Nearly everyone here in Southern California has stayed at a Marriott hotel at some point. The Marriott company is the world’s largest publicly-traded hotel chain. However, all is not well with the family behind it.

John Marriott III is alleging that his father has forced him out of the business and has taken away his trust fund and essentially disowned him. He says that these actions were taken because he divorced his wife two years ago. The Marriotts are Mormons. That’s a religion in which divorce is strongly discouraged.

John Marriott, who is 56 years old, is suing his father and uncle, who control the trust that was established by their parents, for breaching their fiduciary duty.

The family battles go back more than a decade. John, who once held a high position in the Marriott company, admits that he has had issues with alcohol and drugs. However, he says that they have never impacted his work for the family company. He claims that his father gave him Valium when he was just 12 to relieve his anxiety, saying ‘You have everything you need. Go back to bed.’”

He says that when he told his parents that he and his wife were divorcing, his father told him, “You’re leaving the family.” He claims that his father threatened to make his substance abuse issues public unless he resigned from the company.

John Marriott, who is suing his father and his uncle, says that his loss of salary and the amount of money in the trust add up to the loss of millions of dollars a year in income. He also says that he no longer has a relationship with his mother or siblings.

He told the media, “Since the divorce, my dad has tried to take away everything that I’ve earned and everything that my grandparents left for me, basically to punish me for not maintaining the image of the perfect Mormon family.”

Most family trust disputes don’t involve this amount of money. However, it’s essential to understand the terms of any trust in which you’re named a beneficiary. If that trust is cut off, an experienced California estate planning attorney can advise you of your potential legal options.

Source: Washingtonian, “Marriott’s Former Heir Apparent Sues His Father,” Marisa M. Kashino, Oct. 30, 2017

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As we grow older, there comes a time when it is wise to consider giving another person the authority to make important legal and financial decisions on our behalf. These individuals may have a variety of duties, depending on the needs of the person they serve, and may go by a number of titles denoting their specific obligations and privileges. For the sake of brevity, we’ll address legal guardianship.

When you begin considering who should serve as your guardian, it is important to understand the kind of person who is likely to serve you well. Should you allow emotional factors or pre-existing relationships to carry too much weight as you consider your options, you may choose a guardian who does not fully meet your needs, or who may use your resources unfairly.

As with any matter that affects estate planning, it is always a good idea to consult with an established estate planning attorney who maintains a reputation of fair dealing. An experienced estate planning attorney can help you identify all of your estate’s needs and address many issues before they cause lasting trouble.

What makes a good guardian?

Acting as a guardian is both a privilege and a great responsibility. As you consider who within your community may best serve your needs, it is important to assess not only a candidate’s qualifications, but also his or her character.

Guardianship exists at the intersection of personal and professional matters, and a guardian who lacks strong personal character may take advantage of the position for personal gain at your expense. Consider these questions in your search for a suitable guardian:

• Do you believe that the candidate values and practices honesty and integrity, both personally and professionally?
• Does the candidate manage personal affairs in a responsible manner in his or her own life?
• Does the candidate engage in substance abuse that may alter his or her judgement?
• Does the candidate have any sort of criminal record?

Many individuals who make a mistake and find themselves on the wrong end of the law may make excellent guardians after learning a valuable lesson. However, they may not meet the legal requirements to serve as a guardian if they have a felony conviction on their record.

Similarly, you want to consider the professional qualifications of any candidate. While many different people may successfully serve as guardian for you and your estate, the more experience a person has in financial and legal matters, the more effective that person may prove in the long run.

Don’t hesitate to seek professional guidance

As you consider your options in guardianship, you may find that an objective professional third party is useful in your search. Seeking legal guidance can help you assess your needs and opportunities and ensure that you understand the full scope of the issues at hand.

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If you are an estate administrator tasked with the probate of an estate involving a large, expensive art collection, there are certain things that must be done in order to preserve harmony among the beneficiaries.

Paintings, sculptures and other artwork can have great sentimental as well as financial value. While not negating any of the sentimental value for the beneficiaries, estate administrators must concern themselves primarily with the market value of the collection as a whole and for each individual piece as well.

Along with the goal of determining as equitably and peacefully as possible which heir receives which piece of art, estate administrators should also try to minimize the taxes that will be owed.

Estate administrators’ first tasks should be to preserve the integrity of the collection. This may entail changing the locks or hiring security to protect the assets. It may be necessary to move pieces to climate-controlled storage facilities designed to hold fine artwork as the estate wends its way through the probate process.

For tax purposes, there is an uptick in value when art changes hands after a death. Thus, it may be appropriate to require all heirs to pay their own specific share of the taxes.

In order to derive an accurate valuation of the collection, a professional art appraiser should be retained. This person can also arrange an art auction if the heirs prefer to sell their legacies.

It should be noted that art collectors during their lifetime may benefit from selling their collections to dodge the estate taxes. A Los Angeles estate planning attorney can devise a charitable unitrust that is tax exempt but allows the art collector to collect distributions of the proceeds at regular intervals. These disbursements will be taxed as income instead of being hit with 28-percent capital gains taxes. The remainder of the funds is then left to the charity chosen by the collector upon his or her death.

Source: The Wall Street Journal, “Tips for Dividing Art in a Divorce or Death,” Daniel Grant, accessed Nov. 10, 2017

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Having an estate plan is wise for those who want to ensure that their wishes for the dispensation of their assets are carried out after their death. With an estate plan, you can also designate who will make decisions regarding legal, financial and health matters for you if you are unable to do these things for yourself.

Business owners should have a particular interest in having an estate plan in place in order to ensure that their business transfers to the person(s) they choose after death and that it continues to run as they would like regardless of what happens to them.

However, just putting an estate plan in place isn’t enough. Californians need to make sure that their estate plan is current. If, as we all hope, we have many productive years ahead of us after we draft our estate plan, we will likely need to amend it over the years.

Therefore, it’s troubling that a survey of more than 260 entrepreneurs, all successful, found that while nearly all of them have some sort of estate plan (at least a will), 85 percent of their plans were at least 5 years old.

With all of the changes in tax laws, that means that these entrepreneurs’ plans weren’t as tax-efficient as they should be. Of course, that also means that many of them had changes in their families (such as births, marriages and divorces) that their plans don’t reflect. They also don’t reflect changes in wealth since the plans were put into place.

No matter the size of your estate or whether you own a business or not, it’s essential that you review your estate plan regularly and notify your California estate planning attorney whenever you’ve had a change that you think could impact your plan.

Source: Forbes, “Most Successful Entrepreneurs Have Out Of Date Estate Plans,” Russ Alan Prince, accessed Nov. 03, 2017

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When creating an estate plan, there will come a point when you need to think long and hard about whom you name as the executor. While you may have many options, you need to make a final decision at some point.

The first thing you should do is consider the many steps that the executor will need to take upon your passing. Once you do this, you may find that some people are better suited for this task than others.

Taking this one step further, you should do your best to understand the challenges of serving as an executor. By putting yourself in this person’s shoes, it becomes easier to make a decision as to whom you should select.

Here are some of the top challenges of serving as an executor:

• Time commitment
• Gaining access to information and records
• Having enough legal and financial knowledge to make informed decisions
• Managing disagreements among heirs
• Filing tax returns
• Paying debts and bills that were left behind
• Distributing assets according to the estate plan
• Lack of compensation for the time put into the process

As you can see, serving as an executor is not nearly as simple as it sounds. Even in the event of a basic estate, the executor is still staffed with a variety of tasks and responsibilities.

If you are in the process of creating an estate plan and choosing an executor, make a list of people you can trust. From there, begin to narrow your options based on availability, health, personality traits and level of trust.

In the end, the only thing that matters is that you choose the right executor. This will give you peace of mind.

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When you begin considering making a will, you may consider a number of different ways to go about it. Some people choose to simply make wills on their own, many of which meet the requirements needed to hold up in court. However, involving an attorney has a number of benefits you may have yet to consider.

A will can only provide guidance in the areas where you make your wishes known. The reasons you have for creating a will may be perfectly good reasons, but they may also completely ignore areas of interest that you simply don’t know about. Enlisting help from an attorney ensures that you’ll have professional guidance through all of the areas where a will is generally useful, including issues you might otherwise miss entirely.

At the same time, an attorney provides you with a line of protection against a number of threats to your will. On a very practical level, an attorney who guides you through will creation will keep copies of the original will and related documents, which is a useful redundancy protection from losing the originals in a fire or a move, for instance. On a greater scale, if some party or another chooses to contest the will, the attorney is already poised to protect your wishes further.

If you believe that you can benefit from an attorney’s guidance through will creation or estate planning issues, don’t hesitate to schedule a free consultation with a practice. Professional estate planning guidance can help you understand the complete scope of benefits and protections a will can provide, and will walk with you through the entire process.

Source: Lake County Record-Bee, “Importance of original estate planning documents,” Dennis Fordham, Oct. 18, 2017

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A loved one named you as the agent (also known as an attorney-in-fact) for his or her power of attorney (POA). Now the time has come for you to act on your designated responsibilities.

When the person is no longer able to take care of his or her affairs, this role is crucial. That’s why it’s essential to get an agent’s permission before you make that designation and ensure that they understand the responsibilities involved.

Agents named in POAs can have different scopes of responsibility. They may only be responsible for health care or financial decisions, or may be limited to only making real estate transactions. Some agents are responsible for a wide variety of matters.

It’s important for those creating the POAs to try to avoid potential obstacles for the agents who need to exercise the authority they’ve been granted. Third parties aren’t required to accept that person or entity as a valid agent. Below are some common reasons why they may not be accepted.

The POA is too old

When it’s been some time since the POA was executed, banks, brokerages and other companies may be concerned that a newer one exists. Often, they won’t honor a POA that was executed more than five years prior. Some title companies require a POA no older than six months. Agents may also be asked by a third party to sign an affidavit stipulating that they aren’t aware of any termination of the POA or of their authority.

The POA wasn’t properly executed

In California, POAs have to be signed by the person who delegated the authority (the principal). This signature must be done in front of a notary public or two adults with no stake in the POA. If a POA involves property, the assessor’s parcel number and legal description must be included, and a specific description of the agent’s powers should be included, e.g., that they have the right to buy, sell, rent the property, etc.

California law allows third parties to “require the attorney-in-fact to provide identification, specimens of the signatures . . . and any other information reasonably necessary or appropriate to identify the principal and the attorney-in-fact.” However, they must have a good faith reason for not letting an agent carry out a POA. The agent can take the matter to court to compel that party to honor the document.If you have questions or issues involving the authority you’ve been granted by a POA, an experienced California estate planning attorney can provide assistance.

Source: Lake County News, “Estate Planning: Acceptance of powers of attorney,” Dennis Fordham, Oct. 07, 2017

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Recently, we discussed no contest clauses in wills. We noted that when people are found to have a legitimate reason to believe that all or part of a will should be contested, they can challenge it without fear of losing whatever inheritance they were given.

If you want to help ensure that your family and others don’t contest your will, a no contest clause can provide a deterrent. Many people don’t want to risk being left out of an estate altogether, which could happen if their contest isn’t deemed to be legitimate.

However, there are things you can do to assure your family that you drafted your will and other estate documents with full knowledge and understanding of what you were doing, without any undue influence. They might not like the contents of the will, but they will know that this was your decision and that there probably aren’t valid grounds for challenging it.

This means not waiting until you are elderly and/or very sick to create your estate plan. Ideally, you should do it while you’re still of sound mind and body. You can always make changes later if you need to. Estate planning attorneys generally recommend reviewing your estate plan at least annually.

Let your loved ones know what’s in your estate plan. If you’re cutting out one of your children or deciding to leave everything to your favorite charity because you believe your kids are old enough to take care of themselves, let them know. These can be difficult conversations, but if you don’t have them, your family will have all the more reason to suspect that someone influenced you to cut them out.

Another way to avoid a will contest, particularly from someone outside your family, is to use a revocable living trust instead of a will. That’s because a revocable living trust is a private document, while a will is a public one that can be accessed by anyone after it’s been filed in probate court.

Your California estate planning attorney can provide guidance for preventing disputes and contests to your estate plan among your loved ones after you’re gone. He or she can also help you prepare for conversations with your family about the contents of your estate plan.

Source: The Balance, “5 Tips for Avoiding a Will Contest,” Julie Garber, accessed Oct. 11, 2017

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Your great aunt died, and you learn that because you were always her favorite, she left you her home. That may sound like an unexpected bit of good fortune amid the grief of losing a loved one. However, home ownership isn’t all it’s cracked up to be — particularly if the house is old, in disrepair and/or simply not where you want to live.

Before you decide what to do, take a look at the property, particularly if you haven’t seen it in some time. It may no longer be the anything like your childhood memories of it. Then, you need to consider your options.

Make the home your own

If the home is where you want to live, that’s great. Even if it’s paid off, though, remember that you still need to pay property taxes and the other costs that go with home ownership. You may also owe an inheritance tax.

Keep the home and rent it

An inherited home can be a nice source of rental income if you don’t mind being a landlord or paying a management company to handle the job. If property values are rising, keeping it may be a good investment.

Sell the property

There are a couple of options if you decide to sell the it. Many people have an estate sale that includes the home, furniture and other belongings they don’t want. This is often the simplest way to handle inherited properties.

You may decide to fix it up so you can get a higher price. It’s a matter of whether the money and time you spend on repairs and renovations is worth the amount you can get by bumping up the sale price.

Refuse the inheritance

Take a look at what the house is actually worth. If the remaining mortgage is more than the property value, you may not want to deal with it. You are allowed to “disclaim” an inheritance. However, if that’s your decision, notify the executor as soon as possible.

If you’ve inherited a property, whether alone or with others (which can have its own complications), it’s wise to seek legal guidance from an experienced estate planning attorney as well as from real estate, financial and tax professionals to ensure that you’re making the best decision for your future.

Source: Realtor.com, “So You Inherited Property—Now What?,” Lisa Johnson Mandell, accessed Oct. 06, 2017

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Being the executor of a loved one’s estate is no easy task and it’s a very big responsibility. These responsibilities could feel overwhelming to the average California resident, especially if you’ve never served as an executor before.

Consider the following if you’ve been tasked with being the administrator or executor for a deceased loved one’s estate.

5 tips for California executors

Here are five things to consider if you’re an executor:

1. Does the estate have extra funds and assets? It’s not uncommon for an estate to be deficient in funds. There may not be enough money to pay for funeral, memorial and other end-of-life costs. Be sure to consider all of these costs when making funeral arrangements to stay within a reasonable and affordable budget.
2. Create a checking account for the estate. You’ll need to take care of different expenses relating to your loved one’s estate, and to pay for those, you’ll want to have an estate checking account. You will fund the account with money from the estate as it is available to pay for expenses. You can also deposit checks paid to the estate into this account.
3. Can you receive compensation for being the executor? As the executor of the estate, you often have the legal right to take some compensation for your role if the estate has sufficient capital to pay you. You will want to discuss your plans to take a fee with all beneficiaries so they know beforehand.
4. Be wise with your money management. As the executor, you have a fiduciary obligation to save money and act in the best interests of the estate to preserve as much wealth as possible for the beneficiaries. If you make unwise or negligent choices you could be personally financially responsible.
5. Keep detailed records. If you don’t keep detailed records, receipts related to expenses, and notes about conversations, you could find yourself in trouble later on down the road. Document what you do, and you won’t be in danger of appearing dishonest.

Are you the executor of an estate?

Learn as much as you can about California probate and estate administration law to ensure that you perform your executorship duties as well as possible. You may also want to reach out for professional assistance and guidance as you fulfill this vital and important role.

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