Estate Planning Practice Blog

Worried About Your Elderly Relative At Their Home?

If you are worried about a parent or another elderly loved one who lives in a different area from you and it is too far for you to check in on them, request a "well-being" check from local law enforcement. Contact the local law enforcement agency to request an officer or representative to visit your loved one and assess their "well-being." This is especially comforting if you are in the process of making long term caregiver plans, but have yet to put it in place.

Avoiding the Family Fight: A Book on Avoiding an Inheritance War.

A Canadian lawyer wrote a book called "The Family Fight." Author Les Kotzer terms it "inheri'tense," which aptly describes what inheritances can do to families.

Kotzer created a website dedicated to his book, which also promotes his practice in Ontario. Kind of fun clicking. Don't order anything from his site thinking it will conform to California law though. You'll want to obtain state specific materials either from a website that advertises your state materials or consult with a local estate planning attorney.

Is Your Dog Worth 1.6 Mil?

Fellow blogger and excellent Northern California personal injury attorney, Jonathan G. Stein posted about the value of a family pet after being runned over by a car. Apparently the Oregonian dog was worth more being runned over than not. This would set a horribly bad precedent, don't you think? Jonathan also reminds his readers that in California the owner of an injured pet can only recover the costs of the veterinarian bills.

Retired? Convert Your 401k to an IRA.

Yesterday, I wrote briefly about the pitfalls of handling an inherited IRA. One useful tidbit of information as it relates to 401k and 403b retirement plans is that if you are retired, you should consider converting your existing 401k and 403b plans into a rollover IRA. This is because many companies have restricted options for handling inherited 401k or 403b plans.

Your company's plan may require your beneficiaries to liquidate the accounts upon your death thus losing any tax benefits to keeping in such a vehicle and creating a tax liability. If you rollover your 401k or 403b accounts to a rollover IRA, your beneficiaries will be able to make more choices about how to handle their inheritance.

It sounds like a hassle, but once you get the forms from your company's plan, complete them and set up a rollover IRA account, the transfer can happen in as little as two weeks. Plus if you are working with a financial advisor, he or she would be more than happy to assist you with the leg work. Do I think financial advisors are a good thing? Hmm, that's a post for another day.

Paying for Life Insurance For Someone Else.

An interesting ethics dilemma popped up today in Randy Cohen's New York Times column, The Ethicist. A reader asks if it is okay for him to continue to pay for his former stepfather's insurance policy because of his pending death. In other words, is it ethical to pay for a life insurance premium for someone you know who can't afford it anymore and is about to die -- what risks are you taking, both actuarial and ethical? Click here to read the full Q&A.

Inheriting an IRA?

If you have inherited an IRA, be sure to seek professional help before managing this asset. First, IRAs are full of rules, tricks and loopholes bound to get you in trouble. If you make a wrong turn in handling an inherited IRA, you may pay through the nose with tax penalties.

If you inherited an IRA from someone other than your spouse, you will most likely want to retitle the IRA as an inherited IRA or beneficiary IRA. You can only do this if you were named as the beneficiary of the IRA in the first place.

You can cash out an inherited IRA, but you will have to pay taxes. Money stashed away in a traditional IRA (not  Roth IRA) has been stashed using pre-tax dollars. Taxes must be paid on the IRA distributions at some point whether it is during the lifetime of the original owner or when it is inherited. If it is inherited and you retitle it as an inherited IRA, you can take out smaller distributions based on your age and pay taxes as you go. This means that the bulk of the IRA can continue to grow tax-deferred for many many years.

Like I said, lots of rules, tricks and loopholes here. Be sure to consult with someone who understands inherited or beneficiary IRAs.

From Utah -- Things Are Different There.

Big Love is getting blogging posts in the estate planning world.  I wrote about the guardian episode on May 21 and random thoughts on April 17 involving polygamy and estate planning.

Brian L. Olson, Esq. from Utah and the land of Big Love says that things are different in his state. He didn't comment much, but I guess he's right because he wrote "[h]owever, those of us in Utah understand the legal difficulties of polygamist relationships reach beyond fiction. "

Joel Schoenmeyer, Esq., from Chicago-land also wrote on Big Love and did a great analysis on the Where There's a Will episode.

The last episode of the inaugural season is coming up. Aw, shucks.

Keep Your Home to Yourself, Please.

On April 28, 2006, I wrote a brief post about not gifting your real estate to your loved ones before you pass away. Here's more on this delicate topic from one of the best blogs in the business:

Joel Schoenmeyer, Esq. writes why on May 16, 2006 it is not a good idea to gift your residence. He follows up with this thread by linking to New Jersey attorney Deirdre R. Wheatley-Liss's blog post on The Cost of Gifting Your Home.

Can I Be Barred From Handling My Own Affairs?

The law requires that you have sufficient mental capacity to handle your own affairs. This includes making medical decisions for yourself and to entering into contracts for example.

To ensure that your affairs will be handled the way you want if you lose capacity, whether permanently or temporarily, you can prepare a power of attorney for finances. A durable power of attorney can be effective immediately and continue through your incapacity. You can also prepare a power of attorney that is effective upon your incapacity as determined by two medical doctors or the court.

You can also prepare a power of attorney for healthcare, which is now called an advance health care directive. This document allows you to appoint someone to make medical decisions for you in the event you are unable to do so.

If you prepare a revocable Living Trust, you can name a successor trustee to manage your trust assets in the event of your incapacity. Most people transfer title of their home into their trust so your successor trustee would be able to manage all aspects of your home for you.

If you have not made any arrangements such as I have described above, the court may appoint a conservator to act on your behalf. Nearly anyone can petition the court to become your conservator if they can show that you no longer have capacity to manage your affairs.  I hope I don't have to say that this is the worst case scenario.

So Loving Big Love on HBO -- "Where There's a Will"

Ho, ho, ho, major blog fodder again for just watching one of my favorite shows on tv. I love Big Love on HBO. A recurring theme on tonight's episode was about the Wills. In fact, the episode was titled "Where There's a Will." Love it!

Part of the plot in tonight's episode involved the three sisterwives preparing Wills to determine who would be guardians for their respective children.  It went like this: if something were to happen to a wife and Bill (their husband) then each wife made nominations in their Wills for one of their sisterwives to become guardian. The sisterwives kept changing their minds, but in the end they stuck with nominating their sisterwives in order of their marriage to Bill.

Big Love was right on about the importance of Wills in every family.

In California, a Will is the only document where you can nominate a guardian for your minor children in the event you are unable to care for them or pass away.

Wills are easy to draft. You can see an attorney to have one completed as part of your estate plan or do some homework on Google to find out your state's requirements for a holographic Will.