Estate Planning Practice Blog

Trustees for Blended Families.

Estate planning is a must for blended families. Families where there are children from a prior marriage or a relationship need estate planning to make the parents' wishes known and protect all of the children involved accordingly. A three-way marital trust is often advised for blended families.

When setting up a three-way marital trust, one of the conundrums is who should be trustee? Many parents name their two oldest kids -- one from Mom's side and one from Dad's side to serve as co-trustees. Some parents name the most trusted or responsible child as trustee. Some name other family members altogether to serve as trustee.

One thing to consider is to name a corporate trustee (such as a bank's trust department, an independent trust company or private fiduciary) to serve in the event your first and second choice nominations cannot serve. It also allows all of the named successor trustees to voluntarily resign in favor of the corporate trustee named last if administering the trust becomes contentious or otherwise problematic for the children or family members named to act.

As always, discuss your objectives and concerns with your estate planning attorney.

________
Estate Planning, Probate and Trusts involve complex areas of law. Individual circumstances must be considered before any advice can be given.  The general information above is not to be construed as legal advice, which can only be given after consideration of the unique facts of each matter. Please seek the advice or counsel of your attorney, financial advisor or CPA as it may be appropriate.

What Do We Do?

Attorney E.J. Hong from Palo Alto, California provided a succinct answer to what we do as individual attorneys: "I'm an estate planning attorney, I do wills, trusts and probate law."

E.J. also provided this additional commentary as to what estate planning attorneys are all about. I read this in one of her email responses from one of the American Bar Association's email lists for attorneys. E.J. graciously agreed to give us permission to share what she wrote:

1.  Estate planning is a happy place.  It beats handling probate or conservatorship or leaving turmoil for your family.  It certainly beats having to fight out a guardianship proceeding because the parents did not have a Will.  It beats your family members having to guess at your medical decisions. It's a happy place because you are in control now. You're alive, you're healthy, you have assets, you have people you love and people who love you. 

2.  Another way to think about estate planning is asset protection. Your assets are you, your children, your business, your properties, all the stuff that you've worked hard for.  Asset protection is protection from probate, conservatorships, taxes, and turmoil.  The federal government may be your favorite charity, but maybe not.

3.  Estate planning is an act of love  - it protects you and your loved ones.  It's like having an insurance policy.  You may not need it right away, but when you do need it, your family will be very pleased that you cared enough to plan ahead.  You also might discover, as my clients have, that making an estate plan actually decreases your anxiety and leaves you with peace of mind. 

-- E. J. Hong

Questions to Ask Your Attorney Before You Hire Him or Her for Your Estate Plan

The local Long Beach legal newspaper, The Reporter, published an interesting article called, "The 6 Questions You Must Ask the Attorney Before You Spend a Dollar on Estate Planning." While we don't want to copy the article verbatim, this post will identify the questions and our answers to the same.

1. How long has the attorney been doing estate plans?

This is an important question. The Reporter said that it takes years to become proficient in this practice area. You want to hire an attorney that knows what they are doing. They have years of experience in this field. They know how to handle probate, related litigation, they know how to administer a trust, and most importantly -- they know what they don't know! If an attorney can spot the issues regarding your situation they can advise you to bring in the expert or seek counsel of a more experienced attorney. At TLD, we have four estate planning attorneys with varying years of experience. We work as a team and for more complex matters, we have ample research materials available and experts on tap if your situation warrants it.

2. Does the attorney understand your needs?

Your attorney should have a real life situation that mirrors yours. In other words, the attorney should practice what they preach. This was posted yesterday -- see the post here. For example, TLD attorneys have gone through the probate process themselves, have kids, have large families, own rental property and a host of other real life situations that you can relate to.

3. Will it cost to talk to your attorney?

The Reporter says to ask how your attorney will bill you. For many clients, our estate planning fees are done at a flat fee basis. So whatever questions you have during the process is captured by the flat fee.

Each of our attorneys are readily accessible by email and welcome such inquiries.

Sometimes a client will have a matter requiring extra attention, specific legal research or addititional work -- for these clients we tell them up front and either quote a second flat fee or charge them hourly. You will not be suprised on how your matter will  be handled from a billing standpoint.

Whether we charge a consultation fee for the initial meeting depends on the attorney you are seeing. You can ask the person who is scheduling your appointment if there will be a fee. If there is a fee, it will be modest and often waived if you retain our firm for services.

4. Is the attorney part of a trust mill?

This is the worst scenario. The attorney runs a daily or weekly ad in the local paper offering estate plans at some low price. This is usually the first indicator that it is a trust mill. There are a few attorneys notorious for running a trust mill in our area. We know who they are.

The Reporter says what is also bad are attorneys who do not do estate planning as a regular part of their practice. The Reporter says, "All they know about estate planning is how to use their software and send out advertising. If you are considering this type of attorney, you're better off with a $100 do it yourself software kit from Office Depot."

5. Does the attorney know about taxes and trust administration?

The Reporter strongly urges that you want an attorney who knows how to handle trust administration when the person has died. The attorney who handles a variety of matters in this practice area will know how to draft trusts, administer them after someone dies, handle related probate and in general help you with strategies to avoid a legal mess later on for you or your loved ones.

Most attorneys do not offer tax advice. But we have close relationships with certified public accountants and can spot tax issues... we can be part of your team that will help address the tax issues arising from your estate plan. We can help explain the tax issues and work with your tax advisor.

We have a strong trust administration practice. See our post on this topic.

6. Will the attorney be there for you, your family and your business?

This goes without saying. But we are saying it... find a firm that has been around. Find an attorney that you like. They can be mutually exclusive.

________
Estate Planning, Probate and Trusts involve complex areas of law. Individual circumstances must be considered before any advice can be given.  The general information above is not to be construed as legal advice, which can only be given after consideration of the unique facts of each matter. Please seek the advice or counsel of your attorney, financial advisor or CPA as it may be appropriate.

Even Estate Planning Attorneys Have An Estate Plan

One of the key mantras in life is to do for yourself what you advise others to do.

So, if you meet with a financial advisor with young kids who is pushing an education (Coverdell) IRA, 529 savings plan or other product to save for college expenses -- ask if he or she has their own college expense plan in place for their own children. Same idea for those who sell life insurance or even long term care insurance. (Dare I mention doctors who pitch laser eye correction surgery or derma products like botox?)

Someone pitching a product should wholly endorse the product to the extent that they even have it in one place (or use it) themselves.

Of the four attorneys at TLD who offer estate planning services to our clients, each of us has our own estate plan in place. We feel very strongly based on our experiences as attorneys, whether in practice for 8 years or 20 years, that an estate plan is a must for every individual.

Remember an estate plan for most individuals and families includes a Will (a pour-over Will is often used), a Revocable Living Trust (especially if there is real estate), Durable Power of Attorney for Financial Affairs and an Advance Health Care Directive. These four documents should be in place for every one and updated as changes occur in life. Changes such as divorce, death and new babies often require the estate plan to be updated.

Do you have yours?

________
Estate Planning, Probate and Trusts involve complex areas of law. Individual circumstances must be considered before any advice can be given.  The general information above is not to be construed as legal advice, which can only be given after consideration of the unique facts of each matter. Please seek the advice or counsel of your attorney, financial advisor or CPA as it may be appropriate.

Deathbed Signings.

Our firm attorneys routinely make visits to where the client is located to execute their estate planning documents. We bring a notary to notarize the documents and to act as a witness during these signings.

We prefer not to make these visits because it almost always means that the client is suffering from an illness, is terminal or otherwise not able to make it to one of our offices. In other words, it means we are handling an estate plan in a precarious time and situation. The timing because the client is dying or aging rapidly... the situation because the estate plan could be contested for lack of capacity or undue influence.

But we do make these visits.

Things to be aware of:

• When we visit the clients, we reserve the right to leave without executing the estate plan if we feel the client has no capacity or is being unduly influenced.
  
• It costs more. You have to pay for travel time and related costs. And possibly even a rush fee.
  
• It's harder to understand the nature of your own estate plan when you are not feeling well.
  
• And it's a final realization that your estate planning should have been taken care of earlier. Instead of focusing on your health, well-being and comfort, you are focusing on stressful matters like estate planning in a very precarious time and situation.

Think about getting your affairs in order now while life and the living is good. You won't regret it.

Beneficiary Designations.

Having properly designated beneficiaries is a crucial component of estate planning.

Many financial products (for example, life insurance policies, bank accounts, retirement accounts, savings bonds and annuities) allow you to designate a payable on death beneficiary,which, in most instances, will avoid probate of that particular asset upon your death. This passing to your designated beneficiary after death is called a nonprobate transfer.

It is a good idea to review at least annually your beneficiary designations for your financial accounts and ensure that they are in line with your estate plan. Be sure to also tell your estate planning attorney what financial products you have and who you have designated as your beneficiary as it becomes an important component of your estate plan. There can be unintended consequences for making certain beneficiary designations in certain financial products.

Also, if you are divorced and have named your former spouse as as beneficiary, California Probate Code Section 5600 states that any beneficiary designation involving a former spouse made before or during the marriage may be subject to automatic revocation to that former spouse once the divorce is finalized. There are exceptions. If you wish to leave a certain asset to your former spouse, you will need to make this clear after the date of dissolution. Don't rely on this code provision after a divorce -- review all your beneficiary designations and update them especially after a divorce or death in your family.

________
Estate Planning, Probate and Trusts involve complex areas of law. Individual circumstances must be considered before any advice can be given.  The general information above is not to be construed as legal advice, which can only be given after consideration of the unique facts of each matter. Please seek the advice or counsel of your attorney, financial advisor or CPA as it may be appropriate.

Estate Planning & Organization Go Hand in Hand.

Don't you love it when you walk into stores this time of the year and you see stacks upon stacks of clear plastic containers and other paraphernalia for getting your house and life organized for the new year? Whether or not you love it, it is a good reminder that being organized and going through your things every year helps with clutter and creating a clean slate for the new year.

With that in mind, Leanna Hamill, an estate planning attorney from Massachusetts, posted about a NY Times article and the importance of keeping your estate planning documents organized and at the ready. Read her post here.

Two Questions from a Reader.

A reader wrote last year: 

"Two questions came to mind that maybe your other readers (and perhaps future clients) might be wondering.  First, if an unmarried couple holds title to a home in Joint Tenancy, is there really a need to add the property to the trust since title would pass outside of probate to the survivor anyway?  Second, do settlors/grantors have to record their living trusts in California in order to effectuate it?  (E.g., do banks, etc. want to see that the trust has been recorded with the County recorder?)"

While there are easy answers to these kinds of questions, it really depends as legal advice regarding estate planning must be specific to that client's needs, desires and situation especially as it relates to the first question.

The second question, to answer it first, a living trust does not need to be recorded to be effective in California. It can be recorded. Reasons for recording a trust should be explored with your attorney as recording a trust makes it a public record.

The best answer to the first question is that while an unmarried couple may acquire property as joint tenants with right of survivorship, it only delays probate of the property upon the death of the second joint tenant after the first joint tenant has died. Also, sometimes a couple may decide that tenants in common ownership is preferred. All the more reason to consult with your attorney, tax advisor and others to determine the best way to hold title to property and how it affects estate planning decisions.

Thanks for the questions. We will try our best to answer them when asked to do so in this blog.

________
Estate Planning, Probate and Trusts involve complex areas of law. Individual circumstances must be considered before any advice can be given.  The general information above is not to be construed as legal advice, which can only be given after consideration of the unique facts of each matter. Please seek the advice or counsel of your attorney, financial advisor or CPA as it may be appropriate.

Don't Disinherit By Accident.

A common mistake in drafting estate planning documents are provisions that disinherit children by accident. Remember what happened to Anna Nicole's daughter Dannielynn? [A fitting way to wrap up the last post of the year... with one of the more notorious deaths in 2007.]

Read the article from bankrate.com about this common mistake.

To avoid this mistake should it have drastic consequences for your estate, review your estate planning documents including your Wills and Trusts to see what provisions are in there for intentionally omitting after born children. If you don't understand this provision or want to double check, check in with your estate planninig attorney.

________
Estate Planning, Probate and Trusts involve complex areas of law. Individual circumstances must be considered before any advice can be given.  The general information above is not to be construed as legal advice, which can only be given after consideration of the unique facts of each matter. Please seek the advice or counsel of your attorney, financial advisor or CPA as it may be appropriate.

Year End, New Year's Reminders

While you are organizing and putting away things around the home from the holiday season, don't forget to review your existing estate plan. If you don't have an existing estate plan, 2008 would be a great year to get started.

For 2008:
1. Review your existing estate plan. Things to look for: make sure your wishes are being met, make sure your asset schedule is up to date and make sure the family structure (births, divorces and deaths), nominations for trustees and any special provisions remain applicable.

2. Check your beneficiary designations for all of your financial products (retirement accounts, life insurance policies, annuities, bank/brokerage accounts) to ensure they are up to date

3. If you have a trust, make sure all of your important assets as advised by your attorney are transferred into your trust (double check newly acquired assets and real property holdings)

4. Work with your attorney to update your estate plan, beneficiary designations and asset transfers accordingly

5. If you don't have an estate plan in place, make 2008 the year it gets done

________
Estate Planning, Probate and Trusts involve complex areas of law. Individual circumstances must be considered before any advice can be given.  The general information above is not to be construed as legal advice, which can only be given after consideration of the unique facts of each matter. Please seek the advice or counsel of your attorney, financial advisor or CPA as it may be appropriate.