Estate Planning Practice Blog

Choose Your Kids' Guardians Now.

All parents should have Wills drafted to protect their youngest family members. A Will is the only document where you can nominate guardians for your minor children in the event both parents pass away at the same time.

If you are not married to your child's other parent, the surviving natural parent will either assume the sole parenting role or have priority as guardian. You can always nominate someone else other than your child's other natural parent to be his or her guardian if you have a good reason. For example, if the other parent is in jail, is an absentee parent or has other issues that would not make him or her a good choice to step in your shoes to continue parenting your child. In these cases, you can nominate who you think would be better suited to be your child's guardian and document your choice with a letter of intent. The court may not approve your choice, but your wishes will be known. Also, there is a possibility that an absentee natural parent may decide that he or she would not want to step into your shoes and would prefer to allow the child to be placed with your nomination of guardianship.

But if the unthinkable happens, and both parents pass away at the same time, guardians and alternate guardians need to be named in your Wills. There is no judge that wants to have to make a decision who should be the guardian in a situation like this. And this kind of situation can be exacerbated when there's a family fight over who should get the kids.

This happened to friends of mine recently. They had 3 young boys. My friends, as the boys' Mom and Dad, were both killed on a tragic car accident on their way to Arizona. Both sets of grandparents were older and in no position to care for the 3 young boys. Heart wrenching decisions had to be made to determine who will care for the boys immediately, can they be together and who will care for the boys permanently. When Mom and Dad both die, the kids still need someplace to spend the night and someone needs to frantically make the decisions.

Ask your potential guardian nomination if they will serve as guardians if needed. Make sure you have sufficient life insurance so that your guardians have enough funds to care for your children. Lastly, prepare your Wills and nominate guardians for your kids.

If you also own real estate in California, you should talk to your attorney about setting up a Living Trust as well. A Will is a must for nominating guardians, but it is only one document of many that make up a complete estate plan.

Exemptions From California Property Tax Reassessments.

Property taxes are a big deal in California. It is based on the value of the property at the time of transfer and whether the transfer from one owner to another constitutes a change of ownership.

Say you transfer your home into your Living Trust. This is considered a change of ownership, but it is exempt from property tax reassessment under California's Revenue and Taxation Code.

Other kinds of transfers are also exempt.

For example, transfers between spouses or registered domestic partners are exempt. As are transfers from parents to children and grandparents to grandchildren.

For more information on this important topic, read this white paper by Betty T. Yee, acting member of the State Board of Equalization as excerpted below:

"California has over a dozen transfers of real property from one party to another that are excluded from treatment as changes in ownership. California Revenue and Taxation ("R&T") Code Section 60 defines “changes in ownership” as a “transfer of a present interest in real property, including the beneficial use thereof, the value of which is substantially equal to the value of the fee interest.” Generally, a change in ownership subjects the recipient of the property to tax reassessment treatment. Statutory exclusions from change in ownership treatment are enumerated in various sections of the R&T Code."

Estate Planning Just for Old People?

I met a lovely attorney on Saturday afternoon. She suggested that I keep in touch with her colleague who is also a lovely attorney because "Josephine" knows lots of old people. Thinking that old people are in need of estate planning.

I disagree.

Young people and especially people with young children are most in need of estate planning. They need to protect their families and their littlest loved ones from a worst case scenario: what happens if something happens to both Mom and Dad?

Estate planning, life insurance planning and other financial planning really go a long way to ensure a peace of mind for all families. Not just Mom and Dads in their 50s, 60s, 70s and 80s, but Moms and Dads in their 20s, 30s and 40s too.

It is the littlest loved ones that will suffer the most from their families not having an estate plan.

Guardians for the littlest loved ones need to be nominated in their parents' Wills, their homes if owned by their Moms and Dads should be placed in a Living Trust with successor trustees named to avoid probate and life insurance policies should be taken out on Mom and Dad's lives to provide for a small trust fund for college and other life expenditures as the littlest loved ones grow up.

May I suggest that if you can't find a present to give to your spouse this year for the coming holidays that both of you decide to give your family the best gift of all? A gift of a peace of mind. Corny, I know, but it truly is a gift to have proper estate planning taken care of your family.

Approved By KFI Radio Talk Show Host Bill Handel.

Bill Handel is famous in the Southern California region and other regions across the country for his radio talk show called Handel on the Law. Bill Handel has a complimentary website to his radio talk show to help listeners locate an "approved" attorney in their area.

Both Jennifer Sawday and managing partner Matthew Kinley from Tredway, Lumsdaine & Doyle are approved by Bill Handel!

Read Jennifer's bio here and Matthew's bio here.