle and cost of consulting an attorney. Many people think they don’t have enough money to warrant getting legal advice. Even some people with millions of dollars sometimes think that their estate is simple.

However, even a simple will is a legal document. It’s subject to state laws. Here in California, those are complicated. If things aren’t done correctly, you could be subjecting your heirs and beneficiaries to costly and time-consuming problems.

One lawyer describes the value in consulting with an estate planning attorney about your unique situation. He says, “With an online form, you have choices, but what you lack is this consultation of being able to say to someone, ‘Walk me through this. Let me get this comfort level of how this would play out for me really for my family.’”

Further, DIY estate planning options aren’t appropriate for many situations, such as those involving people with blended families, business owners and parents of disabled children who will need trusts. Even if you start the process with some type of estate planning software, you can hand it over to an attorney who will ensure that everything is in proper order. Another attorney says, “One of the most loving things you can do is not make people guess at what you wanted.”

California has unique estate planning laws. If your estate plan doesn’t conform to those laws, it could be invalidated, which means that your wishes may not be carried out. That’s why it’s worthwhile to have the help of an experienced California estate planning attorney.

Source: NerdWallet, “You can do your own estate planning, but should you?,” Liz Weston, Feb. 08, 2018

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Recently, we discussed the fact that many estate disputes involve stepmothers and their stepchildren. That’s the case with the estate of music legend James Brown. The “Godfather of Soul” died just over 11 years ago, on Christmas Day 2006, after a complicated life that included drugs, multiple arrests and estrangement from some of his children.

Brown had what no less than the South Carolina Supreme Court called a “carefully crafted estate plan” that directed most of his millions of dollars to be used for scholarships for underprivileged children in South Carolina and Georgia. He also left scholarship money to his grandchildren and other assets to children he acknowledged as his. Estimates of the value of the estate range from under $5 million to $100 million. However, those assets are caught in a legal quagmire.

That’s because the estate has been embroiled in over a dozen lawsuits stretching from South Carolina to California. One suit was filed here in California just last month in federal court.

Some of Brown’s children and grandchildren are suing his widow, Tommie Rae Hynie, who is the administrator of her husband’s estate. The nine plaintiffs claim that she made “illegal back-room agreements” regarding copyrights for his songs. That’s where most of the value of his estate lies.

They continue to claim that Hynie wasn’t legally married to their father because she was still married to someone else when she wed the singer. A court has ruled in her favor.

Brown’s troubles with substance abuse are behind some of the will contests. Some of his children and grandchildren have claimed that he was in no shape to make sound decisions regarding his estate.

One of Brown’s sons publicly lamented the fact that his father’s intentions to help kids in the states where he spent his young years have been held up by the legal wrangling. He says, “There are no winners in this.”

Obviously, most people don’t have Brown’s wealth or his complicated personal life. However, even the best intentions can be jeopardized by family squabbles after a loved one dies. If you are dealing with contests to a loved one’s estate, it’s essential to have an experienced California estate planning attorney by your side.

Source: The New York Times, “Why Is James Brown’s Estate Still Unsettled? Ask the Lawyers,” Steve Knopper, Feb. 04, 2018

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