Millions of people in California employ social media sites to share information and images every day. Beyond the public presence, consumers are also dependent upon online sources for financial transactions that may not be recorded or stored in any other form.

Estate planning attorneys and clients concentrate heavily on tangible asset distribution and protection. A secondary but equally important consideration is how to manage access and ownership of electronic assets, like a Facebook page or an online bank account.

Sensitive information can be stored online today as readily as it was once secured in a lock box or bank in the past. Without a decedent’s legal blessing to access computer logins and passwords, an estate representative or heir may have no way to reach a decedent’s digital property.

The Stored Communications Act prohibits most online information sharing with anyone other than an account owner. Online businesses are not required to open electronic storage vaults, although court orders will let heirs and estate administrators gain access.

Federal and state laws regarding digital property’s use are inconsistent. The conflict over legal guidance forces online companies to maintain rigid access rules. Despite debates over technology and estate laws, an updated version of the Stored Communications Act has not been introduced.

Not all online asset arguments are about property with dollar values. Sentimental worth is also compromised when families are blocked from a loved one’s social media pages. Facebook once deleted accounts of deceased users. The social media site softened its approach by transforming decedent’s pages into memorials.

A wall goes up between online information and the people who need it when an estate owner dies without providing digital property directions.

Governments are slow to enact helpful digital property legislation, but estate planning attorneys can help clients circumvent the problem. Include clear instructions in wills so there are no doubts about who has rights to your online assets after death.

Source: fresnobee.com, “In death, Facebook photos could fade away forever,” Lauren Gambino, March 1, 2013

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California family members come in all shapes, sizes and degrees of closeness. Step relatives, half-siblings and unmarried partnerships are as common today as they were once scarce. Attorneys caution individuals who are building estate plans to be extremely careful when naming heirs.

Wills, trusts and other estate planning documents must be clearly interpreted by probate judges, trustees, heirs and beneficiaries to understand a decedent’s exact, final wishes. A phrase with possible multiple meanings can confuse a court or lead to a legal conflict among loved ones.

A will’s reference to “children” is an example. An individual may use the term collectively to describe biological, adopted, foster kids, grandchildren or stepchildren. A court views relationships from a legal perspective. While biological and adopted children automatically have a legal link to the decedent, other children in a person’s life may not.

For a will to show that heirs include relationships that are not connected by DNA or legal bonds, the reference to an heir must be direct. A document that states that an asset is meant for a stepchild should include the child’s name to erase doubt that the heir is deserving of an inheritance.

Vague language can unintentionally exclude heirs from the proceeds of an estate. A decedent is not present at the time an estate plan is explained to heirs and beneficiaries. It is imperative that the message you want to send is translated properly.

In many cases, a small error in estate plan wording can be corrected by an agreement among other inheritors. Legal experts also say that it only takes one heir’s disagreement to keep such a peaceful resolution from happening.

Individuals with estate plans often spend a majority of the time concerned with the preservation of assets. Estate planning attorneys advise that financial matters should be a high priority, but the language used to transition assets must be precise to avoid any possible conflicts.

Source: nwitimes.com, “ESTATE PLANNING: Planning for stepchildren,” Christopher W. Yugo, Feb. 23, 2013

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If you have a close relative, such as your mother or father, who has recently passed away in the Torrance area, you may be able to claim that you are one of the heirs to the property in the estate. If your relative died without leaving a will, you might still be able to inherit. Simply because a relative does not have a valid will does not mean that you do not have a claim on one’s property.

However, things can get murky when there is no Last Will and Testament. In cases like these, were the decedent is intestate, it usually falls to the state where the property is located to decide who gets to inherit. In other cases, it is the state where the decedent lived at the time of death. As you can imagine, dealing with such an estate can be extremely complicated.

Who can inherit?

In an intestate succession situation, the right to inherit usually falls to the next of kin first and then trickles down to other people who may have a claim. For instance, if the decedent has a living spouse, then he or she will typically receive half of the estate. In cases where there are no living children or grandchildren, the spouse might receive the entire estate. After spouses, living children and grandchildren, the next in line to inherit are usually parents, siblings and then other members of the extended family. In general, unmarried partners, friends and charities are not heirs in the eyes of the court and will not inherit.

What can you inherit?

If you are an heir, you can typically only inherit property that is from the probate estate. This is any property that does not automatically passed to a listed beneficiary, such as one named on a retirement account or life insurance policy. Therefore, if everything the decedent owns has another person’s name on the title as a co-owner or a listed beneficiary, then it is possible that you will not inherit anything.

If you are an intestate heir and think that you have a right to certain property of the decedent, you might be able to claim it. However, you may have to take legal action and fight for your rights in court.

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Legal documents used in estate planning have unique purposes. California advisers usually recommend that everyone creates a will. The same advice may not apply to revocable trusts, depending on individual estate plan desires.

Revocable trusts are most often created to keep estate assets meant for heirs out of probate. A person funds a trust with assets during their lifetime while retaining control of what happens to them.

Assets placed in trusts also tend to reach heirs quickly, since tax waivers are not required before the distribution of inheritances. The ease of asset movement from decedent to heir is especially beneficial for large estates.

Trust terms may be modified. If an individual decides the trust is no longer necessary, the revocability option allows him or her to terminate it.

Income from a trust is taxable to its owner. Assets within the trust are counted as part of an estate. Revocable trusts are also not protected from lawsuits by creditors.

Unlike a contested will in probate, trusts are not public records. Privacy issues are often important to people with significant wealth.

Assets within revocable trusts may be managed by the trustee – the person who created the trust – or co-managed with an agent under a power of attorney.

Extensive planning and a sizeable financial commitment are needed to put together an effective revocable living trust. Added costs include commissions for designated trustees.

Experts say revocable trusts should be used when the expected results are realistically achievable. Otherwise, a trust may not be a wise estate planning decision. Before deciding whether a revocable trust is needed, discuss other estate planning options with advisers to learn what financial advantages they may have that trusts do not.

Retitling and transferring assets into a revocable trust requires a great deal of time. Estate planning attorneys and financial advisers can help individuals smooth the transition and provide effective advice, according to the law.

Source: nj.com, “Biz Brain: The benefits of a living trust,” Karin Price Mueller, Feb. 18, 2013

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Many wage earners spend decades building carefully-monitored retirement incomes while giving remarkably little consideration to beneficiary details. California estate planning attorneys see frustration and anger among heirs when proceeds from a decedent’s beneficiary-related fund end up in the wrong hands.

Time and time again, estate planning experts caution clients to update wills, trusts and investment accounts. The inheritance preparation process is not complete until an individual’s wishes are expressed clearly and consciously in all pertinent legal documents.

Some estate plans focus so hard on the protection of assets that naming heirs and beneficiaries seems like a secondary function. In fact, keeping the channel of inheritance open to the proper heirs is vital.

Forgetfulness is blamed for failing to confirm a beneficiary’s name or neglecting to change a beneficiary after the end of a marriage or the start of a new one. Another costly mistake occurs when a beneficiary dies first. Legal advisers recommend estate plan updates with every life-changing occurrence – birth, death, adoption, marriage and divorce.

What happens when a will is updated after remarriage but an individual retirement account beneficiary is not? A long-past beneficiary decision takes legal precedence. Ex-spouses and their heirs often inherit IRA account funds meant for a decedent’s later spouses and children.

Sometimes an estate is the beneficiary of an IRA account, either purposely or by default when there is no designated beneficiary. Individual beneficiaries can opt to receive minimum distributions or cash out the taxable IRA account – flexibility that beneficiary estates do not have.

Naming an estate as an IRA beneficiary can delay proceeds for heirs caught up in probate and open the funds to creditors with claims against the estate.

Mistakes during estate planning – forgotten beneficiary forms and ignored update to documents – can be avoided with the guidance of an experienced attorney. Individuals should remember that legal advice must be implemented for it to be effective.

Source: foxbusiness.com, “Five Biggest Mistakes Not to Make on Beneficiary Forms,” Shelly K. Schwartz, Feb. 11, 2013

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Many probate laws ensure that surviving spouses and minor children receive an appropriate inheritance from a decedent spouse or parent’s estate, sometimes against the wishes of the deceased. Disinheriting a spouse or child may not be possible when a will is contested because state law protects these rightful heirs.

A California attorney estimates that 30 percent of the wills she drafts for clients contain provisions to prevent some family member from sharing in an inheritance. Not every decision to disinherit a relative is rooted in a family dispute. Sometimes dismissed heirs are wealthy enough without the extra assets that could benefit less-affluent relatives.

Estate planning attorneys are aware that will disputes are frequently caused by hurt parties who think they deserve a share of an estate. Nonadult children and spouses have rights that adult children do not.

While it is permissible to disinherit an adult child, most estate planning attorneys do not recommend it. A contested will may take a long time to resolve, delaying asset distribution to other heirs.

When an adult child’s disinheritance is planned, attorneys suggest couching the words in the will with a language that does not sting. Disinheritance may also be accomplished by keeping a child’s name out of a will. Keep in mind that, during a will dispute, a judge could interpret the missing name as a mistake rather than an intention.

Relatives who are not spouses or young children may also lay claim to a will that does not include their names. A decedent’s parents, siblings and extended family are in line to receive estate proceeds when no spouse or children exist.

As a practical matter, estate planning attorneys suggest creating detailed wills so probate courts are clear about intent. When an estate is sizeable, it is advisable to deflect unnecessary litigation with moderate generosity. Leaving a small amount of assets to potentially litigious relatives often prevents future challenges in court.

Source: cnbc.com, “How to Disinherit Loved Ones-And Which You Can’t,” Feb. 1, 2013

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The advice of a friend or family member can be valuable, but there are times when what’s right for someone else doesn’t work for you. It’s common practice in southern California to ask someone you trust for advice or a referral.

The suggestion is often based on the experience of a relative or friend who used “this” pediatrician to treat a child or “that” lawyer to settle a divorce. A person in search of an estate planning specialist can appreciate a relative’s heartfelt recommendation for a multipurpose attorney. Would that be the right person to handle a special needs trust or complex asset distribution? Probably not.

Any good attorney can help a client create a simple will or trust; however, that’s not such a good fit for people with sizeable wealth, assets, or numerous heirs and beneficiaries.

Estate planning law is not static. Changes in the law or expectations of changes occur frequently. The effects of an estate plan last a lifetime and beyond, while involving people over several possible generations. Assets meant for others require management, protection and tax advice, which not every attorney can provide.

Comfort level is another consideration when choosing an attorney to help create an estate plan. All attorneys are bound by law and Rules of Professional Conduct to keep their dealings with clients private. Since confidentiality is a given, clients often select particular lawyers who make them feel at ease discussing difficult topics.

Death is one of those subjects. A client must feel that an estate planning attorney is more than knowledgeable to establish a relationship. After all, the lawyer may have to learn the family secrets to help a client draft an effective plan – the adult child who cannot be responsible with money or the ex-wife who could inherit a business.

Clients must be satisfied with confiding in an attorney or all the legal expertise in the world won’t help.

Source: nwitimes.com, “ESTATE PLANNING: Feeling comfortable with your adviser,” Christopher Yugo, Jan. 26, 2013

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Britney Spears makes headlines today for very different reasons than she did a few years ago. James Spears, Britney’s father, became his daughter’s conservator five years ago after the singer exhibited bizarre public behavior.

Conservatorships in California are granted through probate court in cases when conservatees are incapable of making personal or financial decisions. Most of Britney Spears’ life decisions have been made by her father. Some observers wonder whether the singer will ever get the chance to take back control.

Thirty-one-year-old Britney Spears recently walked away from a second stint as a judge on the television show the X Factor. During her one-year, $15 million tenure, Spears exhibited qualities that were missing in the days before conservatorship. Some reports say show originator Simon Cowell was disappointed that Spears did not act out in public.

Spears also abandoned her engagement to Jason Trawick. Trawick shared and then resigned a partial conservator role with Britney’s father. Some bloggers’ reports suggest the singer felt her fiancé was acting more of a babysitter than a husband-to-be.

Under conservatorship, Spears is legally incompetent and makes few of her own decisions. Conservatorship proceedings – guardianships for minors — are generally reserved for individuals who have been incapacitated by illnesses, age, injuries or disabilities.

A mental health condition, as Spears has been rumored to have, could make conservatorship necessary indefinitely. Evidence of a positive change in the singer’s demeanor in the last several years has been noted, but no move has been made to end conservatorship.

A California court could place Spears back in charge of her own life. Before that could happen, the celebrity would have to prove that she was capable of taking care of herself and the enormous sums of money she makes from her career.

Becoming a conservator could save a loved one’s life. An attorney familiar with the conservatorship process can advise clients concerned about struggling or disabled relatives.

Source: forbes.com, “When Will Britney Spears Be Free Of Conservatorship?” Danielle and Andy Mayoras, Jan. 14, 2013

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The Taxpayer Relief Act of 2012 was the subject of a recent meeting of estate planners from Los Angeles and across the country. Estate planning specialists spent much of last year bolstering trusts for clients in anticipation of less-generous gift and estate tax changes in 2013. The changes were not as dramatic as expected.

Some of the estate planners admitted spending the last months of 2012 frantically creating tax-free options for wealthy clients. The Taxpayer Relief Act, enacted with the first of the year, put an end to the worry by changing almost nothing about federal estate and gift taxes.

Compared to what might have happened without congressional action, the new tax laws were very much the same as last year’s laws.

Without the Taxpayer Relief Act, the estate tax-free ceiling would have dropped to $1 million per individual, down from over $5 million. For taxable assets, the federal rate might have risen to 55 percent.

The 2013 unified credit – for gift and estate tax exclusions – is $5.25 million per person for assets given away before and after death. The basic exclusion was $5.12 million in 2012. The difference is an inflation adjustment making the tax-free amount essentially the same.

The estate tax climbed from 35 percent in 2012 to 40 percent for 2013, 15 percent less than feared.

Some estate planning clients will take a new approach to asset disbursement, like the opportunity to give away $14,000 per year to individuals without affecting a lifetime tax exemption. Others will turn from heir tax protection to personal long-term planning for later-life needs like health care.

The race to beat the clock ended, not with a blind dive off a steep fiscal cliff, but with an almost seamless transition from one tax year to the next. Legal experts and clients now have the time to devote to full-scale estate planning projects instead of panic-mode measures.

Source: forbes.com, “Morphing Into The New Age Of Estate Planning,” Deborah L. Jacobs, Jan. 15, 2013

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A surprising number of people in California and throughout the country give little thought to long-term financial planning. Young adults may be more concerned with wealth building than wills, trusts and estate administration.

Older adults can be too preoccupied with a career track and parenthood to give serious thought to the possibilities of accidents, illnesses or death. While estate planning is not the most pleasant of tasks, it can provide satisfaction and comfort. When properly portioned assets are waiting for beneficiaries, the giver and heirs are relieved of future stress, lengthy probate and family conflicts over estate uncertainty.

By the time adults reach age 40, there are several financial moves that professionals say can benefit tax situations and family members.

Many adults in their 40s have growing children and have already considered or established college savings accounts like a 529 plan. Parents may think of the educational savings plan simply as a way to lessen their burden or their children’s responsibility for the costs of a higher education. The plans can also provide substantial tax savings and can be used to fund the education of any beneficiary, including a second-career education for a parent.

Financial considerations during the prime of life may also include the needs of aging parents. Elderly parents may have enough to get by during a healthy retirement but could fall short financially if long-term medical care is required. Adult children can ease the strain by investing in medical insurance for parents that would take care of nursing home costs.

The lack of a will gives permission to a probate judge to decide where your assets end up when you die. Even individuals without children might not be satisfied to know a stranger is distributing the assets they’ve worked hard to earn.

Financial and legal professionals discourage procrastination for estate planning. Drawing up a will can help avoid forcing family members into lengthy probate.

Source: businessinsider.com, “Five Smart Financial Moves 40-Somethings Should Do Every Day,” Allison Kade, Jan. 8, 2013

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