Many people don’t think of themselves as having an “estate” that they will be leaving to others after their death. However, even if you own don’t own a home, have a stock portfolio or have accumulated little in the way of valuables, you likely have at least one bank account. If you don’t codify who will get the funds in your account upon your death, it could end up in probate, creating unnecessary costs and inconvenience for your loved ones.

Sometimes, even people who draw up a detailed estate plan think little about their bank accounts. Even if you go over your accounts with your estate planning attorney, you may forget about some of them if their balances are small or you haven’t used them for awhile.

There are steps that you can take to designate how the funds in your bank accounts will be disbursed. This is particularly important to do for any accounts where you have sole ownership. If you don’t name a payable-on-death beneficiary on your account, it may need to go through probate. This is true even if you are married if your spouse isn’t a co-owner of the account.

It’s important to note that if you give your spouse (or anyone else) power of attorney on a sole ownership account, but it’s not a payable-on-death account, that person won’t have access to the funds after your death.

If you set up a living trust and include the account in the trust, it will be taken over by your successor trustee when you die. He or she will distribute the assets, along with the other assets in your trust, as you’ve designated. You’ll need to change the ownership of your account to your living trust name to help avoid any complications.

Many married couples have joint bank accounts. Generally, when one owner dies, the other one automatically becomes the sole owner.

Whether your estate plan involves a simple will or numerous documents, it’s important to designate what will happen to your bank accounts. Your California estate planning attorney can provide guidance and answer your questions.

Source: Huffington Post, “What Happens to Your Bank Account When You Die?,” accessed Sep. 07, 2016

Posted in Estate Planning | No Comments »

For people who are in lines of work that involve intellectual property, taking steps to protect that property from being used by others without their permission is essential. This can include artistic works like music, art and fashion designs, as well as computer programs and inventions. If you’re a famous person, it can even include the use of your photo or other likeness. Intellectual property is generally trademarked, patented or copyrighted.

Protecting your intellectual property after you’re gone is also essential. That’s why it needs to be included in your estate plan. The untimely death of music icon Prince this year, reportedly without a will, highlighted the complications that arise when it’s uncertain what someone wanted done with their intellectual property after their death. For Prince, that included large amounts of music, both published and unpublished, as well as his likeness.

It’s important to detail how you want the earnings on your intellectual property to be divided among your heirs and beneficiaries. However, you also want to ensure that the property is properly administered.

One issue in designating your wishes for your intellectual property after you’re gone is estimating the value of it. In many cases, it’s based on future earnings potential, which can be difficult to estimate. Sometimes, writers’ and artists’ works increase greatly in value after their death. Others, sadly, may be forgotten once the person behind them is no longer around creating new works and promoting their creations.

Determining who will handle your intellectual property is a crucial consideration. Some people designate a trusted family member who’s handling the rest of the estate. Some designate a separate person or entity with knowledge about managing intellectual property to be their intellectual property executor.

Tax considerations are just as important for more intangible assets like intellectual property as they are for assets like real estate, cash and jewelry. A California estate planning attorney who has experience with intellectual property can provide guidance to help you ensure that your work is protected after you’re gone and that your wishes for it are carried out.

Source: The Sabetha Herald, “Estate planning for intellectual property,” Bob Schumann, Aug. 24, 2016

Posted in Estate Planning | No Comments »

The probate process varies from one person to the next; however, there are some basics you should become familiar with.

Once you know the ins and outs of probate, you can make more informed decisions in regards to your estate plan. Generally speaking, here are the basic steps associated with probate:

— The person outlined in the will files the appropriate documents to be named the fiduciary.

— Notices are sent in regards to the hearing.

— If there is any reason to question the validity of the will, an objection could be filed resulting in litigation.

— The fiduciary will take inventory of all assets.

— All debt is paid by the estate.

— Remaining assets are distributed as outlined in the will.

In its most basic form, there isn’t much confusion associated with the probate process. However, if you’ve ever been part of this in the past, you know that things can and will come up along the way.

It doesn’t matter if you are creating an estate plan or in charge of the probate process upon a person’s death, you must make sure you know the law and what is required of you.

Our law firm can help you better understand probate law, including where you fit in and what you can do to avoid mistakes and stay on track.

If you have any questions about probate or estate planning in general, we are here to help. Either way, you know that we are here to answer your questions and make things simple to help you avoid a stressful situation.

Posted in Probate | No Comments »

Managing your assets as you get into your later years is tricky. You don’t want to give away too much too soon, so that your care becomes a burden to others. But if you aren’t careful you can get hit with medical costs that threaten to eat up much of your estate.

A timely example of this is what happens when someone has a lengthy stay for rehabilitation in a nursing facility, after a hospital stay that was classified as “observation status” rather than admission. In that situation, Medicare refuses to pay for the rehabilitative stay – which can result in extremely large out-of-pocket expenses for patients.

In this post, we will update you on a new federal law that affects payments for rehabilitative care in this context. We will also discuss how this could affect your estate plan.

When Medicare won’t pay: an example

Earlier this month, The New York Times gave an example of how people can get blindsided with huge medical costs when going to skilled nursing facility for rehab after a hospital stay that was classified as observational rather than a formal admission.

The case involved an 85-year-old woman in Pennsylvania who had handled her money well and had substantial assets. After suffering a bad fall, she spent nearly a week in the hospital, and then almost five more months in a skilled nursing facility for rehabilitative care.

Quite to the woman’s surprise, Medicare refused to pay for the woman’s stay and services in the nursing facility. The cost was over $40,000. And the elderly woman would have to pay that out of her own pocket.

Naturally she found this nonsensical. After all, she had paid into Medicare for so many years. How then could Medicare not cover her now?

How Medicare rules got to be this way

Medicare rules restrict reimbursement for rehab after an “observational” hospital stay because auditors working for the government had become concerned about hospitals becoming too quick to admit patients.

What resulted was a rule that withheld payment for stays in rehabilitative nursing care unless such stays were preceded by a hospital admission of at least three successive days.

Under the peculiarities of the Medicare rules, time under in a hospital bed under “observation” status is not counted when calculating the three days. This is the case even if the person under observation receives extensive services.

As a result, a long stay in rehab can result in bewilderingly large out-of-pocket costs for someone who was expecting Medicare to pay for them.

Response by Congress

Congress has acted to address, though not completely fix, this strange payment scenario.

What Congress didn’t do is require Medicare to pay for rehab services that follow a lengthy hospital stay. But Congress has required that Medicare outpatients get a formal notice that they are on the hook for the costs. This new notice requirement takes effect in January.

Congress is also considering tweaking the law further, so that time spent under observation in a hospital could be included in determining whether someone was in the hospital long enough in order for Medicare to cover subsequent nursing and rehabilitative care.

Protecting your assets

A rule like this one on Medicare coverage can affect you in several different ways. For starters, if you or a close family member is facing several nights in a hospital under “observation,” you could consider insisting on admission as the formal status.

More broadly, there is also the question on how to manage your assets so that they are not excessively impacted by health care costs. It makes sense to discuss your situation with a knowledgeable attorney. An attorney can help you make appropriate use of trusts or other estate planning tools to make decisions about your assets that fit your family’s goals.

Posted in Estate Planning | No Comments »

Remarriage is one of those life events that will likely necessitate some changes to your estate plan. You’ll probably want to include your new spouse in your plan while ensuring that any children from your previous marriage still receive at least some of the assets that you originally designated to them. Further, you may want to designate your new spouse as your health care and/or financial power of attorney.

Simply by marrying someone, you give that person a considerable share in your assets as well as authority over your estate. Remember that California is a community property state.

If you don’t already have a will or other estate planning documents when you remarry, now is the time to draw them up. Unless you designate otherwise, your new spouse can make decisions regarding your estate. This could include denying your children and your former spouse any assets or property you may have promised them. Your spouse would also have the right to make health care and end-of-life decisions for you if you’re unable to do so.

If you already have estate planning documents, your attorney can help you make the changes you desire and provide advice and guidance to help ensure that your wishes are carried out. If you don’t have an estate plan, he or she can work with you to draft the necessary documents. Many people think that a prenuptial agreement is enough, but it’s not.

It’s important to be honest with your children about whether or how your new marriage will impact their inheritance. A conversation with your former spouse may also be necessary. If family members know what to expect, there will be less in-fighting after you’re gone.

Source: CNBC, “Getting remarried? Protect your assets and your interests,” Deborah Nason, July 28, 2016

Posted in Estate Planning | No Comments »

Most young people don’t consider developing an estate plan unless they have a considerable amount of money or assets, either from earnings, an inheritance, a legal settlement or some other source. They’re busy building their careers, working towards paying off student loans and perhaps starting families.

However, even successful young actor Anton Yelchin, who was suddenly and tragically killed in June when his Jeep rolled down his driveway, crushing him, didn’t have a will. The parents of the 27-year-old actor, best known for his role in the latest round of “Star Trek” films, had to go to court to be granted the right to administer his $1.4 million estate.

While most young people don’t have anything close to those types of assets, estate planning experts recommend that anyone 18 and older should at least have documents in place stating who can make health care and financial decisions for him or her should he or she be unable to do so. Once people turn 18, their parents or guardians no longer automatically have the authority to make medical decisions for them.

Debilitating accidents and illnesses can happen to anyone at any age. We’ve all seen stories about family members fighting over whether a person should be kept on life support or allowed to die. A health care power of attorney (in California, it’s called an “Advance Health Care Directive”) allows you to choose the person who will be responsible for overseeing these decisions.

Further, it gives you the opportunity to designate your wishes if you were to become incapacitated and unable to speak for yourself. This can relieve the considerable burden placed on family members who have to make end-of-life decisions.

A financial POA is also a good estate planning document to have. It designates who can access your accounts. This can help prevent your family from having to go to court to have one appointed. It can also help in ensuring that bills and other obligations continue to be paid if you’re unable to take care of the obligations for a time.

As one estate planning professional notes, these documents allow people “to have a voice ahead of time” in what will happen to them and their assets if they die or are unable to speak for themselves. They can also be the basis for a more comprehensive estate plan later on.

Source: Investment News, “The most important part of a young person’s estate plan,” Greg Iacurci, Aug. 03, 2016

Posted in Estate Planning | No Comments »

Increasingly, more of our financial and social activity is carried out online. This can create a dilemma for surviving family members when someone dies. While people can and should designate an executor for their estate in their will, that designation doesn’t give them access to accounts that are strictly online, such as some bank accounts and e-mail accounts.

Some states have enacted legislation to allow executors, trustees and others named by the court to access to a person’s “digital estate,” based on the Uniform Fiduciary Access to Digital Assets Act (UFADAA). However, California hasn’t yet done so.

As part of your estate planning, your attorney will likely recommend that you maintain a list of your passwords, along with security questions and other information needed to access your online accounts. Of course, it’s essential to keep that up-to-date as you add accounts and change passwords.

You can do that on something as simple as an Excel spreadsheet that’s password protected (with your executor or designated family member having that password). However, there are also third-party password manager sites like LastPass that allow you to store your passwords and send the information to a designated person if the user dies. However, if you choose to store your passwords with a third-party site, there’s always the risk of the site being hacked.

There are also digital legacy companies that make it easier to transfer access information to executors and/or family members. Your attorney may be able to recommend one.

Many people of all ages have a social media presence on Facebook, Twitter and other sites. Facebook now lets users designate an executor to access their account after their death and delete it or memorialize it. This can be a simple way to notify people of someone’s death and perhaps share information about things like funeral services and memorial funds, while giving people a place to share condolences and memories.

Some estate planning attorneys have portals on their websites where clients can securely store information, documents and anything that you think will be helpful for those administering your estate. Your attorney can help you with your digital estate as you’re working on your estate planning documents.

Source: WealthManagement.com, “Creating an Effective Digital Estate Plan,” Christopher Steele, July 20, 2016

Posted in Estate Administration | No Comments »

California parents who have special needs children have unique challenges when they’re doing their estate planning. That’s why it’s essential to have an experienced California estate planning attorney guide you through the process and help you avoid some common mistakes.

Following are some of these mistakes and how they can impact the future not only of your special needs child, but of their siblings and other family members:

— Not having a revocable living trust: Many people establish a special needs trust for their child within their will. However, these can become public record and sometimes be accessed via the Internet. This can leave your children vulnerable to those who would take financial advantage of them. It’s important to establish a separate trust so that it can’t be accessed by anyone who doesn’t need to see it.

— Choosing a trustee from within the family: It’s common to choose family members as trustees in most situations. However, trusts for people with special needs are more complex. Mistakes in distributions can disqualify the person for government benefits. It’s better to engage a trust company or bank that knows the laws and keeps up with changes.

— Not providing sufficient assets for the trust: Remember that the funds in the trust may need to last your child for a lifetime. Often, parents purchase a permanent life insurance policy. The younger the parents are when they do that, the less expensive the policy will be. Don’t rely on your other children to provide financial support for their special needs sibling.

— Not inviting others to contribute to the trust: Although you normally shouldn’t place all of the financial burden of caring for your child on others in the family, it’s a good idea to invite them to make gifts to the trust or to name the trust as a beneficiary of their retirement accounts or life insurance policies.

Your California estate planning attorney can advise you on your special needs trust based on your own unique family and financial situation. He or she will also help you keep it up to date as circumstances and laws change.

Source: Yahoo! Finance, “6 Planning Mistakes You Can Avoid If You Have a Special Needs Child,” July 06, 2016

Posted in Estate Planning | No Comments »

Family issues and legal issues often intersect. When you have children with special needs, there are even more circumstances to consider than the average family. Most families can discuss how they should deal with unexpected incapacity or the administration of an estate.

A child with special needs often neither able to participate in this conversation or handle their own care when you are not there to help. In addition to adequately providing for the child in an estate plan, parents and caregivers must think about the child’s life without them and proceed carefully in order to protect the child’s eligibility for government benefits.

Divorce is a family issue that complicates estate planning even further. That is why it is important to consult with a legal professional for estate planning when financially preparing for the future.

Estate planning for special needs

If you have a child with special needs, it is important to ensure that his or her needs will be met if you or other caregivers pass away unexpectedly. Because many children with special needs require care and supervision throughout adulthood, this requires a lot of long-term planning.

An estate attorney can help you understand what documents need to be on file in order to safeguard your child’s future without endangering his eligibility for government benefits such as Supplemental Security Income and Medicaid.

A special needs trust can provide a layer of protection for your child. This is a trust that is created and funded by a third party such as an authorized non-profit organization. It can be administered by a family member or a court-appointed trustee. A special needs trust will not prohibit the individual from receiving government benefits.

There are other estate planning documents that are important for families with children who have special needs. An attorney can help prepare these documents, which include a will, a general durable power of attorney (GDPA), a durable medical power of attorney, and a living trust.

How does divorce affect the estate?

Divorce is a difficult decision, particularly for parents with a special needs child. You may worry about whether the child can handle the change or if you will have the funds necessary to be able to provide the same care. The second issue is one that your divorce lawyer can help you tackle, but it is a good idea to bring in an estate attorney as well during the process.

A special needs trust is particularly beneficial in the case of divorce, as it can be used to receive child support payments. The effect of child support on eligibility for government benefits can be mitigated if the special needs trust is properly implemented. This should be part of the property settlement agreement, a stage of the divorce proceedings.

Guardianship and custody is another significant concern in a divorce involving a child with special needs. In the case of a minor child, an agreement regarding parenting responsibilities should be part of the property settlement agreement. If the child has reached the age of majority, the court will undertake a guardianship proceeding to determine the type and quality of care needed.

Posted in Estate Planning | No Comments »

When you’re drawing up your estate planning documents, your California estate planning attorney will remind you that you need to ensure that you’ve designated the beneficiaries whom you want to receive the assets from your 401(k), other retirement accounts, life insurance policies and annuities with the company or institution where they’re housed. Many people think that just listing the beneficiaries for those assets in their will is sufficient. However, it’s not. The beneficiary designations on those accounts and policies supersede what’s in the will if there’s a discrepancy.

There are some important things to keep in mind when naming beneficiaries. For example, you should name a primary as well as a contingent beneficiary. This will save you having to make a change should your primary beneficiary pass away.

If your children are still young, it’s best not to name them under the assumption that they’ll be grown by the time you die. None of us knows when that will happen. One option is to set up a family trust and make that the beneficiary.

Review your beneficiary designations on your accounts and policies regularly to ensure that they’re still what you want. Some companies will send reminders once a year to do that. Of course, if a situation changes and you no longer want someone to receive your assets, make the change on your accounts and policies immediately. Your attorney can advise you on whether you need to make any amendments to your estate plan.

Each person’s situation is unique. For example, if you are leaving the bulk of your estate to charitable organizations, you may want to set up a revocable living trust and make that the beneficiary on your accounts and insurance policies. There are many options. Your California estate planning attorney can review those with you and help you develop an estate plan that helps ensure your assets are distributed as you choose after you’re gone, with as little hassle and expense to loved ones as possible.

Source: Rocky Mount Telegram, “Things you should know about naming beneficiaries,” Anthony Engrassia, July 15, 2016

Posted in Estate Planning | No Comments »