CA Estate Planning Blog

Monday, March 28, 2016

Estate Planning for the Art Collector


A fine art collection can be one of the most valuable assets a person owns -- sometimes even more valuable than a home or oceanfront property. For the serious art collector, congruently serious estate planning is necessary to help ensure the paintings or sculptures are not lost due to estate taxation or fiduciary mismanagement. Fortunately, OC Wills and Trust Attorneys can help Orange County’s art collectors plan for the future by preserving those precious creations from the past.
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Friday, March 11, 2016

Lending to Those Close to You Can Really Deplete Your Assets

How should you handle requests for loans from those you love?

We all know how "'tis better to give than to receive," and how wonderful it feels to be able to make a positive difference in the lives of those close to you. Nonetheless, even if you are living comfortably in retirement, depleting your assets by giving in to all requests from those short of funds may be a big mistake. For most people, open-ended giving can be a disaster, resulting in their inability to pay their own bills.

When Lending Becomes Serious

All of us should feel entitled to pay for a relative's gas on occasion, or "lend" money to a son, daughter, niece or nephew for an important new purchase presently out of their financial reach. In many cases, friends and relatives are true to their word, repaying money they've borrowed in a timely fashion. But what if they're not? One important question to consider is whether you can manage without the amount lent if it's never returned. Usually, small amounts are not problematic -- $20 or $40 here or there. Always be aware, however, that repeated unpaid "loans" can add up to tidy sums.

Demographics of Lending

There appears to be a disparity in the habits relating to lending among different communities. About 35 percent of black households report providing assistance to those outside their immediate family, as compared to 25 percent of white households. Slightly fewer Hispanic households (24 percent) report making loans of this kind. Interestingly, 75 percent of Hispanic households who help out experienced a feeling of being burdened by the act.

From the opposite point of view, approximately one out of four Americans report receiving some money during the previous year from a friend or relative who doesn't live with them. These statistics come from the 2014 Pew Charitable Trusts' Survey of American Family Finances and the Panel Study of Income Dynamics at the University of Michigan Institute for Social Research. In this study, which followed 7,845 people, the median amount of assistance was $1,000.

On the one hand, this study shows a sharing of wealth among intimates. Those who had experienced financial hardship during the year were five times more likely to have borrowed money to tide them over. The problem arises when the lender himself or herself experiences financial difficulties and needs the money that was lent returned. This is where not only financial arrangements, but human relationships, take a tumble.

Preventing a Financial or Emotional Crisis

Before you lend money to a friend or relative, experts recommend that you consider the following questions:

  • Is your own retirement account fully funded?
  • Do you have enough money to fund yourself in an emergency for 3 months to 1 year?
  • Do you pay off all your credit cards in full each month?
  • If you give or lend someone the amount requested, can you afford to lose it completely?

You should always be aware that, even with the warmest feelings and best of intentions, the loved ones who borrow from you may not be able, or willing, to pay you back (or to pay you back at the time you want them to). Therefore, it is always best to lend an amount you can do without.

Before lending any large amount of money, even to a loved one, you should consult with a reputable estate planning attorney who will be helpful in guiding you through your options. It may make sense for both parties to sign a binding legal document so the terms of the agreement are fully understood and adhered to.


Monday, February 22, 2016

A Primer on Business Succession Planning

How Can I Ensure the Continuity of My Small Business?

One of the critical issues for small business owners seeking to establish an estate plan is to consider the transition of a family owner or closely held business. The overarching goal of business succession planning is to ensure business continuity while minimizing the potential for family disputes.

There are a number of complex legal and tax issues related to a succession plan that can affect future generations, and an individual looking to preserve a family business will be well-served by engaging an estate planning attorney with expertise in business law.


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Sunday, February 21, 2016

Memorializing End-of-Life Decisions Under California Law


With the passage of the historic End of Life Option Act, the topic of end-of-life decision making has been once again thrust to the forefront. For those who may be unfamiliar with this law, it was executed in October 2015, and allows licensed physicians – at the direction of their lucid, competent, terminally ill patient – to administer drugs that will essentially end the patient’s life. While met with significant controversy, the law is not the first of its kind – as five other states have already ratified similar measures.
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Saturday, January 30, 2016

The Benefits of Long-Term Care Insurance


Should I consider obtaining long-term care insurance as part of my estate planning?

People are living longer today, and this means making plans for long-term care. If an individual experiences a serious long-term care event that requires extensive medical treatment or entering a long-term care facility, the costs can be exorbitant. By failing to have an adequate estate plan that considers arranging for long-term care, a lifetime of savings can be quickly depleted.
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Thursday, January 28, 2016

Details of David Bowie's Estate Plan Reveal Savvy Forethought Years in the Making


What types of estate planning techniques are utilized by high-net worth individuals and families?

As news of singer David Bowie’s death made headlines on January 11, 2016, many were in shock and disbelief that the 69-year old had so quickly succumbed to cancer – a fact not publicly revealed despite an 18-month battle. In the wake of sudden (or near-sudden) death, one of the first considerations is whether the decedent had an estate plan in place – as we have all heard of those high-net worth celebrities who died without even a Will, creating havoc for years to come.

In the case of David Bowie – who is, of course, a native of Great Britain – preliminary reports seem to indicate he had set up an intricate trust network designed to ensure his eight-figure personal wealth would be appropriately distributed to his wife and children when the time came.
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Monday, December 28, 2015

Giving Your Family a Sense of Security Through Estate Planning

What are some of the things you can do to make your passing easier on your family?

No one wants to die.  It is sad to think that one-day you will be separated from your spouse and other loved ones by death.  But, this is a reality that we all must face.  Fortunately, there are certain things that you can do to make your passing easier on your family.

Relationships are built on communication and matters of death are no exception to the rule.  You should tell your family what your end of life wishes are.  Although they might be formalized in a will, often times these documents are not reviewed until after a funeral or other final send off.

Another important aspect of end of life planning is life insurance.  Everyone should have life insurance no matter his or her situation.  In order to obtain the appropriate amount of insurance you have to calculate how much you are worth.  In other words, how much would it cost to replace you?  Answering questions like how much do you make, what services do you provide, how much will it cost to get someone else to do what you do should help you with this.  You also want to think how much your mortgage and other long-term obligations are so that you can plan to cover these as well.  Once you have gotten life insurance, you should let your spouse and other family members in on the details such as the insurance carrier, the terms and amount you are insured for.

One of the best things you can do to make your passing easier on the ones you leave behind is create an estate plan.  Wills and trusts are widely used by people in a variety of situations to give instructions about how their assets should be distributed and used after their death.  But, don’t do it yourself.  It is best to seek out the representation of an experienced estate planning lawyer to get the job done right.

The California estate planners at OC Wills & Trust Attorneys can counsel you as to the best way to handle your end of life affairs. Contact us for a consultation by calling (949) 288-3598 today.


Friday, December 25, 2015

Building Blocks of an Estate Plan

What estate planning documents do I need to have in place?

Many people put off establishing an estate plan either because they believe (wrongly) that they do not need an estate plan because they do not have substantial assets. While planning an estate can be daunting due to the complexities of federal and state laws, it is necessary to have a plan to protect your assets, ensure your wishes are carried out as well as to protect your loved ones. By consulting with an attorney, you can achieve these objectives while minimizing your tax obligations.

Everyibe should have the following four basic documents in their estate plan:
• Power of Attorney (POA) -- There are different types of powers of attorney. Generally, a durable power of attorney enables you to choose someone such as a spouse, adult child or close friend to conduct your affairs in the event of your disability or lack of capacity. A non-durable POA, however, can only be utilized to temporarily elect someone to manage your affairs while you are alive and well and are not incapacitated.

• Advance Directives -- Commonly referred to as a proxy for healthcare, advance directives authorize another person to make medical decisions for the type of treatment you should receive (or not receive) if you are unable to make those decisions for yourself.

• Will -- A Last Will and Testament is designed to transfer assets according to a person's wishes at the end of life. This document appoints a personal representative or an executor to carry out those instructions. While a Will is necessary to establish guardianship of minor children, this document must be probated in court which can be a time-consuming and costly process. For this reason, many people often take advantage of trusts to reduce the delay, cost and potential hardship of probate on loved ones.

• Revocable Trust. A revocable trust can hold legal title to and provide someone with a way to manage his or her property. Because the trust is revocable, you can make changes during your lifetime while you have the capacity, and minimize the expense, delays and publicity associated with probate. 

These estate planning documents are complicated as are the many issues related to estate planning. Ultimately, a well-designed estate plan requires the advice of a an attorney experienced in trust and estate law.


Monday, November 30, 2015

Estate Planning for Expectant Parents

It is never too early for parents to begin estate planning. In fact, the months before the new baby arrives may be a perfect time to address financial issues that may otherwise get indefinitely postponed once the life-changing event takes place. There are several steps that expectant parents can take to help ensure a protected future for their coming child.

Budgeting and Planning to Save

Any kind of planning for the future involves a comprehensive understanding of the present.


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Friday, November 13, 2015

New Transfer on Death Deed Available in California

What is a revocable transfer on death deed?

Traditionally, if you wished to leave property to someone at the time of your death you had a few options. You could provide for the bequest in your will, put the property in trust for the intended beneficiary, or enter into joint ownership with the person you hope to transfer the property to.  Now, there is a new option in the state of California: the revocable transfer on death (TOD) deed.

If you have provided for a beneficiary to inherit property through your will, he or she will be subject to the lengthy and costly probate process. While trusts are also widely used to transfer property to beneficiaries, they too can be expensive to set up and maintain. The revocable transfer on death deed is supposed to be the easy and cost-effective way to transfer property at the time of a person’s death. 

The revocable transfer on death deed can be used in a number of real property scenarios. The deed can be used to transfer a residential property of up to four families, condominiums and farmland of not larger than 40 acres with a single-family dwelling. The deed must be executed before a notary public and recorded within 60 days of signing in order to be effective. 

The deed can be revoked by the transferor (the person transferring the property) at any time before his or her death. A revocable transfer on death deed can be revoked by the recording of a new deed, either presently transferring the property or transferring it at death, or by the filing of a revocation form. If the transferee dies before the transferor, the deed is considered void. 

If you wish to leave property to someone, but want to avoid drafting a will or creating a trust, a revocable transfer on death deed might be the best option for you. Consult with a skilled estate planning attorney to make sure the TOD is executed properly. 


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