Those who may be just beginning to think about their estate planning needs may be overwhelmed with all of the technicalities involved. For example, one of the first terms that a person often hears when researching how to plan an estate is “probate,” and many find the thought of the probate process daunting; however, it does not have to be. Many in California may be wondering exactly what probate is and precisely what the probate process entails.

Despite the seemingly complicated terms, the meanings of these terms are not that complicated. For example, one commonly used term in estate planning is “decedent.” Basically, this term simply refers to the person who has died. This person’s estate is the subject of probate proceedings.

The term “domicile” refers to the primary location of residence of the decedent. This is used to establish the proper court venue for probate proceedings. Also, it is important to understand the term “estate,” which simply refers to the property or assets owned by the decedent when he or she died. A “personal representative” is the individual or entity with authority to legally administer the estate of the decedent.

Although important, simply knowing related vocabulary is only the beginning of understanding the probate process in California. Although some of the basic concepts of probate are easy to grasp, actually applying the law to a specific probate case may not be straightforward in many instances. Therefore, it is a good idea to obtain comprehensive knowledge of applicable rules and regulations in order to successfully navigate the probate process.

Source: wealthmanagement.com, “Probate Demystified“, David H. Lenok, Sept. 28, 2015

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Often, married couples designate one spouse to manage and take care of the family’s expenses. This generally includes managing a family’s estate planning needs in California. Once an estate plan is put in place, though, it doesn’t necessarily mean that person’s job is done. If the spouse that did all the planning dies unexpectedly, the surviving spouse may realize that he or she does not know the location of all of the important estate planning documents and information needed for administering an estate.

Therefore, a spouse in charge of the family’s estate administration plan should make sure that all essential financial documents and personal information are organized in some type of filing system. This should include information for various financial accounts as well as contact information to help a surviving spouse or children sort through one’s assets. One should make sure that his or her spouse and children or other beneficiaries know the location of these estate planning documents and personal information.

Also, it’s preferable to make a list of all assets and liabilities and include it with the estate planning documentation. This should include all bank accounts, safety deposit boxes, brokerage accounts, real estate properties and various other assets. Liabilities to detail include mortgages, credit card payments, vehicle payments and any other debts. Along with the list of assets and debts, necessary information — such as passwords — should be included to enable one’s surviving spouse or children to access important accounts and assets.

Even after one has an estate plan in place, it is still a good idea to update one’s estate planning strategy periodically. This will help to address any significant changes to laws affecting estate administration in California. Also, updating one’s estate plan can help in making sure that significant life changes, such as a divorce or adoption, are taken into consideration.

Source: theledger.com, “Estate planning details you may be forgetting“, Peter Golotko, Sept. 17, 2015

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When couples marry, they are usually not concerned with financial matters at first. On the other hand, with their change from single to married status comes some potential tax advantages in California. However, tax advantages do not only apply while the married couple is alive, it also helps as far as administering an estate to beneficiaries in the future. Couples can do this through a smart trust administration strategy.

Each couple is allowed a specific amount of assets to be left to heirs without having to pay estate taxes. This amount, which is now $5.43 million per person, is known as an exclusion. Therefore, both parents are allowed to pass a total of $10.86 million worth of assets to their children.

In the past, one would have to spend time deciding what asset would go into which trust. Usually, couples would set up two trusts right at the beginning of a couple’s marriage. This allows the couple to pass along twice the amount of assets to beneficiaries without tax liabilities.

However, the Internal Revenue Service has eased its restrictions by adding the portability rule. This allows a surviving spouse’s trust to utilize any unexercised portion of a deceased spouse’s exclusion. Many married couples are now looking to take advantage of this rule change and simplify their estate plan.

On the other hand, trust administration may still be complicated in some cases in California. Therefore, it is best to first research the rules and regulations governing trusts in order to ensure one’s estate planning goals are met. Additionally, one never knows when lawmakers will decide to change the rules regarding trusts and estate plans, which means one should periodically update one’s estate planning strategy.

Source: ustoday.com, “Your estate plan: Be aware of new laws“, Joseph A. Clark, September 13, 2015

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Communication is important for any area in life. It is particularly important when it comes to estate planning in California. Failure to communicate with family members and intended beneficiaries can result in future problems.

One common mistake is when people decide how they would like to have their assets divided without consulting with intended heirs. Many times a specific amount of assets is donated to charity as well as other family members and friends. The remainder of the assets is then generally divided equally among a person’s children. This may result in an estate plan that works for everybody; however, sometimes it can cause problems for heirs.

These types of estate plans have failed because the estate planning strategies have not factored in what beneficiaries actually prefer to receive. This often leads to conflicts among one’s children. For example, if one decides to divide the ownership of a vacation home among one’s three children, one child may actually be estranged from his or her siblings. However, this child is now burdened with paying property taxes on the jointly owned real estate property.

Also, it is important to not procrastinate in having this conversation regarding estate planning with one’s children and intended beneficiaries. Life can offer many surprises, and no one in California or elsewhere ever knows when his or her passing may occur. This also means that even after an estate plan is in place, one should periodically update one’s estate plan in order to conform with the changing desires of one’s intended beneficiaries.

Source: itemonline.com, “Why should you work on your estate plan now?“, Brian Vnak, Sept. 2, 2015

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When playing sports, it is important to understand the rules to the game in order to win. The same is true for estate planning in California. It is essential to understand the relevant rules and regulations when planning an estate. All legal documents of an estate plan should reflect these applicable laws in order to ensure that one’s estate planning objectives are met.

One of the first things that people should research is the rules regarding life insurance policies. Most people may not understand exactly how tax laws affect life insurance benefits. One aspect that is not commonly known is that who owns the life insurance policy and for how long can make a difference in how the policy is taxed during the estate administration process. The proceeds from a life insurance policy can be included in one’s estate for purposes of estate taxation.

These tax rules are in place regardless of the designated beneficiaries listed in a life insurance policy. However, if one decides to transfer ownership of the life insurance policy more than three years prior to one’s death, the life insurance benefits will not be included in one’s gross estate for estate taxation purposes. The ownership of the life insurance policy can be transferred to another individual or even a trust. Making this timely decision to transfer ownership can save one’s intended beneficiaries from having to pay significant estate taxes to the government.

On the other hand, estate planning will also involve more than just dealing with one’s life insurance policy in California. There are various other things a person can do to help to minimize estate tax liability. However, this will require thorough knowledge of applicable estate planning and tax laws and then understanding how these laws apply to one’s specific situation.

Source: eastvalleytribune.com, “Financial Focus: Maximizing the estate planning value of life insurance“, Phil Hotchkiss, Aug. 31, 2015

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Artistic endeavors are not generally thought of as big money makers in California. On the other hand, in rare instances, some artists become highly recognized in their field, causing the prices of their pieces to be valued at high price points. However, if the artist does not have proper estate planning in place, this can result in a lengthy and contentious probate process following his or her death.

It turns out that one world-renowned street photographer, Vivian Maier, had failed to do any estate planning, which has made administering her estate a challenge. This has caused the probate process to become increasingly contentious. The ownership of copyrights to the street photographer’s images are valued at millions of dollars.

The search for the photographer’s next of kin focuses on her mysterious brother, Charles. The photographer’s brother has been a mystery for those looking into the case. Apparently, it was not even known if he was still alive. Even his exact age is unknown to investigators at this time. There is some speculation that Charles may have married.

The brother’s death certificate was discovered; however, the document, which will reveal his true birth date and possibly whether or not he had any children, is sealed from the public until 2017. On the other hand, it is possible for the death certificate to become public record by having it subpoenaed in the ongoing probate court case. The death certificate may provide the necessary information to allow proper distribution of the photographer’s estate.

The probate process in court is sometimes not that straightforward. Therefore, it is best for those involved in any probate litigation in California to be knowledgeable of the correct court procedures in order to go through the process as efficiently as possible. Also, if the case is contentious, it will be essential to understand all of the applicable laws in order to present a legal argument in the court of law if it becomes necessary.

Source: bendbulletin.com, “Hunt for heirs comes amid court fight over photographer’s collection potentially worth millions“, Jason Meisner, Aug. 25, 2015

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Life is constantly in flux and is always changing. Therefore, people are always adjusting and adapting to their particular situations in California. This also means one’s estate planning strategy may require changing and adjusting occasionally in order to adapt to significant life changes.

One common life change that requires re-examination of one’s estate plan is a change in marital status. Without a solid estate plan, it may be possible that one’s spouse will not be considered the sole beneficiary for one’s estate despite this being a person’s intention. Also, remarriage can also affect whether or not intended beneficiaries will be able to obtain their fair share of assets. Some may not want their former spouses to receive any assets, while others may want to preserve the share of assets to be inherited by former spouses.

The birth of a child is also another important life change that should be considered when updating an estate plan. Not only should one ensure intended assets will go to his or her children, it is important to ensure that the children will be cared for by intended guardians in the case of something unexpected occurring. If one fails to do this, it could result in one’s children being cared for by guardians that one would not have found acceptable.

However, it is important to put one’s significant life changes in the proper and current legal context. Many times estate planning laws change in California. This means it is important to make estate planning decisions based upon the latest relevant laws. Therefore, even if one does not experience a significant change in one’s individual circumstances, changes in the law can also prompt the need for an estate plan update.

Source: The Huffington Post, “9 Life Changes That Require An Estate Plan Review“, Steve Cook, August 17, 2015

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Today, estate planning is significantly different from the way it was a few decades ago. Much of this is due to huge technological advancements in computing that has reshaped practically every aspect of society, including estate planning in California. However, many people are still forgetting to take into account digital and electronic assets when they are planning how they would like their estates administered.

Some of the electronic assets that people commonly forget about include website domain names and the various email accounts a person may own. Also, social media accounts, such as Facebook, LinkedIn and Twitter, are considered private property and are, therefore, part of the estate. Additionally, financial accounts may also utilize website accounts in order to store one’s financial and personal information. All of these types of digital assets and accounts need to be addressed in an estate plan.

It is important to leave instructions about how one would like these electronic assets to be accessed and distributed in one’s estate plan. If there is nothing of value in one’s email account, it is likely a person will not have to do anything, and the email account will eventually be deleted by the account provider. However, if there are items of emotional and financial value, one should ensure that intended beneficiaries have access to the digital assets.

This can be accomplished by making a list of assets in one’s will or trust, including passwords, account names and other important information. One should also include directions for what one wishes to be done with these accounts. This should include exactly which individuals will have access to and control of specific electronic assets. Some people keep all of this information in a flash drive or on some other type of information storage device.

On the other hand, since the law is slow in catching up with the latest technological advancements, there could be some issues that are not clearly defined under California law. Therefore, careful research into the applicable laws is essential in creating an estate planning strategy regarding electronic assets. Also, estate planning laws pertaining to digital assets can change on occasion, which means that one’s estate plan will need to be regularly updated to reflect these changes.

Source: yumasun.com, “Estate planning in the electronic age“, Shawn Garner, August 11, 2015

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One never knows what is going to happen next in life. At any point, a person can become incapacitated unexpectedly. Of course, in a worst case scenario, a person can suffer a sudden death. Incapacitation and death are two reasons why it is important for California residents to not procrastinate when it comes to drafting estate planning documents.

One of the most important estate planning documents is the will. This document enables a person to direct how his or her assets should be distributed in the case of his or her death. A will enables a person to give his or her assets to his or her children or intended beneficiaries based upon their financial needs or even irrespective of their financial situations. The will can even restrict the use of inherited assets, while also protecting inheritances from creditors.

On the other hand, estate planning is not only about what happens when a person dies, but it is also about what happens when a person becomes unable to make decisions for him or herself. This is where a power-of-attorney document comes into play. This legal instrument allows another person, of one’s choosing, to make financial decisions when one is unable to do so. A medical power-of-attorney document allows a person to make medical decisions on another person’s behalf.

It is important to remember that it is imperative to have the correct legal language in the estate planning documents. This can prevent these documents from being challenged in a California court. In the end, ensuring that estate planning documents are in place and legally sound will prevent intended beneficiaries from having to deal with a prolonged probate process during an already emotionally stressful time.

Source: The Huffington Post, “4 Estate Planning Documents Everybody Needs“, Steve Cook, April 10, 2015

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Every person is different and with varying individual life circumstances. Estate plans should reflect this. Estate planning strategies should be highly individualized and customized to fit a person’s specific situation and estate planning goals in California. However, there are some specific estate planning documents that are standard for most individual estate planning strategies.

Usually, one of the more important of these documents is a will. This estate planning instrument directs how assets are to be distributed to intended beneficiaries. Even if one does not wish to use a will as a primary method for asset distribution, it is still a good idea to have one in order to deal with any leftover assets that need to be distributed.

A living will is another essential estate planning document. This legal instrument enables one to direct what methods medical professionals should utilize in order to preserve one’s life in the case of incapacitation. Also, in the case of incapacitation, it is necessary to prepare to take care of one’s financial affairs. A general durable power of attorney will enable another person to handle one’s financial decisions while one is incapacitated.

All of these legal documents and instruments should be considered when creating an estate planning strategy in California. Some of these are essential for an effective estate plan. However, each individual person will have varying estate planning goals that will influence which documents will be used and how they will be drafted and implemented. Understanding the relevant laws pertaining to estate planning is helpful.

Source: valdostatoday.com, “Estate Plan Fundamentals: Documents and Differences”, Bob Lambert, July 28, 2015

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