New Year’s resolutions are likely on the minds of many California residents at this time of the year. While losing weight and spending less may first come to mind, this may be the ideal time to resolve to revisit estate plans for wills and trusts. A lot of changes can occur during 12 months, many of which may affect estate planning decisions. Events that can prompt changes to beneficiary designations include relocation, marriage and divorce. Birth, adoption and disability may also signal the need for review.

Failure to audit estate planning documents on an annual basis may result in assets being passed to unintended beneficiaries. In too many cases, issues arise during asset transfers after the demise of a close family member. Lack of knowledge about probate and estate administration laws can lead to unintended consequences. Legal counsel can guide individuals through the complicated beneficiary designation guidelines relative to different types of assets.

In most cases, insurance and retirement funds default to a spouse. If a person wants to designate another beneficiary such as a child or grandchild, a waiver may have to be signed by his or her current spouse. Such information is vital when beneficiaries are designated. To avoid family members ending up in court over assets, beneficiaries must be properly documented, and instructions must be explicit. This is especially true for blended families or couples who are not married.

Some assets such as traditional brokerage accounts cannot be designated, and it may be wise to place a Transfer on Death (TOD) registration on them. In the event of the death of both spouses, a brokerage account that is a joint registration will be passed on to designated beneficiaries. There will always be uncertainties, and an experienced California estate planning attorney can help with these tasks and also with designating secondary beneficiaries in the event of the death of a primary beneficiary. With the help of an attorney, revising wills and trusts can form part of anybody’s New Year’s resolutions.

Source: arkcity.net, “Resolve to review and update designations“, Clint Combs, Dec. 8, 2015

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California residents who are not quite convinced of the importance of estate planning may be interested in a lengthy legal battle involving a family in another state. It took as many as 11 different legal actions to ultimately resolve the issues of a couple after 15 years of marriage. Although this case involves a high-net-worth couple, the same circumstances may befall any other married couple, and the lack of proper estate planning can be detrimental.

The argument arose after the 87-year-old husband contracted Alzheimer’s disease and dementia caused him to be incapacitated. The couple had a prenuptial agreement that stated that the wife would get approximately $10 million in the event of the husband’s demise, but nothing if they got divorced. But the stipulation was that the husband had to file, otherwise, she would still get the money.

Although the husband’s attorney filed for a divorce on his behalf, a court determined that his condition prevented him from knowing what he was signing. Ultimately, an agreement was reached in which the man’s children from a previous marriage agreed to give the wife $9.75 million to move on. The agreement also determined the distribution of jewelry, furniture and art pieces, along with their homes in different states.

It was suggested that, had this couple considered the possibility of an incapacitating disease when they did their estate planning, the matter might have been resolved sooner and less costly. An experienced California estate planning attorney can guide couples through the legal proceedings related to wills and trusts and ensure that important issues are addressed. Although it is often a matter rather avoided, preparing for the final stages of the lives of each spouse may provide some measure of assurance and peace.

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Estate planning is as complicated as it is important. Some California residents may not realize that the best practice for effective estate planning requires the building of an integrated team of advisers that are appropriately skilled. It is often believed that property can only be transferred through the probate process after death while, in fact, there are several methods to achieve this. Transferring wealth through beneficiary designations is another mechanism, and it will be separate from probate proceedings.

The involvement of the probate court makes the transfer of property more costly, and it is not uncommon for delays to occur. Unfortunately, beneficiary designations are not always done with the thoughtfulness such an important task deserves. In many instances, beneficiaries are decided upon on the spur of the moment and without much thought related to other estate planning details.

It is also vital for benefactors to revisit accounts with designated beneficiaries from time to time. Situations that might prompt audits of documented beneficiaries include divorces and remarriages, and careful planning is required when blended families are formed that involves a beneficiary. Whenever an individual is asked to appoint a beneficiary, the appropriate action would be to consult with advisers and consider it in conjunction with the estate planning goals as a whole.

California residents who want to ensure their assets are distributed in the most cost-effective manner upon their deaths may benefit from consulting with an attorney who is experienced in the field of probate and estate administration. A lawyer can explain the probate process and may have resources, including financial advisers and other professionals, to form part of a cohesive advisory team. Existing and newly acquired assets can be discussed with the attorney and other members of the advisory team to determine the appropriate manner in which to manage asset ownership and beneficiary designation to coordinate with the estate plan of the client.

Source: Forbes, “Your Will And Trusts Aren’t Enough: Using Beneficiary Designations As An Estate Plan“, Jamie Hopkins, Accessed on Nov. 25, 2015

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Having children often triggers many important life changes and decisions. Many in California, for example, are motivated to go through the estate planning process in order to ensure that their children are provided for if they become unable to do so. However, preparing a will and other important documents may be equally, if not more, important for those who have no children and are not married.

The process for married couples is typically pretty straight forward. Surviving spouses or children are often the beneficiaries of the estate. However, more and more people are choosing to wait until they are older to marry. If they were to pass away without a proper estate plan in place, the state would then determine how their assets would be divided. In the case where they were incapacitated, family members may be left fighting for the power to make medical decisions.

However, creating a will and medical documents allows people to have their opinions heard. While assets can be left to family members, friends or charities, many choose to name a friend or family member who is geographically close to make medical decisions. Even once such documents have been created, professionals recommend that they be reviewed and updated periodically.

To many in California, the estate planning process may seem overwhelming. However, with the assistance of an experienced probate and estate administration professional, the process can be efficiently completed. Without taking this step, loved ones may be left going to court in a time already filled with stress.Taking the time to create a will and name a durable power of attorney can save loved ones from added heartache and expense.

Source: The New York Times, “Estate Planning for the Never-Married“, Fran Hawthorne, Nov. 11, 2015

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Emotions are natural for all human beings. However, emotions can also cloud one’s judgment when making important decisions. This can be a problem when it comes to estate planning for California business owners. Therefore, it is best to keep one’s emotions in check when making business estate planning decisions.

Family-owned businesses can cause emotional responses when an owner dies suddenly without a detailed estate plan. The confusion can leave hurt feelings between children who were involved in the business and children who were uninvolved. Even a will can be contested when a family feels a recently deceased owner of a business was incompetent at the time of a will’s signing.

Unfortunately, problems with emotional responses do not only occur with family-owned businesses. Closely held businesses may have some similar dynamics that can result in conflict following the death of an owner. This may come in the form of disputes between the remaining owners and the decedent’s survivors over the value of the company. A surviving spouse may believe that he or she is not receiving a fair payout from the remaining owners of the closely held company.

Therefore, no matter what type of business a person owns in California, it is best to make sure to communicate one’s estate planning decisions to his or her family, friends and business partners. However, before one does this, it is necessary to decide upon a particular estate planning strategy. Not all estate plans for business owners are the same, and each should be customized to fit individual circumstances.

Source: Forbes, “Don’t Be So Emotional: Drama-Free Business Estate Planning“, Steve Parrish, November 9, 2015

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After the loss of a loved one, it is only natural to feel nervous about matters related to the decedent’s estate and transferring property under the California Probate Code. It may be advisable to gain the necessary knowledge about probate procedures and whether it will be required to go to probate court at all. The need to go to probate court depends on how much money and what type property is involved as well as who will claim the property.

The type of title ownership may determine the need for probate. Property that is jointly owned with the right of survivorship will avoid the probate process because ownership of the property passes to the surviving member of the joint ownership upon the death of the other. When it comes to monetary funds, bank accounts, retirement funds, life insurance and other funds that have designated beneficiaries, the funds may pass to the beneficiaries without going to probate court.

However, there may be exceptions. For instance, while a single person can name any beneficiary, the surviving spouse of a married couple may have some claim on retirement funds. Furthermore, ownership of property or funds after a loved one’s death is not automatic, and there are legal processes for establishing ownership of the property.

Dealing with these legal complexities may be overwhelming for most people. Fortunately, experienced California attorneys are available to provide guidance throughout the probate process. A lawyer can help with handling the legal obligations and duties that may relieve the burden that is commonly associated with finalizing a decedent’s affairs.

Source: courts.ca.gov, “Deciding If You Need to Go to Probate Court and Whether You Can Use Simplified Procedures“, Nov. 4, 2015

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There are many things to think about when designing an estate plan. Much of the focus in estate planning will be on making sure intended beneficiaries are taken care of in California. This may involve creating a trust for one’s heirs. However, many times people will forget about their pets and do not realize that pet owners can create a trust for their pets that they may unexpectedly leave behind.

Failure to consider pets when planning for estate administration can leave one’s pet animals in a bad situation. In animal shelters, many pets end up dying if the animal shelter is unable to find a home for the pet. This danger can be particularly higher if the pet has been afflicted with some type of medical condition.

On the other hand, with a trust especially created for the care of one’s pet, much of these problems can be avoided. This trust will include enough funds to pay for the supplies and services needed to properly take care of a pet for the rest of the animal’s life. The trustee will be in charge of implementing the care for the pet in the case of something unexpected happening to the pet’s owner.

However, just like with any type of trust, a pet trust needs to contain the correct legal language in order to ensure that one’s wishes will be enforceable by law. Failure to do this can result in the trust being challenged in the court of law in California. This can result in unnecessary legal expenses for beneficiaries and can possibly put a beloved pet in danger. Therefore, an understanding of the laws regulating administration of a trust is essential for comprehensive trust planning.

Source: rep-am.com, “Estate planning for Fido Republican American”, Corbie Hill, October 23, 2015

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The problem of locating a recently deceased loved one’s estate planning documents is a significant issue for many beneficiaries in California. Some people report spending many years locating all of a decedent’s various investments and assets. This is why some technology startups have opened up shop looking to provide consumers with ways to digitally store estate planning documents to make it easier for intended beneficiaries.

Although this may seem like an attractive option for some, others are viewing the new phenomenon with skepticism. Much of the criticism revolves around the fact that the niche industry is relatively new and that service providers are usually smaller startup companies. This can be a problem if a smaller startup technology company is bought out by a larger corporation. Customers may have to be burdened with switching over to a new system or possibly somehow losing digital documents in the process.

This is what happened with the startup company Take Estate Assist. The company was recently bought out by a larger company. The company gave customers a 30-day warning for downloading their digital documents. Another problem could occur when a technology startup has to close its doors due to not being able to maintain profitability in a new niche market.

However, whether or not digital estate planning services are right for an individual will depend upon that specific person. Some people are more comfortable with new technology, while others may not be so familiar with computers and the Internet. Also, which estate planning documents should be created will depend upon one’s particular estate planning goals. Therefore, each estate plan, whether digital or not, should be customized to fit individual needs in California.

Source: cnbc.com, “Is a digital last will and testament right for you?“, Constance Gustke, Oct. 19, 2015

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Organization is an essential skill in many aspects of life, such as work and school. However, it is also important in estate planning in California. Keeping estate planning documents in order and in a safe place will be important for the administration of one’s estate. Being organized can help one’s intended beneficiaries avoid significant problems in the future after one passes away.

Most estate planning professionals suggest keeping all important estate planning documents and information in one place, perhaps a single binder or folder. One should ensure that one’s family and loved ones are aware of the location of the estate planning documents. The documents should be safe yet accessible to intended beneficiaries.

After a person has figured out where to keep one’s complete estate plan, he or she will have to decide exactly what documents should be a part of the estate plan. First, the most important legal document in most estate plans is either a revocable trust or a will. This will depend upon one’s own estate planning goals, as well as the size, location and types of assets. Two other important legal documents are a financial power of attorney and a medical power of attorney.

However, not all estate plans are the same, nor should they be. An estate plan should be customized to fit one’s individual estate planning goals. This will vary from person to person in California. Therefore, understanding the applicable estate planning laws and applying them to one’s specific situation is critical in designing an effective estate plan.

Source: thespectrum.com, “Estate planning binder a must have“, Scott Halvorsen, Oct 11, 2015

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A common concern for those looking to plan for estate administration is tax liability. Usually people prefer estate planning strategies that minimize tax liability in order to leave the maximum amount of assets to intended beneficiaries. Therefore, it is best to understand the estate tax laws in order to best take advantage of current rules and regulations in California.

One rule that is designed to help married couples minimize tax liability is the “portability” rule. Usually an individual is allowed $5.43 million in estate tax exemption. This is the value of assets that a person is allowed to pass to beneficiaries without the assets being liable for estate taxes. Before the portability rule, any unused exemption amount was lost, unless the person’s estate utilized trusts to shelter the amount not utilized.

Now with the portability rule, one’s surviving spouse can use one’s leftover tax exemption after one’s death. However, there are some time requirements for obtaining the exemption. One important requirement that many people miss is that the estate tax return needs to be filed within nine months of the date of one’s death. In some cases, an extension for time to file the estate tax return can be granted.

At first, one may decide that this is not necessary since the combined estate is substantially smaller than the exemption amount. However, a surviving spouse’s estate may grow significantly larger. This could result in estate tax liability, which can be avoided through the portability rule.

Therefore, it is always best to play it safe and ensure that one’s intended beneficiaries are fully protected from having to unnecessarily pay estate taxes in California. However, tax issues are just one estate planning concern for most people. One also has to ensure that the assets themselves are properly distributed to intended heirs. Without the correct legal documentation one’s intended heirs may end up losing access to one’s estate assets.

Source: meridianstar.com, “Portability can simplify estate planning“, David Compton, October 4, 2015

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