Estate Planning Practice Blog

How About Updating Your Will?

I love this post from Leanna Hamill, who practices law in the same areas I do on the East Coast... she's from Massachusetts. Leanna writes about a client who had an existing Will from 1962!

The laws are constantly changing with respect to Wills and Trusts.  Be sure to update your Will and other documents to reflect your current family dynamics and laws.

Personally, as an attorney, I do not like to do work that does not need to be done. I have reviewed existing Wills and Trusts and told my clients that they are actually okay as it comports with their wishes and the laws. But, a Will from 1962 needs to be updated no matter what.

See your attorney who drafted the documents for you. If you prefer, you can also see a new attorney. It is up to you.

Cute Story About A Pair of Elderly Clients.

I received a phone call today from a couple in their early eighties. Nice couple actually. I spoke to her and then he got on the phone. They wanted a durable power of attorney prepared.

They assured me that they already had their Wills and a Living Trust already prepared. I believe them as their property tax bill says that the owner of their property is their Living Trust.

She asked me how much it would be to have me prepare a Durable Power of Attorney. I gave them my best quote based on their referral source. I said $75 for two Durable Powers of Attorney and included two free notarizations of their signature ... and ... that I would make a home visit.

Home visit? Whoa!

Yeah, they lived one block over from me.  But that's not the cute part of the story.

The lady said to me over the phone in a high voice: SEVENTY FIVE DOLLARS????

After a pause on my end... I truly didn't know what to say -- so I said, " is that too high or too low?"  They were nice on the phone and I had to jump start the conversation again somehow.

She replied, "too high ... I should only pay $5 for a power of attorney."

That made me laugh! I said, you know what, I will prepare one for you for a lesser amount of money and we'll call it even. She agreed. The husband agreed later that they could have afforded to pay me more, but then I just said no -- just give me a referral to even it out someday. And we shook hands on that.

I am still smiling thinking about them. They made my day -- hard hagglers, them two.

Boring, Dry Prose?

Sometimes I think this blog is so boring. How can estate planning, probate and other related topics be entertaining? The answer, it can't.

So here's my little addition to spice this blog up... apparently it is all over the web with no source. So enjoy... time to get ready for summer in Southern California anyway. Hey, where did you get that flamingo? I want one for my front yard.

Recent Articles in New York Magazine on PreNups.

Think prenups make for fun reading? Here are three recent articles on the topic published by New York Magazine.

1. With This Ring (and This Contract), I Thee Wed, The prenup trickle-down BY Geoffrey Gray

2. So, You Want to Ask For a Prenup... It won’t be easy. You say prenup, your betrothed hears divorce—and you’re not even married yet. Here, attorney turned mediator Rachel Green, attorney-divorce-mediator-psychotherapist June Jacobson, and divorce lawyer Nancy Chemtob guide you through the negotiations BY Katie Charles

And lastly...

3. So, You Were Just Asked For a Prenup... You’ve fallen in love and you’re ready to walk down the aisle. You’re fantasizing about your future together when your partner pops the other question: Will you sign here? Manhattan psychotherapist Paula Angelone and divorce attorney Hal Mayerson tell you what to do BY Katie Charles

How Divorce Affects Estate Planning...

Are you divorcing? If so, you might be thinking about your existing estate plan with your soon-to-be-ex-spouse. Lots of things to consider.

To begin,  California Family Code Section 2040-2041 grants an Automatic Temporary Restraining Order (ATRO) for any matter filed in family law court.  To explain what an ATRO is without going into much detail is that it is a court order that is immediately effective upon the filing of any action in family law court that prevents the parties from doing certain acts (such as taking minor children out of state without permission of the other parent, disposing of community property, etc.)  These orders  can be found on the reverse side of the Summons.

The ATRO also affects estate planning for divorcing couples.

Thus, the pertinent family law provisions will allow you to revoke existing will and existing trust, create a new will, create an unfunded trust and to terminate joint tenancies.

So, a divorcing client may: 

1. Revoke existing Will;
2. Revoke all of his or her interest in existing Trust (pursuant to the terms of the Trust - be careful here to follow exactly any procedures specified in the trust agreement for revocation);
3. Create a new unfunded Trust;
4. Create a new pour-over Will; 
5. Execute a general assignment of his or her assets to the new, unfunded Trust.

You cannot actually transfer any of the your assets to the new Trust until the judgment of dissolution is filed or unless agreed upon by spouse during dissolution proceedings.

As always, consult with your divorce attorney for more instructions. You may also wish to consult with your estate planning attorney as well.

It's Ok. Take Your Time.

One of the things I make sure to tell folks who approach me about estate planning is that I am more than happy to help you when you are ready.

Seriously.

Don't feel embarrassed to mention to me that you would like to prepare your estate plan or draft a Will and then decide to call me six months or even a year later from when you first spoke to me to actually schedule an appointment. See my post on February 24 on appointments.

Like you, I get so busy sometimes that I tend to leave important things on my plate for another day. Like you, I get so busy juggling work with my family life and personal goals like trying to go to the gym. I completely understand. It’s life.

When you do call, I will be delighted to hear from you.

How Frequently Should You Review Your Estate Plan?

As a general rule, you should review your estate plan every three years. [Of course, reviewing it every year would be ideal. But as you get older, it seems that time flies!]

Your estate plan should be reviewed in light of changes in your circumstances and changes in the relevant laws.

You should also review your estate plan whenever there is a significant change in your financial or family situation.

It may be helpful to review your estate plan if you plan to purchase substantial life insurance, if you are preparing to retire,  if you become aware of a significant inheritance, or if you are getting married or divorced.

If you are uncertain whether a certain event or circumstance may affect your estate plan, please consult with an attorney for more a more detailed evaluation of your situation.

What is a Homestead? California Has Automatic Homestead Protection!

If you have ever bought a house in California, you might remember receiving weird letters in the mail asking you to complete a form for a Homestead Declaration.  For a $25 fee, the company will process your paperwork for declaring your home as a Homestead. It's really not necessary as it's automatic in California. Here's a bit more information on Homesteads. If it sounds vague, it's because it is indeed vague!

What it is: A Homestead gives protection against involuntary claims against an owner's home.

It's Automatic in California! In California, every homeowner has an automatic homestead exemption of at least $50,000 for his or her residence. This protection does not require the signing or filing of any papers or documents.

This is the blah, blah, blah part...

The amount of the exemption increases to $75,000 if at least one member of the family unit living in the house owns no interest in the house, as, for example, when a homeowner lives with his or her minor children. If a homeowner is 65 years of age or older, or is physically or mentally disabled, the amount of the exemption is $150,000. The $150,000 exemption also applies to persons 55 years of age and older if the person is (1) single and has a gross annual income of not more than $15,000, or (2) married and the individual and his/her spouse have a combined annual income of less than $20,000, and the sale is involuntary.

You can also declare a Homestead as well by filing a one-page document in the County Recorder where the property is located.

For more information on declaring a Homestead, check out the Department of Consumer Affairs website on Homesteads.

For more  information on the historical homestead act, check out the Homestead National Monument of America website.

FAQ: Who Will Raise My Kids if I Die?

A question every parent contemplates in the wee hours of the night, but hates to face in broad daylight. No wonder, it is a heart-wrenching worry. But you can stop worrying and here's how...

If you die leaving minor children and the other parent survives you, the other parent ordinarily will raise and support them.

If the other parent is not living, your minor children will require a guardian.

A guardian is an individual who is appointed by the  court to take custody of the minor child and to have the possession, care and management of their estate.

The guardian is required by law to provide for the minor’s health, education, maintenance and support.

You may appoint a guardian for your minor children in your Will. If you do not have a Will, or do not appoint a guardian, then the court will make the selection of a guardian.  Each parent should have a Will nominating the same guardian. If both parents pass away at the same time, there should not be conflicting nominations for guardian in their respective Wills. It can happen especially if the parents are not married or together in another sense.

It is easy to assume responsibility for this important decision as a part of your estate planning.

You may wish to look first to your contemporaries in your family, such as brothers, sisters, or cousins. You may also wish to consider friends with children in the same age range as your children. You should consult with the proposed guardian to ensure that the person is agreeable to assuming this significant responsibility.

If you are designating a husband and wife to serve as co-guardians, you should consider whether you want to specify that both of them are to serve only if they are still married to each other at the time of the appointment.

If both parents die, your minor children may be left with substantial property interests that need management and protection. You may wish to consider whether the same person is appropriate to care for your children and to manage their property interests.

In loving families, it is often the same person that is appointed as guardian and the trustee of the trust for the minor's benefit.  Your attorney will welcome this discussion if you are unsure about who should appointed as guardian and/or trustee.

It is usually a good idea that if  upon the death of you and your spouse, a trust be established for your minor children. The trustee should be encouraged to make generous distributions to assist the guardian, including the provision of funds to pay for any necessary expansion of the guardian’s home.

I think it is a good idea to tell the proposed guardians that they are named in your Will, Living Trust or other estate planning documents.

For more  on guardians and estate planning, please see my post on January 25 and another post on January 30.

Is it the Tissue?

Huh? What am I talking about?

Well, it is about a very funny observation in my office when I meet with estate planning clients.

First, let me remind you of my post on February 3 that estate planning is a happy time.

Last year when I met with clients, many of them cried during our meeting. They cried about the thought of their dying and leaving their children alone. They cried at the thought of another loved one's passing. It is tough sitting in my chair sometimes. I don't know what to say or do sometimes other than just offer the box of tissue sitting to the right of my desk.

So I offered the tissue. And kept offering it as I met with different clients.

One day, the box of tissue was not in my office. It was in my partner's office. She needed it for one of her clients.

And I didn't retrieve the box of tissue for a while.

I noticed that clients stopped crying. I had no idea why.

Then it hit me, they cry if they see the tissue. It gives them comfort knowing that they can reach into the box and cry into the tissue.

I really want to reinforce that estate planning is a happy time so I often share this exact tissue observations with my clients if I notice them tearing up. We laugh at the notion. And then we continue on. It's a nice little segue to taking a mental break.

So you may be wondering, where's the tissue?

It's under my desk now. I bring it out if there's a flood of tears.

Do you think the tissue box should be on my desk? If so,  post a comment and tell me your thoughts.