Time flies……

….when you’re having fun!

Hi and Happy February!   february

I cannot believe how quickly time has flown. It’s been almost a month since my last post and I promise to keep in touch more! We have been busy with new estate plans and planning tricks and tips for our clients. On top of that we have been busy out in the community.

Not sure if I mentioned it, but I was elected president of the Santa Clara County La Raza Lawyer’s Association. I was so honored to be nominated and know I have some big heels to fill. If you don’t know much about the organization, visit our website www.scclarazalawyers.com and see what new and exciting events we have going on.

In addition to that, two of my estate planning articles were published in an online magazine and I am in the process of writing a third article for another online magazine! The articles are here– take a look and please let me know your thoughts!

Well, just wanted to check in with you and give you an update. I will also be sending out my Valentine’s Day Newsletter this week so stay tuned!

If you do not yet have an estate plan, have questions or need help with a trust administration or probate proceeding, schedule your  30 minute complimentary strategy session. Simply schedule your call on our website contact page or simply click this link!

 

What is a Trust?

A trust is simply a contractual arrangement between three parties – the Trustor (aka the Grantor or the Settlor), the Trustee and the Beneficiary – which specifies the rights, responsibilities and obligations with respect to assets that the Trustor has transferred to the trust and that should be distributed to the Beneficiary.

Trusts can be revocable or irrevocable. A revocable trust means that it can be changed/amended during the Trustor’s lifetime. An irrevocable trust cannot be changed. A revocable trust, depending on the language can become irrevocable immediately upon death.

Trusts help to avoid Probate upon death and Conservatorship during the lifetime. In addition, trusts can accomplish a variety of objectives when planning an estate:

  • Minimize estate taxes
  • Hold assets for minor, disabled, or financially irresponsible beneficiaries.
  • Create flexibility in estate planning for couples in a second marriage.
  • Living TrustProvide asset protection and divorce protection for beneficiaries of the deceased.

The next question is DO I NEED A TRUST?

Well if you answer “yes” to any of these questions, you should consult an attorney to figure out whether or not a trust is the right move for you.

  • Do I have minor children who I wish to provide for at my death, but yet delay distributing money to them until they are older so that they are better able to handle the money responsibly?
  • Do I have an adult child who is disabled or incapable of handling his finances?
  • Do I have a child with a drinking, drug or gambling problem?
  • Do I have an adult child with an untrustworthy spouse?
  • Do I have a child who is so successful that he will be subject to his own estate taxes?
  • Do I have a child who is in a business or profession potentially subject to personal liability?
  • Am I divorced and do I have minor children?
  • Am I re-married and have children from a prior marriage?
  • Am I concerned about the privacy of my affairs and the affairs of my heirs after my death?
  • Am I concerned about the costs and timeliness of concluding my affairs after my death?
  • Do I own real estate located in a state other than the state in which I reside?
  • Do I trust the federal government to continue to allow a couple to transfer $10.5 million of assets at death without paying federal estate taxes?

If you want to know more about the Top Estate Planning Documents check out our old post here.

Want to know more or set up a plan? Give us a call.

Prepare for the unexpected

As many of you have heard, actor James Gandolfini passed away Wednesday, unexpectedly. CNN reports that the cause of death is unknown but his managers say it may have been the result of a heart attack. Gandolfini was a great actor and his loss is shocking to people everywhere.

When someone passes unexpectedly, it can be a very traumatic experience. There is no real chance to say your “goodbyes” or even “prepare yourself.” For this reason, it is important that you and your family have an estate plan that prepares you for the unexpected.

Some points to consider:

  1. Gandolfini left behind a wife, young child and a son from a previous relationship. Without an estate plan, Gandolfini’s property will likely go to his wife and could ultimately leave his teenage son with nothing. If you are part of a blended family, this is something you should consider.
  2. Death or incapacity can happen at any time. Be sure you plan and prepare your family to handle your affairs when you no longer can.
  3. Create a plan that ensures your wishes and desires regarding your property and your remains are followed.

If you would like more information on how to create an estate plan, contact our Redwood City Estate Planning Attorney for assistance.

Keeping Gandolfini’s family in our thoughts and prayers as they mourn their loss.

Your Nest Egg vs. Your Children’s Education

As many of you know, I am a HUGE (did I mention HUGE?) advocate of proper planning- whether it’s estate planning, financial planning, party planning or vacation planning. Yes, I am that person who creates an itinerary for a family vacation!

Recently, I was asked by a client about how she should start saving for her retirement while also saving for her children’s education. The conflict usually arises from the lack of financial resources to do both all while still funding daily living expenses. This client isn’t alone.

Parents become stuck between priorities and usually wind up doing nothing at all. Now, I am not a financial planner (I can refer you to one!), but I do assist my clients with sorting out their priorities to they can come up with a plan to support their family in the future.

Here are some tips to how to find a balance between saving for your retirement, having an emergency fund and saving for your children’s education.

BUILD AN EMERGENCY FUND FIRST

An emergency fund is that money you have saved for a “rainy day.” This fund should be about 3-6 months worth of expenses and used for emergencies. If you don’t have this saved, you may be required to take a loan from your 401(k) or take a personal loan. These options may subject you to penalties and taxes, which end up costing more.

SAVE FOR YOUR RETIREMENT

Once you have your emergency fund, you should begin saving for your retirement. Parents are often concerned about being selfish because by saving for retirement, they are not saving for their children’s education. This is actually the opposite. If you don’t have a retirement savings, when it is time for you to retire and your children have their own families, you won’t have any money to take care of yourself. You will then become dependent on your children to take care of you and add to their own expenses. There are student loans, scholarships and grants available for your children’s education. There are NO loans for retirement!

SAVE FOR YOU CHILDREN’S EDUCATION

This is the LAST step. Once you have your emergency stash and a growing retirement fund, THEN you can start funneling some money into your children’s education fund. If you invest in a 529 college savings plan, the earnings grow tax-free. AND, other people in your child’s life — like grandparents, godparents and generous aunts and uncles — can contribute as much as $14,000 per year (annual gift tax exclusion for 2013) to a child’s 529 plan.

If you would like to set up  a time to meet with us to discuss your plans for the future, feel free to call us at 650-503-3770  so we can sit down and chat. And because we know how important this planning is for our clients, for the first two people to call our Redwood City Estate Planning Attorney, we will give away a FREE consultation (valued at $400)! Call now and schedule your appointment- When scheduling your appointment, don’t forget to mention this post!

Don’t be a Fool this April- Plan ahead!

1300137640fZ1a4THappy April Folks!  We hope everyone enjoyed their Easter holiday (if it was celebrated)! Our office has been busy assisting clients with estate planning issues, probate hearings, child visitation modifications, writing a new e-book, working on an “Estate Planning 101” Basics seminar, working on our Vlog  and podcast series, and revamping our website! So we have been just a little bit busy!

How have you been? Have you been busy and completing your Estate Planning Homework Assignments? Have you made an appointment with an estate planning attorney in your area? (We have experienced estate planning attorneys in California, specifically Redwood City and San Jose AND we have a virtual law office to serve the rest of California 🙂 ) Are you just starting assignment #1? Don’t wait too much longer- you don’t want to be the April Fool who waited too long to create an estate plan (insert fake laugh here!).

So as promised here is some discussion about one of the Must Have Documents– a will. This scenario can apply to individuals either in their first, second or third marriage, or just have children from previous relationships; It can also be considered where there are issues of separate property and inheritance.

WHAT WILL YOU PICKReciprocal and Non-Reciprocal Wills

When thinking about your will, decide whether you and your spouse will execute reciprocal wills. Reciprocal wills are wills executed by husband and wife, which are exactly alike. This means that each will leaves the same asset(s) to the same person(s) in the same proportion. For example, Jane and John, each on their second marriage are married to one another, and each has one child from a previous marriage. They both execute wills, which leave everything to the other, and in case the other is deceased, one-half of the estate to Jane’s child and one-half to John’s child. Some things to keep in mind when deciding whether to execute reciprocal wills.

When executing RECIPROCAL wills, your spouse is free to change his or her will at any time. For example, John and Jane, each on their second marriage are married to one another, and each has one child from a previous marriage. They both execute wills, which leave everything to the other, and in case the other is deceased, one-half of the estate to Jane’s child and one-half to John’s child. Jane dies, and John inherits the entire estate. He then may change his Will to leave the entire estate to his child, and disinherit Jane’s child.

When executing NON-RECIPROCAL wills, you will need to determine what assets belong to each of you so that there is no confusion about what property each party may leave to his or her heirs. If you experience any difficulty reaching an agreement concerning ownership of your property, a pre-nuptial agreement or your state’s marital property, laws may dictate ownership of some or all of your property for you.

Your spouse is not required to inform you of changes made to his or her will.

Whether executing reciprocal wills or not, your spouse is free to change his or her will at any time and is under no obligation to inform you of the change. This means that he or she may remove your children as beneficiaries and leave their entire estate to their own children, without your permission or knowledge.

Feel free to contact our office if you have any additional questions! Enjoy this beautiful Spring weather!

You Don’t Have to Be Elizabeth Taylor….

Liz and her husbands

Liz and her husbands

You don’t need to be Elizabeth Taylor to be on your second, third, or even fourth or fifth marriage. If you have had more than one spouse, you have special estate planning needs, especially if you have children with each spouse. If you avoid these issues, it is almost certainly a way to create a less-than-desired result in the event of illness, incapacity, or death. The best way to have a smooth transition upon disability or death is to create a comprehensive strategy before you aren’t here to execute the papers.

Remarriage may result in cordial, but often not close, step relations. Frequently, such people thrown together by marriage simply tolerate each other until the biological parent dies or becomes disabled, or divorce occurs.

On the death of the biological parent, what happens? If proper estate planning isn’t done, the surviving spouse and step-parent has the option to take all that you intended to leave to your biological child.

By working with an estate planning attorney, you can ensure that both your new spouse and your children receive what you want them to. This can be done through either a prenuptial agreement and/or a fully funded trust (new post coming soon regarding “funding”).

Contact our San Jose, Fremont, or Redwood City Estate Planning Attorney. We will be more than happy to help you create the plan that best suits your needs or update the one you currently have.

In the middle of getting a divorce? You’re limited in regards to changing your Estate Plan.

Did you know that while you are going through a divorce, there are some things you are limited to doing in regards to your estate plan.

decree Aside from the ATROS (Automatic Temporary Restraining Orders) in the Summons of your divorce paperwork, you are limited in what you can change in your estate plan.

Here is what you can do:

  • Create, modify, or revoke a will.
  • Create, but not fund, a new single settlor revocable or irrevocable trust.
  • If in the usual course of business or for the necessities of life, transfer, encumber, hypothecate, conceal, or in any way dispose of any property, real or personal, whether community, quasi-community, or separate.
  • Execute and file a disclaimer.

Here is what you can do as long as your Spouse/RDP had notice:

  • Revoke a revocable trust. Follow revocation terms of trust exactly
  • Revoke a transfer to the beneficiary of a “non probate transfer.” A “non probate transfer” includes primarily individual retirement accounts (IRAs) and life insurance. You can only revoke life insurance if child support or spousal support is not at issue.
  • Eliminate a right of survivorship for property (joint tenancy or community property with right of survivorship).

In all of these cases, notice must be filed and served on the other party before the change takes effect.

If what you want to do doesn’t fall within these two categories you will either need to get your Spouse’s/RDP’s consent or a court order depending on the circumstances.

Are you unintentionally disinheriting your child??!!

brady_-844Today I met with a new client who was concerned about a letter she received regarding her mother’s estate. It was from an attorney representing her step-brother. Her step-father died a few years back and her mother passed this year.

At the step-father’s death, her mother made changes to their trust and created a brand new one- ultimately disinheriting her step-son.

If you have children from a previous relationship or marriage it is very important that you have an estate plan in place that ensures your children are not disinherited if you die before your spouse!

Proper estate planning can help prevent your new spouse from disinheriting your children from a previous relationship or marriage.

It is very common these days to have “blended” families and you can avoid disinheriting y our children as long as you plan ahead.

And just because you plan ahead, doesn’t mean you don’t trust your new spouse! I mean we can’t all be the Brady Bunch. You are just taking the necessary precautions.

If you have any questions regarding estate planning with blended families and you are in California, feel free to contact our office.