Estate Planning + NBA Finals = Perfect Match

MVP

You are the real MVP! Go out and live your legacy!

Hey there! 

I was watching Game 4 of the NBA Finals on Friday night and listening to all the players getting interviewed. It got me thinking.

Thinking about life.

Thinking about showing up.

Thinking about “letting the game come to you.”

That game, of course, being life.

The key to the game and getting to the end, is to enjoy the process. We are all going to die. No one is getting a free pass. So, why not make the most of your life? Why not do what you’ve always wanted?

Go out and find the game’s rhythm. Your rhythm. Live your legacy. Say yes to life. Take a risk.

But also show your team you’re reliable- someone they can count on. Be someone your family can count on. Create an estate plan that will be beneficial to your family. Let them know they can count on you even if you’re not around.

By planning and living a life you love, you create lasting memories for your friends and family. You’ll be protecting both their heart and their mind.

So, go out and be the Steph Curry of your life, because you are the real MVP!

xo

Carmen

P.S. Go Dubs!

Summer is coming + my 3 part series on estate planning

Hey There! 

Are you as excited about summer as I am!?! I can’t wait for beach days, floppy hats and bermuda shorts! Ice cold lemonade and barbecues with loved ones.Summer vacation….:sigh:

And, back to reality…..and my office (for now).

This weeks newsletter is about something fun I’ve been doing. I wanted to let you know about a 3 part series I’ve been running on Facebook LIVE this week called “WTF……..” It’s a series to help answer questions about estate planning, probate and its a way to make talking about death less taboo.

In this series I focus on explaining what important documents you’ll need and how they can keep you out of probate.

BUT my real hope is…… that more people will start to think about estate planning.

Estate planning isn’t all about you- its really about your loved ones. The people you leave behind and the legacy you’ll be living.

That’s why TOMORROW 6/9 at 9am pst in Part 3 of this series, I’ll be talking about how to not be afraid….

Not be afraid to talk about death.

Not be afraid to take risks.

Not be afraid to shy from what it it you think you “should” be doing.

I’m going to talk to you about how we need to start living more- each and every one of us!

I really hope you’ll join me! And in case you missed Part 1 and Part 2, I’ve included the videos at the bottom of this email.

If you want me to answer a question while we’re live tomorrow all you have to do is reply to this email or send me a Facebook message.

Bonus: If you know someone who could benefit from these informational videos, please SHARE! Sharing is caring!

xo

Carmen

P.S. I love mail! Have burning questions? Want to discuss something in I put in the Newsletter? Hit reply and let me know what’s on your mind!


Part 1 was about estate planning and all the different documents that can make up an estate plan. You can take a look at it below


Part 2 I did this morning on Probate and how that whole process works. In case you missed it, here you go

Entity, Shmentity….What’s the big deal?!


Hey Sunshine! 

We have been getting A TON of business questions lately and since we not only protect your family/kiddos we figured what better time than now to chat about your business?

So, what the hell is “entity formation” anyways?

Welp it’s one of those boring legal/business words we like to use to describe the type of business you’re running.

There are three {main} types- Sole Proprietor, LLC and Corporation

Now this is when you say to yourself “Why do I care? My business if running fine just the way it is.”

And chances are if you don’t really know what an LLC or a Corporation are, you’re probably a sole proprietor. This could be costing you big time at tax time and could be putting your family’s hard work at risk. Just saying.

Let me help you out and break down the deets for you.


Sole Proprietor = You = Your Business

When you die, your business dies. You ARE your business. Literally. It’s you, your name, and whatever you’re selling. There’s no relationship with the state. You don’t have any special business tax ID because you use your social security number. You don’t have to file special taxes because you do what you’ve been doing all along and just file your personal taxes (and add on a Schedule C, of course).

That’s pretty awesome right?!

Well, guess what- being a sole proprietor has absolutely no liability protection. So your business debts are your debts. Owners are UNLIMITEDLY Liable.

Scary, huh! {See I told you you’d want to know about this!}

Limited Liability Company (LLC)

 

A LLC will give you the protection that a sole proprietorship doesn’t but you MUST have separate bank accounts for your business and personal funds. You’ll also have a franchise tax payment of $800 EVERY year no matter what (in California anyways). And you’ll also have to prepare some documents for the State.

In terms of taxation, you get taxed like a sole proprietorship, LLC or S-corp- you get to pick. It’s a buffet of entity selections.

This one’s good for limited paperwork but good liability protection.

Corporation

 

Last but definitely not least, is the Corporation. It’s one of the oldest and most “prestigious” entities- probably because it offers the most protection and flexibility. Buuut along with that comes a lot more formalities.

A corporation whether it’s an S-corp or a C-corp requires the most paperwork of all. It also requires annual meetings, a Board of Directors, minutes of the meetings and Officers. The good news is this Board and Officers can all be ONE person.

So form a Corp and have a meeting with yourself. Why not?

And you want know the difference between and S-Corp and C-corp? An S-Corp has an additional form to complete but the biggest difference comes into play at tax time.

Be sure to talk to your tax guy/gal to make sure you’re saving as much moolah as possible!


Well that’s it peeps. Hopefully you didn’t get too bored {yawn}. I know this isn’t the most glamorous topic and it can be a little scary, but it needs to be discussed. This will be key in protecting your business ASSets and ultimately whatever you leave behind to pass on via your estate.

But you know that’s what we’re here for! We handle the boring legal stuff to protect what you love the most and give you peace of mind so you can continue being the badass we know you are!

Have a great rest of the week!

 xoxo

Carmen

P.S. We will be moving our weekly posts to MONDAYS! We can all use a little Monday motivation.

P.P.S. Have burning questions? Want us to discuss something in our Newsletter? Simply respond and let us know!

 

Happy Earth Day!

Earth Day 2016Hey there mama!

What does Estate Planning have to do with Earth Day you ask? Well, lemme tell you!

If you’re an “environmentalist” or you “go green”, you can choose to donate a portion of your estate to a charity that supports your same beliefs.

 This allows you’re legacy to continue on via a charity you love. The charity will thank you and so will Mother Nature 🙂

P.S. We go green by providing digital copies of your estate plans instead of numerous paper copies!

What a living trust DOES NOT do for you

Chaos Planning

There are so many benefits of a revocable living trust that people sometimes think it will do everything they want. As you know by now, one of the biggest benefits of a revocable living trust is avoiding probate. Here are four things a living trust DOES NOT do.

  1. It does not control medical decisions. A living trust is not the same as a living will. Although the names are similar and they are both legal documents, they do very different things. A living trust lets you keep control of your assets. A living will lets you keep some control over medical decisions, but it is very limited—it only lets others know how you feel about life support in case of terminal illness. A better document is a health care power of attorney (also called an advance directive or health care proxy). This lets you give legal authorityto another person to make all health care decisions for you if you are unable to do so.
  2. It does not protect your assets from creditors while you are living. Because a living trust is revocable (meaning you can change or cancel it), you still have control of your assets and have access to them at all times. Even the IRS considers a revocable living trust to be a “non-event” because you can put assets in and take them out at any time. If you still have access to your assets, so do your creditors. However, after you die, assets that remain in your trust for your beneficiaries are protected from their creditors, including divorce proceedings. If you are concerned about asset protection, talk to your attorney as soon as possible about your options.
  3. It does not help you qualify for Medicaid (or other government medical assistance). Medicaid is a federally funded health care program that was created primarily to provide health care services for the poor. It also pays for an unlimited number of days of nursing home care, which makes it appealing to some people who are not poor. To qualify for Medicaid, you can only have a limited amount of assets and receive a certain amount of income. Some people think putting their assets into a revocable living trust will help them qualify for Medicaid because the assets are no longer titled in their individual names. But because a living trust is revocable, you still have control of your assets and have access to them. As a result, assets in your living trust are “available” and counted if you apply for Medicaid—so transferring your assets to a living trust will not help you qualify for Medicaid. If you are interested in qualifying for Medicaid, talk to an attorney who specializes in elder law and Medicaid matters.
  4. It has no effect on your income taxes. You must still report any income you earn each year and pay any taxes due on that income. As long as you are living, you continue to use your own social security number and file the same income tax returns. (A separate tax identification number and separate tax return for your trust are required only after you die.) Some irrevocable trusts may be able to save income taxes. If you are interested in this, talk to your estate planning attorney.

“A Good Plan Today is better than a Perfect Plan Tomorrow” 
– George Patton

Annoying (but Required) Disclaimer: This blog is a resource guide for educational and informational purposes only and should not take the place of hiring an attorney. No information on this blog creates an attorney-client relationship between us. If you would like to hire an attorney, you can give us a call at (650) 503-3770.

Create an “Estate Plan” for your Business

You’ve created a business. It’s booming. It’s growing. It’s flowing. It’s doing everything you expected it to do PLUS more.

So, now what?

Well first thing’s first (bust out into Iggy Azalea’s Fancy…j/k….sort of) I digress. You want to PROTECT that business and make sure it keeps raking in that moolah even when you’re not around to manage. Whether you want your loved ones to sell it for a pretty penny or keep managing it, creating a succession plan or an “estate plan for your business”, you will need something in writing.

Did you know family businesses make up 50% of the GDP in the United States? Yup. If you are part of that 50% you want to make sure you family knows what to do.

Take the next 5 Steps and you’ll be on your way

Step 1: Establish Goals & Objectives 

  • Think about your desired goals and how reasonable they are.
  • How heavily do you want your family involved in leading and owning the company? Or do you want them to have the option to bring in professional management?
  • Identify goals of next generation management, both personal and business.
  • Identify and get a team of professional advisors.

Step 2: Establish a Decision-Making Process

  • What’s the process for involving family members in decision-making?
  • Dealing with disputes?
  • Put all those processes in writing!
  • Let you family/stakeholders know about the processes.

Step 3: Establish the Succession Plan

  • Identify successors – who is in charge after you- both managers of the company and owners of the business.
  • Identify active and non-active roles for all family members.
  • Identify required additional support for the successor from family members.

Step 4: Create a Business and Owner Estate Plan

  • Consider taxation implications to the owner/business upon sale or transfer of ownership, death, or divorce.
  • Review owner estate planning documents to minimize taxes and avoid delays in transfer of stock to remaining owners or spouse.
  • Create a buy/sell agreement that is fair, reflective of the value of the business, and that will help minimize taxes

Step 5: Create a Transition Plan 

  • How will the business transition? Gift? Outright? Sale? A combination?
  • If the business is to be purchase, consider financing options including financing from an external party or self-financed from the retiring owners on a deferred payout basis.
  • Establish a timeline for implementing the new plan.

If you haven’t already, sign up for our newsletter so you never miss a beat!

What happens when you’re incapacitated?

If you are suddenly in a car accident or have a life altering event that leaves you mentally unable to make decisions or physically unable to care for yourself, who will take care of you?

If there are no legal documents in place, it could mean long and drawn out court proceedings for your loved ones.

So what can you do to prepare for an emergency? Have a Durable Power of Attorney, Advance Health Care Directive, and Guardianship Appointment in place. But, what are those?? I’ll tell you.

Durable Power of Attorney
A durable power of attorney allows you to appoint someone to make financial decisions for you- whether it’s dealing with the mortgage company, a bank, or your internet/cable provider. You get to decide in advance how much power that individual has over your finances and your estate as a whole.

This document can become effective immediately or it can wait until you are incapacitated- so whether you’re traveling out of the county or end up in an emergency situation, your finances can be taken care of.

Advance Health Care Directive
An advance health care directive is just that- planning in advance for health care issues. You get to decide who you would entrust to make medical decisions for you. Who would carry out your wishes? Who do you know would not go against what you stand for in terms of medical decision making? This document allows you to pick the perfect person to act as you would in determining what happens with your physical body.

Guardianship
Since you have minor children, you also want to make sure your guardianship documents are up to date. Even if this incapacitation is temporary, you don’t want to risk sending your kids off with strangers during an already emotional time for them.

Ready to start designing a plan in case of emergency? Start focus on living by having peace of mind knowing your loved ones are taken care of, just in case. Call our office or email us today!

Transfer on Death Deed

New year, new perspectives, new goals. Time to focus on what’s ahead, setting forth to action all plans made in previous years. California is doing just that. As of January 1, 2016 a new law has been implemented that will make it easier for owners to pass real property to their beneficiaries, thus avoiding the probate process (which can be a costly and time consuming).
This new law creates the revocable transfer on death (TOD) deed which allows homeowners to transfer real property to named beneficiaries after death without a probate. Existing law states that a person may pass real property to a beneficiary, at death, by various methods including, will, trust or owning the property in joint tenancy with another person or persons. Because the deed does not take effect until after the death, homeowners do not need to worry about losing the rights of ownership to their home. This law also establishes a process for contesting the transfer of real property by a revocable TOD deed.
In order for a revocable TOD to take place, it must be signed, dated and acknowledge by notary public. It must also be recorded within 60 days of execution. While the transferor is alive, they can at any time revoke the deed in the following manner: complete, have notarized and record a revocation form (the law creates a statutory form for this purpose), create, have notarized, and record a new TOD or sell or give away the property, or transfer it to a trust, before your death and record the deed.
TOD may not be the best choice for everyone. Some are hesitant of the drawbacks of a TOD deed. Although it is seems to be a more simple choice, this simple document is an easily contestable (within 120 days) trust where individuals contesting lose all their trust. For example, a person can challenge the effectiveness of the deed if arguments made prove that beneficiaries lack the capacity to take on the real property. Another drawback is that of fraudulent conveyances or elder abuse. The California Land Title Association and the California Escrow Association believe that the elderly may become victim to fraud through such a basic document where third parties can easily deceive the elderly or the uniformed. Also, selling the property is not possible until 4 months after the owner’s death. In this case, a TOD may not be the best choice if the beneficiary needs to sell the property soon after the owner’s death.
Unless otherwise stated by California Legislature, the law will be in effect until Jan 1, 2021. During this time California Law Revision Commission will be monitoring whether or not the deed is working effectively, or if any revisions/changes need to be made. But don’t worry; all TOD’s made prior to the end date will be considered valid in the state of California.
If you would like more information on a TOD deed or find out if it’s a good option for you, call our office at (650)503-3770 or send an email at carmen@carmenrosaslaw.com.

Super Bowl + Incapacitation

In honor of the Super Bowl, I thought we would talk about football! Although not directly related to incapacitation or the two teams playing in the Super Bowl this weekend, this NFL story is a good example of what could happen when your loved one becomes incapacitated.

Arizona-Super-Bowl-2015Tom Benson Jr., owner of the New Orleans Saints (and other businesses) announced that he would be changing his estate plan to transfer his rights to his team to his third wife. The move effectively cuts out his only surviving child, daughter Renee Benson of the San Antonio area, and her two children from inheriting his business operations.

Benson’s daughter and her children filed a law suit claiming that Benson does not have the capacity to make any changes and claims that his prenuptial agreement with his current wife dictates where the rights should go.

You can read more about what’s going on with Benson and the argument for his incapacitation here. After all, living off on candy, ice cream, sodas, and red wine is a dream for most!

If you have a loved one who is making changes to their estate plan and there is a concern regarding their ability to make decisions, be sure to have them see their physician and explain to their lawyer what’s going on. If changes have been made, it may be possible to have those changes deemed invalid. Talk to an attorney for advice.

 

Giving Thanks for YOU!

Thank you to You- our dedicated reader!

I would like to wish you and your family the happiest of thanksgivings. There is much to be thankful for and I am truly thankful for you- for your continued support of my business and for your presence in my life. Remember to take a moment to express your gratitude for the loved ones around you and celebrate the time you have together.

thnks