5 Estate Planning Tips for Women (and the men who love them!)

written by California estate planning attorney Carmen Rosas 
 

Estate planning is an important issue for everyone, regardless of the size of their estate. For women, however, it is even more important. Did you know, women on average live longer than men and thus have to manage living expenses for a longer period of time. Women also tend to make less money on average than men and may be at a financial disadvantage when their partner dies. Get started now to ensure your financial life is organized in a way to live comfortably and pass on your wealth to beneficiaries you designate.Here are 5 important tips for women to consider:

Women need to have an estate plan!
Women need to have an estate plan!
  1. Everyone Needs a Will– without a will, the court will determine how your estate is split up. This means if you have a life partner or are unmarried, the court will pass your estate on to “your next of kin.” Make sure your intent is on paper and in a legally binding document!
  2. Tax Implications– when assets transfer to a spouse, it may receive certain tax exemptions. However, if your estate exceeds a certain amount it may be subject to an estate tax. Also, if your assets pass to an adult child or another family member, the estate may still be subject to a tax.
  3. Evaluate Your Estate Planning After Your Spouse Dies– Many people do not revisit their estate plan once it is created. However upon the death of your spouse/partner or divorce, it is important that your estate plan is updated to reflect the proper beneficiaries.
  4. Trusts Can Keep Your Assets in the Hands of Those You Choose
    When you think of trusts, you may think that they only apply to the very wealthy. Trusts can help even those with smaller estates to protect the assets and ensure they go where you intend. Trusts can keep money protected from children until they are older, and they can often keep ex-spouses of beneficiaries from gaining access to the funds.
  5. Choose an Executor Wisely- An executor has the task of handling your estate until all taxes are filed and paid and the assets distributed. Many people choose a relative or close friend as executor, but be sure to pick one who has some financial savvy. You are trusting them with all the money you have left in the world. It’s important to ensure it is transferred in the right way to avoid extra taxes and potential lawsuits.

The bottom line here is that you create a plan in case of emergencies. Estate Planning isn’t just planning for death, its planning for life. It teaches you how to manage your accounts and protect your assets- building your financial portfolio. Don’t put it off any longer! If you would like to schedule a free 30 minute consult, visit our contact page and schedule a call or Skype meeting or give us a call and our Client Intake Specialist can help you out!

College Cost and Your Child’s Inheritance

College Fund

written by Bay Area estate planning attorney Carmen Rosas.

Question: Our younger son attended a state college  and our older daughter, an ivy league school that cost far more. We want to take into account the difference in the expense as we decide what to leave our sons in their inheritance. How do we do this?

Answer: It’s your decision on how you distribute, and your will or trust can be structured accordingly. However, have you thought through your approach?

Most parents raise children out of a common pot, providing for each one’s unique needs from the same account. Comparing the costs of raising them is a slippery slope.

Does one get more because she did not require braces? The other less because he failed math, took a summer course and could not work a summer job?

I question the wisdom of adjusting inheritances based on uncontrollable childhood circumstances and youthful choices. Also, it could create animosity between siblings.

It’s another matter to base unequal inheritances on what you’ve given them in their adult years. Children tend to understand and respect that approach. For example, if you gave one a sizable down payment to purchase a home, you may want to deduct that from his inheritance.

Whatever you decide, make sure you consider the impact on the relationship of your children and grandchildren after you pass away.

Happy Veteran’s Day! THANK YOU to all those who serve!

written by Redwood City Estate Planning Attorney Carmen Rosas
 
As a thank you, we are offering FREE wills to veterans November 11-15. Contact us!

As a thank you, we are offering FREE wills to veterans November 11-15. Contact us!

Today is a day we remember all those who have risked their lives to protect our country.

As a thank you for putting your life at risk for our freedom, our office is providing FREE WILLS to all Veterans beginning today. This offer requires proof of past service and will continue through November 15th.

If you know someone who could benefit from a free will, please send them our contact info.

Appointing a Guardian After Divorce

All families need to appoint a guardian if there are minor children involved.

However, in cases of divorce, when one parent dies the other parent will get custody of the child, even if they did not previously have primary custody. In cases like this, it is VERY important that parents create a plan especially where the other parent may be deemed “unfit,” negligent, or in cases of abandonment.

In a guardianship proceeding after the death of a child’s parents, California court typically looks first to the desires of the parents as expressed in their wills.

SPECIAL ISSUES FOR DIVORCED OR REMARRIED COUPLES

After a divorce, if either parent dies, then the surviving parent normally will have full custody of the children (even if the deceased parent had primary custody) unless a court finds that the survivor is not a “fit and proper person” to have custody. If one parent believes that the other should not have sole custody, he should plan in advance.

Other family members might need to be prepared to petition the court for a third-party guardianship in the event of the custodial parent’s death.

In addition, if a deceased parent fails to name a Trustee or “Guardian of the estate” for any property inherited by a child, the surviving parent will normally be appointed to manage and control the money. Since many marriages fail because spouses do not agree about financial matters, divorced parents often prefer to leave a child’s property to him in a trust managed by a third person, working with an institutional trustee.

INTESTACY AND DIVORCE

Like intestacy for married or single people, where there is no will, your assets can potentially fall into the hands of your ex.

If you were to die intestate, leaving one or more children who are not also your surviving spouse’s descendants (most commonly, children from your prior marriage – whether or not they live with you, and whether or not they are adults or minors), under California law your children (and grandchildren whose parents have died) would split two-thirds of your estate at death, while your surviving spouse would take only one-third. Moreover, your surviving spouse would be required to apply to the court to be appointed as a guardian of any property left to any minor children of you and your spouse.

Without appointing a guardian of the estate (for the “stuff”) your ex will be in charge of handling your child’s inheritance.

For more info, check out our previous blog posts on estate planning and divorce- HERE and HERE.

And if you haven’t RSVP’d for our workshop on HOW TO APPOINT A GUARDIAN, click here to join us!

Avoid an Estate Battle After You Die

Hi all! I hope everyone is doing well. We have been assisting lots of clients and had the honor of attending a wedding a few weeks ago.

REMEMBER! It is always important to update your estate plan and a marriage, whether it’s your first, second, or third, is definitely a time to make those updates.

This week as I was preparing my monthly post, I came across an article on Huguette Clark, the last surviving daughter of William A. Clark. Mr. Clark made a fortune in copper mining and passed those fortunes onto his daughter, who happened to live until she was  104!

The article posted in the New York Times stated that Huguette’s estate, valued at $300 million is still being litigated due to two wills written 6 years before her death, both within one month of each other.

The first will left everything to 21 distant relatives and the other left her estate to a caregiver, goddaughter and established a foundation for her dolls and other collectibles.

Although it is clear Huguette was a millionaire, her case has some important reminders for those with a lot less of an estate than she had.

Issues presented in litigation were:

  •  Disputing Heirs: wills are being more and more litigated and often times it is by relatives who were not even close to the decedent. People come out of the woodwork and stake claim to an estate, especially when the decedent has less obvious heirs.
  • Leaving a Collectible: if donating a collectible or an item of value to a charity, be sure the charity wants it. Be sure to check with the organization or charity to just to make sure.
  • Preventing Disputes: Huguette could have put all of her estate in a trust. This would have prevented disputes and protected her assets while still allowing her to have access to her money. This makes it more difficult for the disgruntled or excluded heir from arguing that mom or dad were incompetent when the trust was created.

It is important for individuals with estates larger than $150,000 to have a trust. Not only for the reasons above, but because it allows you to ensure disputes are limited when you are no longer here.

Our attorney will be more than happy to meet with you to discuss creating an estate plan.  You can meet at our Redwood City location and learn all about our full and comprehensive estate plans.

Let us know if we can help!

P.S. Are we friends on Facebook yet? LIKE us today and for a chance to receive a FREE consultation.

Our law office serves Redwood City, Menlo Park, Palo Alto, San Carlos, San Mateo, Foster City, Belmont, Burlingame, Mountain View, San Jose, Santa Clara, Sunnyvale and more.

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!

The TOP 4 (MUST HAVE) Estate Planning Documents

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If you follow us on Facebook or Twitter, you have probably seen the weekly Friday “Homework” in preparing for your estate planning meeting. If you don’t follow us, you should!

So, what is this “Homework?” Well it’s basically a list of things to consider before meeting with our Redwood City estate planning attorney.

The last two weeks were 1) the financial information you should gather and 2) if you’re a parent, some things to consider when selecting a guardian (See our past post here).

In addition to our weekly “Homework” assignments, we have decided to post on the TOP 4 (MUST HAVE) Estate Planning Documents to help you stay even more organized!

TOP 4 (MUST HAVE) ESTATE PLANNING DOCUMENTS

1. Will: A will gives instructions for distributing property that you own, upon your death, through the probate process. A will is essential if you have minor children, as this is the only way you can name a guardian for them. Some wills are simple, while others may include complex planning provisions, depending on each particular circumstance.

2. Advance Health Care Directive: An Advance Health Care Directive or AHCD is a document that designates someone to act for your regarding medical care should you become incapacitated. This document will also determine if and how long you stay on life support. So, if at some point you can’t state your wishes regarding health care, someone you love and trust will be assigned to make those decisions for you.

3. Durable Power of Attorney: A Durable Power of Attorney or a DPA gives someone the authority to handle all of your finances and property should you become unable to. This document will allow a person of your choosing to sell, invest, spend and otherwise manage your finances for a specific time identified in the document. The agent you select will be able to handle everything without needed a court order.

4. Living Trust: By transferring your assets to a living trust, you are able to protect your assets if you pass away. Assets that are properly placed in a trust avoid probate- this is key and that’s why a will alone is not sufficient to avoid probate. Generally, you are the trustee for your trust and if something happens to you, you will have already named a successor trustee to handle your affairs. (You ask why is MUST HAVE in parentheses? Well, because if you don’t own property or have certain assets, you probably don’t need #4).

At the Law Office of Carmen M. Rosas, we design plans specific to your needs. Not every client is the same and not every client has the same story. We want to hear your story!

If you liked this post, subscribe, and never miss a post again. And, if you really liked it, shoot us an e-mail and request one our other handy dandy reference guides for FREE(Please let us know which ones you want!)

  • 12 Tips for Choosing a Guardian
  • Things to Consider in Selecting a Guardian

And stay tuned for our e-book, coming soon!

Always Wear Clean Underwear

underwearMy grandma used to tell me to always wear clean underwear. Not, that I had a problem changing them. 🙂

I’m sure you’ve heard this saying once before in your life! She would always ask, “What if you’re in an accident and you need assistance? What will the paramedics or life savers say if they go to help you and you have dirty underwear?!” I never understood because if I was in an accident, well I’m sure they wouldn’t be concerned with what my underpants look like. (That’s for another blog!)

My reason for bringing this up is this: what happens if you are in an accident? If you’re incapacitated? What happens to your kids?!

Imagine being out on a date with your significant other. Your children (ages 7 and 4) are home with a sitter. You leave the emergency contact for the sitter- should anything happen she is to call you or your spouse, call grandparents, or call 911 if its an emergency.

On your way home from dinner, both you and your spouse are in a horrible car accident. Your spouse doesn’t survive and you’re in a coma. What happens now?

Its time for the babysitter to go home. No one can get a hold of you. The sitter calls the grandparents but they just so happen to be out of town tonight. She tries to reach the neighbor but no ones there. She waits, and waits, and waits.

She gets worried and calls 911. The police arrive and they contact local hospitals only to find out about what happened. Again, what happens now??

The police call Child Protective Services to come get the kids. The babysitter offers to stay with them, but the police state that she doesn’t have the authority to care for them. Your children go with the stranger from CPS. They are frightened and scared.

Now they wait until someone comes to get them- this could take a long time as there is a process to have a guardian appointed.

This is what happens if you don’t have a will. This is what happens if you’re not wearing clean underwear.

What would happen if you had a will and had appointed a guardian? If you had prepared for the “What Ifs?”

The babysitter would have had a copy of that will with the emergency information you gave her. The will would state that your neighbors, whose children are the same age as yours and whom your children know and care for, are your children’s guardians should anything happens to you or your spouse. It would have their contact information. The police would have called them and explained what happened. Your children would have gone with your neighbors- to a safe place with people they know and with people who care about them.

I can’t explain how important it is to have a will and appoint a guardian. Even if you feel like you don’t own a lot of assets or have any property, your biggest asset is your children! If you do only the bare minimum, throw on clean underwear and create a will appointing a guardian for your minor children.

If you want assistance creating a will or working with our Redwood City estate planning attorney to create a Child Protection Plan, send us a note or browse our blog some more, follow us on Twitter or Facebook.

And if you shoot us an email at carmenrosaslaw@gmail.com, we will be happy to send you our FREE “Top 10 Points to Selecting a Guardian.” (Don’t worry we won’t sell or give out your information. Promise.)

What is probate and why should you avoid it??

Probate is the court proceeding that happens when someone dies without proper estate planning. In California, if an estate is larger than $150,000 and a trust is not created, the estate is subject to Probate.

The general purpose of probate is to collect and account for all the assets of the deceased; liquidate the assets into cash; attempt to negotiate a reduction and then pay all outstanding debts and taxes of the deceased and distribute the monies or assets per a will or to the immediate spouse/children/siblings/relatives of the deceased.

This means a few of things:

  • You don’t get to decide who gets what
  • It costs a lot of money (Probate fees are set by statute, the larger the estate, the higher the fee. An individual estate with one house and bank accounts could easily hit the $10,000 mark)
  • You don’t get to decide who your minor children live with
  • It could take more than a year to get everything settled- and that’s if there are no real complications.

Now, wouldn’t you rather sit down with one of our attorneys and create an estate plan that suits your needs where you get to decide what happens to your estate and children without the added cost to your loved ones once you’re gone?

Schedule a planning session with us by visiting our website, creating an account and scheduling an appointment online, or calling us at 650-503-3770.

Visit our estate planning attorney in San Mateo County, Santa Clara County or Alameda County.

Estate Planning For Young Adults

young adults

As the first half of the school year comes to an end and decisions about what college to attend are being made, what happens once your teen turns 18??

Well, once a child turns 18, parents lose the legal ability to make decisions for their child or even to find out basic information. Being able to receive information about your child’s academic records will be impossible without their permission. A medical emergency takes frustration to a whole other level!

I highly suggest that on your child’s 18th birthday you meet with an attorney to help draft a couple of documents to make the transition into “adulthood” easier for you as a parent.

In the Event of Incapacity

  • A Durable Power of Attorney for Heath Care gives another person legal authority to make health care decisions (including life and death decisions) if you are unable to make them for yourself.
  • A Durable Financial Power of Attorney gives another person legal authority to manage your assets without court interference. (A “regular” power of attorney ends at incapacity; a “durable” power of attorney remains valid through incapacity.) Your attorney can write it in such a way that it does not go into effect until you become incapacitated.
  • HIPPA Authorizations give your doctors permission to discuss your medical situation with others, including family members and other loved ones.

In the Event of Death
Usually a trust and a will would be created where there are substantial assets. However, because most young adults do not have substantial assets, a simple will is probably all that is needed at this time. It allows the child/young adult to designate who should receive his/her assets and belongings in the event of death. Otherwise, the laws of the state in which the young adult lives will determine this, and that may not be what anyone would want.

After the Documents Have Been Signed- Tips for the Young Adult
Once the documents have been signed, it is important that the designated person knows where to find all financial records and passwords if needed. Tidy up your computer’s desktop. Make a list of accounts and passwords (including your computer’s password), print the list and put it in a safe place; a hard copy is important in case your computer is lost or stolen. If you use an online back-up system, be sure to include it. Don’t forget online accounts and social media. If there is anything you don’t want someone (think, parents) to see, either get rid of it now or ask a friend to delete files or remove things if something happens to you. Finally, update your documents as your life changes.