The Trouble with DIY Estate Planning

vacation-estate-plan-review Everyone is always looking to save money! (I know I am). But, there are some things you shouldn’t do yourself, like estate planning. Work with a professional to ensure your peace of mind!

Although having a DIY estate plan is better than having nothing at all, unless you are single and have no assets, you shouldn’t be going at it alone.

People tend to make mistakes when filling out the forms and sometimes don’t understand the language or terms involved in the legal documents. Add “trust funding” to the mix and it could spell a recipe for disaster.

Another risk is that when it comes to transferring your money to family members after you pass away, a self-written will might contain holes that lead to errors. Without the help of a lawyer—or sometimes even with the help of a lawyer—a person might not prepare for contingencies such as being pre-deceased by children, divorce, or the births of new children. (Think the King of Pop or Anna Nicole Smith.)

And, if you think estate planning is expensive, probate costs about $12,000-$20,000 in attorneys fees  and correcting mistakes in DIY plans could cost the same amount, if not more in order to litigate.

My office offers a variety of payment plans and workshops to help you create an estate plan that fits within your budget. For peace of mind, contact the office today 650-503-3770 or visit our contact page to set up a 15 minute telephone consultation.

 

Casey Kasem + End-of-Life + Step-Children

Casey KasemAfter two weeks of being in a hospital in Washington, Casey Kasem has passed at the age of 82.

His passing did not come without notoriety. The pubic battle over his health care began in October 2013 when his oldest children protested in front of their father’s home after their step-mother would not allow the children to visit with Kasem.

In 2007, when Kasem found out he had Parkinson’s, he signed a Health Care Directive granting authorization to his two oldest daughters to make decisions for him.

This document, which snubbed Kasem’s wife, set the stage for the legal battle that would erupt six years later as his health deteriorated and his children accused the stepmother of shutting them out of their father’s life. It would serve as a legal basis for his daughter to have doctors discontinue infusions of water, food and medicine.

So, what can we take from this public and emotional battle:

  1. A health care directive is helpful to give instructions and appoint an agent to act on your behalf.
  2. A health care directive does not however, guarantee that no one will contest it.
  3. A health care directive allows you to pass on your wishes regarding life support so a judge can use it to make determinations in court if the issue arises.
  4. A situation like this is one reason why blended families (especially) should have a comprehensive estate plan.

May Mr. Casem rest in peace.

 

When is Probate Triggered?

probate

Do you know what PROBATE is?

Do you know how it is triggered?

Well, if you are over the age of 18, have more than $150,000 in assets, and die without a trust, probate begins.

That also means if you only have a will, your estate must still be probated. A will simply gives instruction as to how you want your estate distributed.

A trust is the only instrument that can keep you out of probate when you estate is over $150,000.

So, if you own a home or have other assets that exceed $150,000- be sure you create a trust!

Reduce the Risk of Identity Theft When a Loved One Dies

written by Bay Area estate planning attorney Carmen Rosas.
 

Don't let your loved ones be the victim's of identity theft.
Don’t let your loved ones be the victim’s of identity theft.

A common trend among identity thief’s?

Afterlife identity theft. And unlike, the recent comedy released, it’s not a funny topic. Identity thief’s are using obituaries to obtain information about deceased individuals.

Upon the passing of a loved one, be sure to contact all financial and government institutions, including:

  • Banks
  • Social Security Office
  • Credit Bureaus

 

Do’s and Don’ts of Estate Planning During a Divorce

Written by Silicon Valley Estate Planning Attorney Carmen Rosas
 
Scrabble
 
 

Over the past few weeks, I have had a few client’s contact me regarding making changes to their estate plans while they are going through the divorce process. Some things can be changed, while others can’t.

For example wills and powers of attorneys can be changed to reflect someone other than your spouse as the agent or executor. You might not want your soon-to-be ex making decisions regarding life support or important medical decisions while the divorce is pending!

Below is a list of common assets that get overlooked after a final divorce decree is signed (i.e. “loose ends” that are never tied up):

  1. Beneficiary designations on life insurance policies
  2. Beneficiary designations on retirement accounts (IRA, 401(K), etc)
  3. Payable on Death or Transferrable on Death designations on bank accounts and investment accounts (meaning this account transfers immediately upon death to the person named)
  4. Title to real estate — did you execute a new deed for property you received or that your former spouse was to receive pursuant to a divorce decree?
  5. Title to vehicles
  6. Owners and signers of safety deposit boxes
  7. Beneficiary and Executor designations under a Last Will and Testament
  8. Trustee and Beneficiary designations under Trust agreement
  9. Agent designations under a Statutory Durable Power of Attorney (financial power of attorney) or Medical Power of Attorney

If you would like to update your estate planning documents or have questions about what you can change while your divorce is pending, give our office a call at 650-503-3770 or send me an email at carmen at carmenrosaslaw dot com.

Baby, It’s Cold Outside!

written by California Estate Planning Attorney Carmen Rosas.

 

I hope everyone is staying warm! It’s been extremely cold here lately in sunny California! I woke up to pictures of thermometer readings on Facebook this morning. That’s when you know the temperature is extreme for the Golden State! Although there isn’t any snow, it’s still pretty close to freezing!

Anyhow, I’m going to take a moment this morning to remind you a little bit about how probate can be just as cold as this 30 degree weather. Now, that’s not to say that for some people, probate may be beneficial, but for most of us out there, probate is frightful subject (nothing delightful there! Horrible, I know!)

Probate is long and lasts at minimum (with budget cuts and what not) one year. That’s one year without access to funds for funeral/cremation expenses. One year without access to money to pay last bills, the inability to transfer homes, and the inability to mourn/celebrate the life of a loved one because of logistical issues with probate.

With the cold, icy weather upon us, and possibility of rain and sleet, accidents are more likely to happen. And no I’m not saying because the weather is crappy, you’re going to get in a car accident, but the chances increase. I just want you and your family to be protected.

If ANYTHING happens to you or your spouse/partner/baby’s parent, and neither of you could care for your minor kid, do you know what happens? No, they don’t get to go to grandma and grandpa or auntie or uncle. They risk going in to foster care until a judge can decide where the minor(s) should go. This is a scary situation, especially for little ones.

So, if the length and annoyances of probate aren’t enough, or your children going to foster care isn’t enough, then how about giving away $10,000 of your hard earned money to an attorney and the state? Didn’t think so.

This is why estate planning is ESSENTIAL. And, unless you have a really complicated estate and are a gazillionaire, your estate plan will be about 1/3 of what probate costs, it will be PRIVATE, and your loved ones will have an easier time dealing with the logistics/technicalities of your incapacitation or passing.

So, on that note, stay warm and get to work- make an appointment with an estate planning attorney (yes, even if it isn’t me)!

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.

Making Changes- Baby Boomers are editing their estate plans.

Image courtesy of PAE300

Image courtesy of PAE300

In a recent Reuters article, a common trend among baby boomers was discussed.

Parents are making children wait until they are older to receive trust distributions. Due to the economy many parents have adult children moving in with them. That means at 20 and 25, children are living at home and might not necessarily need or use the money as intended.

Baby boomers have been updating and making changes to their will to distribute money to their children at 30 and 35 instead of outright at 18, 21 or 25.

Making these staggering distributions allows parents to ensure that children have funds to cover major life events like going to college or buying a first home.

In the meantime, a family member or trusted individual would act as trustee until the age of final distribution.

The trustee can still make distributions for various needs. For example if your child wants to buy a home, they can. The trustee will purchase it out of the trust assets.

There are numerous reasons for creating a trust and postponing distributions, but beware that an adult at 30-35 may have issues being told they cannot have access to the trust funds. But, just remember you aren’t necessarily trying to make your beneficiaries happy- you are trying to ensure you are a good steward.

So, if you haven’t already updated your estate plan, you should!

What are your thoughts on waiting until children are older to distribute funds? Pros? Cons?

Share your thoughts with us!

Sherlock Holmes and “Multiple Personalities”

Here is some “celebrity gossip” for you to start the week. The estate belonging to the writer of the infamous Sherlock Holmes is being sued.

Leslie Klinger, an author, editor and Sherlock Holmes expert sued Sir Arthur Conan Doyle‘s estate and wants an order that enjoins the Doyle estate from further asserting certain rights. Klinger states that the copyright has expired on major story elements of the famous detective.

Throughout the years, there’s been many versions of Sherlock Holmes including Warner Bros.’ two recent films starring Robert Downey Jr. and CBS’ Elementary, which gives a modern take on the character.

Image courtesy of wikipedia

Image courtesy of wikipedia

While working on his book, In the Company of Sherlock Holmes, Klinger was contacted by agents for the Doyle estate who asserted a license was needed to continue his work. Instead of agreeing, Klinger sought a declaratory judgment in Illinois federal court, pointing out that many of Doyle’s stories were published before 1920s, which is argued puts them in the public domain.

Typically, the copyright term is life of the author plus 70 years or 95 years after publication, whichever is earliest. How many of Doyle’s Holmes stories are “in” copyright depends on how you count. Doyle’s estate counts ten stories are still subject to copyright.

Now that the estate has finally responded, the judge presiding over the case can begin hearing evidence and arguments to make a decision.

Happy Monday 🙂

P.S. Dont forget to schedule your consult before the end of the month to receive our birthday discount off your estate plan!

Don’t let your child’s guardian be an embezzler!

Over the weekend, I came across an article about a guardian who was sentenced to serve 30 years in prison for embezzling hundreds of dollars from an account he was a guardian of.

Attorney Michael Brown was sentenced to 40 years, with 10 suspended, on two counts of embezzlement related to the estate left to the grandson of late civil rights leader Aaron Henry. Henry led the NAACP until he passed away in 1997 and left his estate to his only daughter, who died in 2000. One of Henry’s grandsons was a minor at the time and Brown was appointed by the court to be a guardian of the estate. Rather than keeping the funds in a separate trust, and placed it in an escrow account.

You can read more here, but the moral of sharing this story is: “Select a Guardian YOU can trust!” 

Don’t leave assets in your minor child’s name. Doing so subjects those assets to be dealt with in court and possibly in the hands of an individual who may embezzle from your child.

As mentioned in our previous posts, selecting a guardian is one of the BARE MINIMUM things you can do as a parent.

If you haven’t already selected a guardian, you can do a few things to get started:

1) Request our 12 Tips for Selecting a Guardian (which is free- just shoot us an e-mail);

2) Keep an eye out for our Guardianship Workshop to learn how to appoint a guardian; or

3) Schedule your own workshop with friends/families/parent groups to teach you how to appoint a guardian.