Maintain copies of every beneficiary form, confirmations of changes, plan agreements, and any trust documents named as beneficiaries. Share a secure summary with your fiduciaries so they can act immediately.

Yes—but never outright. Use a properly drafted third-party Special Needs Trust named as beneficiary. That preserves public benefits and allows trustees to supplement quality of life while following distribution rules.

• Multi-year withdrawal planning within the 10-year window
• Roth conversions during your lifetime (tax now, potentially tax-free later for heirs)
• Charitable remainder trusts (CRTs) in select cases to replicate a longer “stretch” for philanthropic families
• Qualified charitable distributions (QCDs) from your IRA at 70½+ to reduce future taxable balances

Beneficiary forms override your will and can undermine a carefully drafted trust. After you sign your plan, retitle and update beneficiary forms so everything points to the right people or trusts. Review after marriage, divorce, birth/adoption, deaths, moves, and major asset changes.

Surviving spouses can roll the IRA into their own (often best for younger spouses who won’t need funds until 59½) or elect inherited IRA status (sometimes better if distributions are needed sooner or the decedent was older). The right choice depends on age, income needs, and penalty exposure.

California has no separate estate tax, but it taxes IRA distributions as ordinary income. There’s no special state exclusion for inherited IRAs. Plan withdrawals with both federal and California brackets in mind.

The IRA usually defaults to your estate—often the worst outcome. That can trigger shorter payout windows, higher taxes, probate delays, and exposure to estate creditors. Always name primary and contingent beneficiaries and update after life changes.

Yes—done correctly. A properly drafted see-through (look-through) trust can preserve favorable payout rules while adding control for minors, special-needs beneficiaries, or loved ones who need guardrails. A poorly drafted trust can trigger accelerated taxation (often a five-year payout). Use a California estate planning attorney who regularly coordinates retirement accounts and trusts.

Qualified Roth distributions are income-tax-free, but the 10-year rule still applies for most beneficiaries. Leaving a Roth to heirs can be powerful—especially if your heirs will be in high brackets later.

Distributions are taxable income in the year taken (federal and California). Waiting until year 10 can spike taxes. Many beneficiaries smooth withdrawals over multiple years to manage brackets and Medicare IRMAA. Coordinate with a CPA and estate attorney.

Eligible Designated Beneficiaries (EDBs) can still stretch over life expectancy:

• A surviving spouse
• Your minor child (until majority, then the 10-year clock starts)
• A beneficiary who is disabled or chronically ill
• A beneficiary less than 10 years younger than you

Each category has precise definitions. Get advice before claiming EDB status.

For deaths in 2020 or later, most non-spouse beneficiaries must empty the inherited IRA by December 31 of the 10th year after death (the “10-year rule”). There are no annual RMDs during the 10 years, but the account must be fully distributed by the deadline. The rule applies to both traditional and Roth IRAs.

Your IRA bypasses your will or living trust and follows the beneficiary designation on file with the custodian. That form controls—period. The beneficiary receives an inherited IRA and must follow IRS payout rules. Keep beneficiary forms current and coordinated with your estate plan.

Veterans who have disabilities, medical conditions, or injuries incurred or aggravated during active military service may be eligible to receive tax-free monthly benefits. To be eligible for disability benefits, you must show:

• You have a current physical or mental disability.
• You had an injury or disease in service or experienced an event in service that caused or aggravated an injury or disease.
• There is a link between your current disability and the event, injury, or disease in military service.

To qualify for DIC benefits as a surviving spouse, the following eligibility guidelines apply:

• You were married to a Servicemember who died on active duty, active duty for training, or inactive duty training, OR
• You were validly married the Veteran before January 1, 1957, OR
• You were married to the Veteran within 15 years of discharge from the period of military service in which the disease or injury that caused the Veteran’s death began or was aggravated, OR
• You were married to the Veteran for at least one year, OR
• You had a child with the Veteran, AND
• You cohabited with the Veteran continuously until the Veteran’s death or, if separated, was not at fault for the separation, AND
• You are not currently be remarried

The most well-known benefit available to a surviving spouse is Dependency and Indemnity Compensation (DIC). Dependency and Indemnity Compensation (DIC) is a tax-free monetary benefit paid to eligible survivors of military Servicemembers who died in the line of duty or eligible survivors of Veterans whose death resulted from a service-related injury or disease.

The Veteran’s Aid & Attendance (VA&A) program is intended to provide additional monetary assistance above and beyond that provided by the VA pension program. The additional assistance is aimed at helping veterans who need help with daily tasks of living, such as dressing, bathing, or cooking by providing the financial resources to hire so someone to help. The maximum benefit amount for Veterans Aid & Attendance will depend on the category under which you qualify and will be subject to change each year. Housebound benefits are like Aid and Attendance benefits but require a beneficiary to be substantially confined to his or her immediate premises because of a permanent disability.

The general guidelines for the veteran’s pension program indicate that you might qualify if you:

• Were discharged from service under other than dishonorable conditions, AND
• Served 90 days or more of active military, naval or air service with at least one day during a period of war, AND
• Have countable income below the maximum annual pension rate, AND
• Meet the net worth limitations, AND
• Are age 65 or older OR you are shown by evidence to have a permanent and total non-service-connected disability, OR you are a patient in a nursing home, OR you are receiving Social Security disability benefits.
• Veterans who entered active duty after September 7, 1980, must also have served at least 24 months of active-duty service. If the total length of service is less than 24 months, the Veteran must have completed his/her entire tour of active duty.

Veteran’s pension program provides monthly benefit payments to certain wartime veterans with financial need, and their survivors. The veterans pension program is a needs-based benefit paid to a wartime veteran and his/her survivor(s).

No. California does not collect an inheritance tax or an estate tax.

The annual exclusion allows each taxpayer to gift up to $16,000 (as of 2022) in assets to an unlimited number of beneficiaries each year tax-free. Gifts made using the annual exclusion do not count toward your lifetime exemption limit. Couples can gift-split and gift assets valued at up to $32,000. By way of illustration, a married couple with four adult children could transfer $128,000 in assets each year without using any of their lifetime exemption amount.

Portability refers to a surviving spouse’s ability to use any unused portion of a deceased spouse’s lifetime exemption. For example, imagine that you are married, and your spouse passes away in 2022 leaving behind an estate (including lifetime gifts) valued at $6 million.  Because your spouse did not use all his/her current lifetime exemption limit, the remainder would “port” over to you. You could then use that remainder, along with your own lifetime exemption, when your estate is probated.

Every taxpayer is entitled to make use of the lifetime exemption before calculating federal gift and estate taxes. Think of this as a deduction that comes off the top of the total value of your taxable estate. Historically, the lifetime exemption limit also fluctuated on a regular basis until the passage of ATRA. ATRA set the lifetime exemption limit at $5 million, to be adjusted annually for inflation. Legislation passed in 2017, however, changed the lifetime exemption amount for 2018 and for several years after that. For the year 2022, the exemption amount increased to $12.06 million for individuals and $24.12 million for married couples. In 2026, however, the exemption amounts are scheduled to revert to the 2017 levels, adjusted for inflation.

No. An estate tax is a tax imposed on the estate while an inheritance tax is a tax imposed on an individual when they inherit assets. As such, estate taxes must be calculated and paid by the estate using estate assets prior to any assets being passed down to beneficiaries or heirs. An inheritance tax, on the other hand, is paid by the beneficiary or heir after those estate assets have been passed down.

Determining an estate’s federal gift and estate tax obligation is accomplished by adding the value of all qualifying gifts made during your lifetime to the value of all estate assets owned at the time of death. By way of illustration, imagine that you made gifts during your life worth a combined total of $5 million and you owned assets valued at $10 million at the time of your death. The combined total of $15 million would potentially be subject to federal gift and estate taxes. Before any additional considerations, your estate would owe a staggering $6 million in federal gift and estate taxes.

The federal gift and estate tax is essentially a tax on the transfer of wealth that is imposed and collected at the time of a taxpayer’s death. Both transfers made during a taxpayer’s lifetime in the form of a gift and transfers made at the time of death are subject to the tax. Historically, the estate tax rate fluctuated from year to year; however, with the passage of the American Taxpayer Relief Act of 2012 (ATRA) the tax rate was permanently set at 40 percent. Before considering any credits, deductions, or adjustments to the value of your estate, that means the value of the estate you pass down could be reduced by 40 percent after your death.

California offers three potential alternatives to formal probate for small estates that qualify. Using one of these alternatives will dramatically reduce both the time and expense of probating an estate. The small estate options available in California include:

• Small estate with only personal property. This option may be available for a small estate if the estate consists of personal property only valued at less than $166,250 (as of 2022). When an estate does not include real property, such as a house, the assets that make up the estate may be able to be distributed to the new owners using an affidavit. The value of the estate is determined as of the date of death, not the value today. In addition, you must have the legal right to inherit the assets and you must wait 40 days after the decedent’s death before initiating the transfer of assets.
• Small estate with personal and real property. This option applies if the total value of all probate assets is valued at $166,250 or less (as of 2022). If the estate includes both personal and real property but is worth less than $166,250, you may be able to use a form entitled Petition to Determine Succession to Real Property. You will have to file the Petition with the court, obtain and file an Inventory and Appraisal, and provide notice of a hearing. You are also required to have the legal right to inherit the property and must also wait 40 days after the decedent’s death before initiating this simplified probate procedure.
• Spouse or domestic partner of the decedent. If you are the decedent’s spouse or domestic partner, you may be able to file a Spousal or Domestic Partner Property Petition which will result in a court order that states what your share of the community property is and what part of your deceased spouse or partner’s share of community and separate property belongs to you.

Assets are classified as probate or non-probate at the beginning of the probate process. Assets that are considered non-probate assets bypass probate altogether and can be distributed directly to the named beneficiaries. Common examples of non-probate assets include:

• • Assets held in a trust
  • Proceeds of a life insurance policy
  • Certain types of jointly held property
  • Assets held in an account with a “payable on death (POD)” or a “transfer on death (TOD)” designation
  • Certain retirement and pension accounts

A complex estate can take months, even years, to get through the formal probate process. Creditors have up to a year to file a claim against an estate in California. Those claims then must be reviewed and paid or denied. For this reason, even a relatively small estate can easily take over a year to get through formal probate. Along with the time it takes to get through formal probate, it can also be very expensive because everyone involved in the probate of the estate (Executor, lawyers, appraisers, accountants) is entitled to a fee. This can dramatically diminish the value of the estate that is ultimately passed down to loved ones.

Although the probate process is unique for every estate, common steps in the process include:

• • Identifying, locating, and valuing all estate assets.
  • Categorizing assets as probate or non-probate assets.
  • Opening the probate of the estate.
  • Notifying creditors of the estate that probate is underway.
  • Reviewing and approving or denying creditor claims.
  • Prioritizing and paying approved claims.
  • Defending any challenges to the Will or litigating any claims.
  • Calculating any paying federal (and state, if applicable) gift and estate taxes.
  • Transferring any remaining assets to the named beneficiaries and/or legal heirs of the estate.

If the decedent left behind a valid Last Will and Testament, the individual named as the Executor in that Will is responsible for overseeing the probate process and the terms of the Will are used to determine how the estate assets are distributed. If the decedent died intestate (without a Will), someone typically volunteers to oversee the probate of the estate using the state intestate succession laws to determine how assets are distributed.

Most people leave behind an estate when they die that consists of all assets, both tangible and intangible, owned by the decedent at the time of death. Probate is the legal process by which those assets are identified, located, valued, and eventually distributed to the intended beneficiaries and/or legal heirs of the estate.

The best way to plan for the possibility that you will develop Alzheimer’s, or another form of dementia is to incorporate specific tools into your overall estate plan, such as:

• • Revocable Living Trust. Creating a revocable trust and naming yourself as the Trustee along with someone of your choosing as the successor Trustee is a common incapacity planning tool. Major assets are transferred into the trust and managed by you if you can do so. In the event of your incapacity, your chosen successor Trustee takes over automatically and without the need for any additional legal steps to be taken.
  • Healthcare Power of Attorney. This is a type of advance directive that allows you to appoint an Agent who will have the legal authority to make healthcare decisions for you if you cannot make them for yourself due to incapacity.
  • Living Will. Another type of advance directive that lets you make important decisions regarding certain types of medical treatment now in the event you are unable to provide informed consent at a later date.

Some causes of dementia are reversible, but not dementia related to Alzheimer’s. Thyroid conditions or vitamin deficiencies, for example, can cause dementia; however, if they are identified and treated dementia associated with those conditions can be reversed.  Unfortunately, Alzheimer’s accounts for about three out of every four cases of dementia.

• Experts tell us that age is the greatest risk factor for the development of Alzheimer’s disease. The older you are, the higher the risk of developing the disease. One in nine people over the age of 65 have Alzheimer’s disease, and this figure rises to one in three for people over the age of 85.
• Family History. Experts also appear to agree that family plays a role in predicting who will develop Alzheimer’s disease. A family history of Alzheimer’s disease will increase your chance of getting the condition, particularly if it is a brother, sister, mother, or father who had/has the disease. The risk is greater if more than one family member has or has had the disease.
• Researchers have identified certain mutated genes associated with the disease. Anyone who inherits a copy of the APOE-e4 gene is at greater risk, and the risk is even greater if they inherit two copies of the gene. There are also deterministic genes that, if inherited, would guarantee the onset of the disease. This only accounts for around one percent of Alzheimer’s cases and often the patients suffer from early-onset Alzheimer’s.
• Head Injury. We don’t hear much about this one, but there is evidence to suggest that head trauma may lead to Alzheimer’s disease, particularly repeated head trauma.
• Heart Health. The risk of Alzheimer’s disease increases if you suffer from conditions that can affect the heart, such as stroke, high blood pressure, diabetes, and high cholesterol.
• Latinos and African Americans are one and one-half to two times more likely to develop Alzheimer’s than Caucasians. The reason for this is unclear, although many think the higher rate of heart problems in Latinos and African Americans may be the cause.

Unlike many other diseases, such as AIDS, experts do not believe Alzheimer’s has a single cause. Instead, they believe the disease is multi-faceted with several factors influencing the development of the disease. The complexity of the disease makes finding a cure, and even effective treatment for those suffering from the disease, more difficult.

According to the Alzheimer’s Foundation of America (AFA), Alzheimer’s disease is a progressive, degenerative disorder that attacks the brain’s nerve cells, or neurons, resulting in loss of memory, deterioration of thinking and language skills, and behavioral changes. These neurons, which produce the brain chemical, or neurotransmitter, acetylcholine, break connections with other nerve cells and ultimately die. For example, short-term memory fails when Alzheimer’s disease first destroys nerve cells in the hippocampus, and language skills and judgment decline when neurons die in the cerebral cortex.

No. Dementia is a broad term used to refer to a group of symptoms that may include impaired thinking and memory. The National Institute of Neurological Disorders and Stroke defines dementia as a “word for a group of symptoms caused by disorders that affect the brain. It is not a specific disease. People with dementia may not be able to think well enough to do normal activities, such as getting dressed or eating. They may lose their ability to solve problems or control their emotions. Their personalities may change. They may become agitated or see things that are not there. Dementia is often associated with the natural cognitive decline that occurs with aging. While Alzheimer’s can lead to dementia, conditions other than Alzheimer’s can also be the root cause of dementia, such as Huntington’s Disease, Parkinson’s Disease, and Creutzfeldt-Jakob disease.

The goal of the California intestate succession laws is to distribute assets to a legal heir. As such, a search will be made for more distant heirs (aunts, uncles, cousins) before deciding that you have no legal heirs. If, however, an heir is not located, your estate will escheat to the State of California, meaning that the State of California will take possession and ownership of the assets.

It depends on who survived you. If you left behind a spouse but no descendants, your spouse will get everything. If you left descendants but no spouse, your descendants will inherit everything. If you left behind a spouse and one child, your spouse inherits all your community property and 1/2 of your separate property and your child inherits the rest. If a spouse and two or more children survived you, your spouse inherits all your community property and 1/3 of your separate property, and your children inherit the rest.

No. Certain assets can be distributed without going through probate. Common examples include trust assets, assets owned jointly with rights of survivorship, proceeds of a life insurance policy, and retirement/pension accounts.

Yes. California offers a Small Estate Affidavit that may be used if the gross estate does not exceed $166,250 (as of 2023). A Small Estate Affidavit cannot be used to transfer real property (a house or land for example), but another small estate alternative may be available.

An Executor is appointed in a Will. A Trustee is appointed in a trust. Either can oversee the distribution of assets; however, in the absence of a Will or trust (an intestate estate) the court will need to appoint someone to be the Personal Administrator. That person will oversee the probate process.

No. A beneficiary is someone who is specifically named in a Will, trust, life insurance policy, or another legal document to inherit assets after your death. An heir is someone who is legally entitled to inherit from your intestate estate. A beneficiary may also be an heir and vice versa, but they are not interchangeable terms.

Probate is the name given to the legal process that follows the death of an individual. Along with inventorying and securing estate assets, probate allows creditors of the estate to file claims and ensures that taxes are paid. Eventually, any remaining estate assets are transferred to beneficiaries and/or heirs of the estate.

If you leave behind a valid Last Will and Testament when you die, the estate you leave behind will be referred to as a “testate” estate. On the other hand, if you fail to leave behind a Will (or a trust that distributes your estate) the estate you leave behind is referred to as an “intestate” estate.  Leaving behind a testate versus an intestate estate will dramatically impact what happens after you are gone.

Throughout your working years, your retirement plan and your estate plan may have been separate plans. As you near retirement age, however, those two plans should be merged to ensure that they work in harmony with one another. When you retire, your income will undoubtedly change. Knowing how much to expect from Social Security is an important part of budgeting for retirement and may impact what you decide to do with other assets as you near retirement age.

The easiest way to apply for benefits is online through the Social Security Administration website. You can also apply by phone by calling 1-800-772-1213 or by contacting your nearest SSA field office.

You can find out how much you have paid to date as well as get an estimate of what your benefit will be by navigating to the Social Security Administration’s website. You can access information showing how much you have paid into Social Security Retirement every year as well as use the Retirement Estimator tool to get an idea of what your retirement benefit will be when you retire.

Yes. Starting your benefits early or late will significantly impact how much you receive each month. If you start your benefits early (prior to age 66 or 67 for those born after 1960), Social Security reduces the monthly payment by 5/9 of 1 percent for each month before full retirement age, up to 36 months, and 5/12 of 1 percent for each additional month. By way of example, if you were born in 1960, meaning you will turn 62 in 2022, your retirement benefit amount would be reduced by 30 percent if you retire early at age 62. Conversely, your retirement benefit amount is increased by eight percent for every year you delay receiving benefits, up to age 70. For most people, that means your benefit amount could be increased by 24 percent by retiring at age 70 instead of age 67.

The soonest you can start receiving payouts from Social Security Retirement is age 62 and the latest is age 70; however, you may choose to begin anywhere in that eight-year span. The longer you wait to start getting payments the more your monthly payments will be when you start receiving them and they will stay that amount forever. Conversely, if you start taking your benefits earlier, your monthly payment will be less for the rest of your life.

Yes. You may be eligible to receive Social Security Retirement benefits based on the work history of your ex-spouse if you were married for at least ten years, you are not now married, and you are at least 62 years old. If your own benefit amount is higher, you will receive your own benefits; however, if you would receive a higher benefit based on your ex-spouse’s work history you are entitled to that amount.

Yes. You may be eligible for retirement benefits based on your spouse’s work history if you are a widow or widower. The earliest you can start survivor benefits is at age 60. If you also qualify for benefits based on your own work record, you can switch to those benefits if they are higher after you reach age 62.

To qualify for Social Security benefits when you retire you must accumulate sufficient credits, based on your earnings, over the course of your working years. The amount you need to earn to accumulate one credit has increased over the years to keep up with inflation. For 2023, you get one credit for every $1,640 you earn, up to a limit of four credits per year. Once a credit is earned it remains on your record forever. If you were born after 1929, you need 40 credits to receive Social Security retirement benefits.

The Social Security Retirement system has been around since the 1930s and is based on contributions workers make to the system. While you are employed, you pay into Social Security, and then you receive benefits later when it’s your turn to retire. On your paycheck, the contributions will appear as the Federal Insurance Contributions Act (FICA) taxes.

At an average yearly cost of over $100,000 per year nationwide (and considerably higher in California), the cost of long-term care can threaten a retirement nest egg. Medicaid planning is the key to avoiding the threat posed by the high cost of long-term care. As part of your Medicaid planning component, you may create a special type of irrevocable trust known as a Medicaid trust. This trust will protect your assets and ensure that you qualify for Medicaid if you need it in the future.

If you wish to make gifts to an adult child, one way to avoid the possibility of those assets being lost in a divorce is to use a trust to gift those assets. The assets legally belong to the trust until they are distributed to your child, meaning they will not be subject to the division of assets in the event of divorce.

Entering into a pre-nuptial agreement prior to the marriage can protect assets from the division of assets required should the marriage end in divorce. One thing you also need to avoid is “co-mingling” assets during the marriage which turns your separate property into marital property.

If a beneficiary has a history of addiction, mental illness, or mismanaging money, gifting assets in a trust that includes a spendthrift provision is an excellent way to protect those assets. The terms of the trust can also be used to determine how the assets can be used by the beneficiary. Appointing the right Trustee further serves to protect the assets from loss or misuse by the beneficiary.

Certain types of joint ownership protect each owner from claims or liens of the other owner(s). With other types of joint ownership, however, your interest in the property could be at risk because of a lien or claim filed against the co-owner(s). Another common strategy is to transfer assets into an irrevocable trust. Once the assets are transferred, they are legally owned by the trust and out of the reach of most creditors and third parties.

The key to avoiding (or diminishing) estate taxes is to decrease your taxable estate. A popular way to do that is to make lifetime gifts. One commonly used tool used to make those gifts is the annual exclusion.  This tool allows you to make gifts valued at up to $16,000 ($32,000 if you gift-split with a spouse) to an unlimited number of beneficiaries each year tax-free. Gifts made using the annual exclusion do not count toward your lifetime exemption.

Common threats to your assets include divorce, economic downturn, and failed business ventures as well as the impact that federal and/or state gift and estate taxes could have on your estate assets. Threats you may not have considered include the divorce of a beneficiary, spendthrift beneficiaries, and the high cost of long-term care. The good news is that estate planning tools and strategies can help you protect your assets from all these threats.

If you believe that the Trustee is not properly fulfilling the duties and responsibilities of a Trustee, you may be able to have the Trustee removed and replaced. Sometimes, the terms of a trust agreement specifically grant authority to remove a Trustee to a beneficiary, a group of beneficiaries, an attorney, or other designated individual/group. Even if the authority to remove the Trustee was not explicitly given to the beneficiaries in the trust agreement, the beneficiaries may still be able to petition the court for the right to remove the Trustee.

As a trust beneficiary you have several important rights granted by law and you may have additional rights granted to you in the trust agreement. Among the most basic rights a trust beneficiary has are the right to:

• Receive scheduled distributions. If you are a current beneficiary, you have a right to receive any distributions due to you under the terms of the trust agreement. If you are a future beneficiary, you have the right to be considered when making decisions that could impact your future distributions.
• Request an accounting. You have the right to receive a full accounting showing things such as what assets the trust holds, how much interest has been earned by the trust, and what expenses have been paid by the trust. This is an especially important right to remember if you are concerned about the way in which the Trustee is administering the trust.
• Be informed about trust business. You have the right to be kept informed about trust business and to be able to communicate with the Trustee of the trust.

Maybe. Many trust agreements include an anti-alienation clause that effectively prevents a beneficiary from selling or encumbering his/her interest in the trust. Conversely, the provisions of a trust may specifically give a beneficiary the power of appointment, effectively giving the beneficiary the ability to transfer his or her inheritance to a third party. If the trust agreement is silent, state law governs whether a beneficiary can sell or encumber his/her interest in trust assets.

Yes, you have an ownership interest in the assets held in a trust if you are a beneficiary; however, you do not have a right to access the assets until the trust terms dictate that you are entitled to a disbursement. The nature and extent of your ownership interest will depend on the terms of the trust. A trust can have current and future beneficiaries, for example, which will impact your ownership interest in the assets.

A Trustee, appointed by the creator of a trust, is responsible for administering a trust. The Trustee holds all trust property for the benefit of the beneficiaries named in the trust agreement. The trustee of a trust can be an individual, several individuals acting as Co-Trustees, or an entity such as a bank.

Yes. All trusts are first divided into one of two categories – testamentary or inter vivos – the latter of which is more commonly referred to as a living trust. A testamentary trust is a trust that arises upon the death of the Settlor and which is typically activated by a provision in the Settlor’s Will.  A living trust is a trust that takes effect as soon as all the formalities of creation are in place. Trusts can also be revocable or irrevocable.

A trust is a legal relationship that entails property being held by one party for the benefit of another. A trust agreement is the legal document that sets forth the terms of a trust. A trust is created by a Settlor (also referred to as a Maker or Grantor), who transfers property to a Trustee, also named by the Settlor.

Digital estate planning isn’t something you can afford to put off. Your digital life is valuable—financially, emotionally, and practically. And the people you care about most are the ones who suffer if it’s not handled properly.

By planning ahead, you:

• Prevent legal headaches
• Protect your family’s access
• Safeguard your digital assets and income
• Ensure your online legacy reflects your values

Whether it’s your crypto wallet, your Instagram memories, or your online business—if it matters to you now, it deserves to be protected later.

Start today. Your digital legacy won’t wait.

Worried about what happens to your private data after you’re gone?

Here’s how to protect your digital privacy:

• Include detailed instructions for deleting or managing accounts
• Use a secure digital vault or encrypted storage
• Regularly update your plan as accounts and platforms evolve
• Ensure only trusted people have access to sensitive materials

If you earn income online, your digital presence is part of your business empire. Don’t let it vanish without a plan.

You’ll need to:

• Transfer domain ownership and admin access
• Designate someone to manage or wind down operations
• Include intellectual property in your estate documents
• Protect customer data and business logins

Cryptocurrency is the digital asset most at risk of being lost. Without access to your private keys or wallet credentials, there is no recovery process.

To secure your crypto:

• Record your wallet keys and passwords in a secure location
• Identify who should inherit or manage your crypto
• Include these assets in your estate plan

Creating a digital estate plan doesn’t have to be complicated, but it does need to be intentional. Start here:

1. Inventory Your Digital Assets

Make a comprehensive list of your online accounts, platforms, and digital properties. Include URLs, usernames, and where credentials are stored.

2. Choose a Digital Executor

Appoint a trusted individual who understands tech and can manage your digital estate. They’ll be responsible for accessing accounts, transferring assets, and honoring your wishes.

3. Leave Instructions

Be specific: Should your social media be deleted or memorialized? Who should access your crypto wallet? What happens to your blog or YouTube channel?

4. Secure Access

Use a password manager or encrypted file to store login details. Make sure your executor knows how to access it when the time comes.

5. Update Legal Documents

Include digital asset provisions in your will or trust. California’s RUFADAA law allows your executor legal access, but only if you’ve authorized it in your estate planning documents.

Without a digital plan in place, your loved ones could face:

• Locked accounts: Companies like Apple, Google, and Facebook have rigid privacy policies that may deny access—even to immediate family.
• Lost assets: Crypto, digital earnings, or online royalties could be lost forever without the right access credentials.
• Legal limbo: Even with a traditional estate plan, digital assets may not be covered unless they’re explicitly included.
• Family friction: Conflicts can emerge when no one knows your wishes—or who’s in charge.

Let’s be clear—digital assets are more than just Bitcoin and email:

• Social media accounts (Facebook, Instagram, X)
• Online banking and investment platforms
• Cryptocurrency wallets (Bitcoin, Ethereum, etc.)
• Email inboxes and cloud storage (Google Drive, iCloud, Dropbox)
• Digital media libraries (photos, videos, music)
• Blogs, websites, and domain names
• eCommerce stores or affiliate platforms
• Loyalty rewards and airline points

If it lives online, it’s part of your digital estate.

Digital estate planning is about securing your online accounts, digital assets, and intellectual property for your loved ones after you’re gone—or if you’re no longer able to manage them.

Think of it this way: your will might say who gets the house, but what about your Gmail account? Your crypto wallet? The content library you’ve been building for years? The Dropbox folder where your family photos live?

Without a plan, they may disappear. Or worse—get locked away permanently due to strict privacy policies and data regulations.

1. List your agents (medical and financial) and at least one backup.
2. Inventory assets and confirm how each is titled.
3. Draft a revocable living trust, pour-over will, advance health care directive + HIPAA release, and durable power of attorney.
4. Name guardians and create sub-trusts for children.
5. Update beneficiary designations to match the plan.
6. Document final wishes (name, pronouns, memorial, remains).
7. Store originals safely and tell your agents where they are.

Review after major life changes: marriage or registered partnership, divorce or dissolution, adoption/parentage updates, a move, name change, significant assets acquired or sold. Revisit beneficiary forms whenever your plan changes—those forms override a will or trust.

State your preferences explicitly: name, pronouns, attire, visitation, funeral/memorial plans, and disposition of remains. Put this in your health directive and a separate final arrangements memorandum. Choose agents who will honor and defend those instructions.

Registered domestic partners in California generally receive many of the same state-law rights as spouses (including community property rules), but federal treatment can differ. An attorney can help you weigh marriage vs. domestic partnership vs. staying unmarried based on taxes, benefits, and your goals.

Plan on two tracks—parentage and inheritance:

• Confirm legal parentage (adoption, judgment of parentage, or other recognized paths). Legal recognition reduces challenges at schools, hospitals, and in court.
• Use your will to name guardians, and a trust to manage funds for education, health, and milestones.
• Coordinate beneficiary designations on life insurance and retirement accounts with your trust so money flows exactly as intended.

Create a revocable living trust and title your assets to it. Your successor trustee can manage and distribute property without court (and without public filings). Trusts are especially helpful for blended families, sensitive medical histories, and complex life stories you prefer to keep private.

It’s your medical playbook and your hand-picked decision-maker, in one document. For LGBTQ+ clients, it:

• Prevents disputes over who has a say
• Documents wishes about name, pronouns, and respectful care
• Works hand-in-glove with a HIPAA release so your agent can access records immediately

You choose. Use:

• Advance Health Care Directive to name a medical agent and spell out treatment preferences (including gender-affirming care, visitation, and end-of-life choices).
• Durable Financial Power of Attorney to authorize someone you trust to pay bills, manage accounts, and handle urgent finances.
  These documents override assumptions and keep unsupportive relatives out of the driver’s seat.

If you’re legally married or registered domestic partners, most assets earned during the relationship are community property—each of you generally owns 50%. Unmarried partners do not get community property rights by default. A trust and clear titling prevent ugly surprises.

Absolutely—but only if you put it in writing. Name your partner in your trust, will, and beneficiary designations. Check how your home and accounts are titled (joint tenancy, community property with right of survivorship, tenants in common) and align them with your plan.

California’s intestate succession prioritizes legal relatives. If you’re unmarried—or estranged from family—your assets can bypass a partner or chosen family entirely. A will or trust lets you name who receives what, with no guesswork.

Do married couples still need an estate plan?

Yes. Marriage doesn’t replace planning. A trust can:

• Avoid probate and keep your affairs private
• Direct assets to your spouse and others (children, parents, charities, chosen family)
• Provide protections (e.g., lifetime use of a home, staggered distributions)

Name guardians and backup decision-makers

Even with marriage equality, gaps and misunderstandings still happen—at hospitals, in probate court, and within families. A comprehensive plan puts you in control of medical decisions, guardianship, and who inherits. Without it, California’s default rules may elevate biological relatives you wouldn’t choose.

A trust agreement is the name of the document used to create a trust. Within the trust agreement are the terms, created by the Settlor, that dictate how the trust will operate. Trust administration refers to the Trustee’s job of overseeing the terms of the trust in action. Generally, the more complex and/or valuable the trust assets are, the more time consuming and complicated it is to administer the trust.

One of the most common mistakes Settlors make when creating a trust is to appoint someone close to them, such as a spouse or friend, as the Trustee of their trust without taking to time to contemplate the individual’s suitability for the job. Ideally, your Trustee should have experience in the legal and/or financial field because many of the Trustee duties require a knowledge of law and finance. Instead of simply appointing someone you “trust” as your Trustee, appoint someone who can administer the trust efficiently and economically. You may even wish to consider appointing a professional Trustee.

The Trustee of a trust administers the trust which requires the Trustee to take on a wide range of duties and responsibilities, including:

• Following all trust terms unless they are illegal or unconscionable.
• Communicating with beneficiaries.
• Investing trust assets using the “prudent investor” standard.
• Managing trust assets.
• Distributing trust assets.
• Keeping trust records.
• Preparing and filing trust taxes.
• Defending the trust against legal challenges.

A living trust can help achieve a wide range of estate planning goals; however, some of the more common uses for a living trust include:

• Avoiding probate
• Asset protection
• Incapacity planning
• Medicaid planning
• Planning for parents with minor children
• Special needs planning
• Pet planning

All trusts fall into one of two main categories – testamentary or living trust. A testamentary trust is one that does not become active until the death of the Settlor. Typically, a testamentary trust is triggered by a provision in the Settlor’s Last Will and Testament. A living trust, formally known as a “inter-vivos” trust, activates as soon as all of the formalities of creation are complete, and the trust is funded. Living trusts can be further divided into revocable and irrevocable living trusts. As the names imply, a revocable living trust can be revoked or terminated by the Settlor at any time and for any reason whereas an irrevocable living trust cannot be revoked or terminated by the Settlor after the trust becomes active.

A trust is a relationship whereby property is held by one party for the benefit of another. A trust is created by a Settlor, also referred to as a Grantor or Maker, who transfers property to a Trustee. The Trustee holds, invests, and manages that property for the beneficiaries designated by the Settlor in the trust agreement.

For many Californians—especially homeowners—the answer is yes. If privacy, speed, incapacity planning, and reducing court involvement matter to you, a revocable living trust is often the most efficient core tool. Very small estates or unique tax/asset-protection goals may call for different or additional strategies. The key is tailoring the plan to your people, your assets, and California law.

1. Not funding the trust (signing papers but leaving titles unchanged)
2. Inconsistent beneficiaries (retirement/life insurance designations that conflict with the trust)
3. No incapacity plan (no clear disability standard, no “who steps in when”)
4. Outdated fiduciaries (ex-spouse still trustee; no alternates named)
5. Radio silence with family (confusion breeds conflict—share what they need to know)

If you rely on a will, your executor may face ancillary probate in each state where you own real estate. A funded trust sidesteps that—your successor trustee handles those properties without opening multiple court cases.

That’s the power: it’s customizable. Your trust can:

• Stagger distributions (e.g., at ages 25/30/35) or tie them to milestones (graduation, home purchase)
• Include spendthrift protections to guard inheritances from creditors, lawsuits, and divorce claims
• Carve out special needs provisions to preserve public benefits
• Keep a family home available for a spouse or child, then pass to the next generation
• Address blended family fairness with clarity (and fewer arguments)

Review every 2–3 years and after life events:

• Marriage, divorce, or the birth/adoption of a child
• Death or incapacity of a trustee or beneficiary
• Major asset changes (home purchase/sale, business events)
• Moves between states or significant law updates

Edits can be simple amendments; larger overhauls may call for a restatement.

While you’re alive, your revocable trust uses your Social Security number; income is reported on your personal return—no separate trust tax return required. After death (or when the trust becomes irrevocable), the trust may need its own tax ID and file fiduciary income tax returns. Your successor trustee will coordinate with your CPA.

Yes. You’ll want a pour-over will to funnel any assets left in your name at death into the trust. Your will is also where you nominate guardians for minor children—something a trust cannot do.

Commonly titled to the trust:

• Real estate (California and out-of-state)
• Bank and brokerage accounts
• Non-qualified investment accounts, CDs
• Business interests (LLC/Corp shares per operating documents)
• Valuable personal property (often by assignment)

Often not retitled (but coordinated by beneficiary):

• Retirement accounts (IRA/401(k))—consider naming individuals or a properly drafted “see-through” trust as beneficiary
• Life insurance—often names the trust as beneficiary if you want controlled distributions or creditor protection for heirs

Bottom line: Funding is a process, not a one-time event. Title correctly, review periodically, and coordinate all beneficiary designations with your overall plan.

Choose someone who is:

• Organized and financially responsible
• Calm under pressure and communicative
• Willing to work with professionals (CPA, attorney, advisor)

You can name a trusted individual, co-trustees (helpful for checks and balances), or a professional fiduciary/trust company if neutrality or continuity is important. Always name at least one alternate.

Your successor trustee can act immediately—pay bills, manage investments, handle real estate, support dependents—according to your trust terms. No conservatorship, no court delays, no public filings. This is one of the most overlooked (and most valuable) benefits of a living trust.

Yes—if it’s properly funded. Probate in California can run 9–18 months (or longer), and statutory fees are based on the gross value of your estate. When the assets are already titled to your trust, your successor trustee transfers them per your instructions without court supervision. Any asset left outside the trust may still trigger probate unless it qualifies for another non-probate transfer.

Pro tip: Pair your trust with a pour-over will to catch stragglers and a funding checklist so new accounts and properties are titled correctly from the start.

• Timing: A will speaks only at death (and requires probate). A trust operates the moment you fund it and continues without court involvement.
• Probate: Assets titled in the trust avoid California probate—saving time, statutory fees, and public scrutiny.
• Incapacity: A will does nothing if you’re alive but unable to manage finances. A trust names who steps in and how.

Think of your trust as a rulebook for your assets that works in life, in incapacity, and after death.

A revocable living trust is a legal arrangement you create during your lifetime. You transfer (or “title”) assets into the trust, serve as your own trustee while you’re able, and keep full control: buy, sell, refinance, invest—exactly as you do now. If you become incapacitated or when you pass away, your named successor trustee steps in and follows your written instructions—privately, without probate.

Key idea: “Revocable” means you can change or cancel it any time while you have capacity.

Your service created a legacy already. A strong estate plan makes sure that legacy protects the people you love

Your executor (for a will) and your trustee (for a trust) stand at the center of your plan. They need to understand your values, handle money responsibly, follow the law, and communicate clearly with your family.

Veterans often pick a spouse, an adult child, or a trusted friend. In more complex situations, many families hire a professional fiduciary or corporate trustee. The right choice depends on family dynamics, complexity of assets, and the level of skill and neutrality your situation requires.

Many service members and veterans hold life insurance through SGLI or VGLI, along with other military and employer-based policies. Those policies pay out based on beneficiary designations—not on what your will says.

You can coordinate those designations with a revocable living trust to protect:

• Minor children
• Beneficiaries with special needs
• Beneficiaries who need help managing money

When the trust receives the proceeds, your chosen trustee invests, safeguards, and distributes the funds according to your instructions.

Long-term care costs can erase a lifetime of savings. Veterans may qualify for a combination of:

• VA long-term care programs
• Aid and Attendance
• Medi-Cal

Each program uses different financial rules and look-back periods.

When you plan early, you create options. You can protect a spouse at home, reserve assets for children, and reduce the risk of penalties or gaps in coverage. In some cases, carefully designed irrevocable trusts and other tools help preserve assets while you follow VA and Medi-Cal guidelines.

California treats most assets acquired during marriage as community property, owned equally by both spouses, even if only one name shows on the title.

When you design an estate plan, you need to respect that structure. Veterans often own separate property as well: assets from before marriage, inheritances, or gifts. Clear documentation and careful drafting ensure that your spouse, children, and other heirs receive the shares you intend—and that no one fights over what “belongs” to whom.

Survivor benefits for eligible spouses and dependents can include:

• Dependency and Indemnity Compensation (DIC)
• Burial and memorial benefits
• Education assistance
• Access to certain health care programs

Each benefit follows its own rules tied to service-connected disability, cause of death, and length of service.

A strong estate plan gathers crucial information—DD-214, service history, disability ratings, insurance and retirement beneficiary designations—and puts it in one place. Your family then has everything they need to apply for survivor benefits quickly and confidently.

Aid and Attendance adds extra monthly income to a VA pension for qualifying veterans or surviving spouses who need help with daily activities or who live in assisted living or nursing homes.

Eligibility depends on:

• Service history
• Medical need and level of care
• Income and assets

The benefit can add hundreds or even thousands of dollars per month—money that can cover care, reduce pressure on family caregivers, and preserve savings. Estate planning helps you structure assets so you support eligibility without putting your spouse or family at risk.

Most VA disability compensation benefits do not depend on asset levels, so you can usually plan your estate without hurting those payments.

Needs-based benefits, such as VA Aid and Attendance, follow stricter income and asset rules. When you work with a knowledgeable estate planning attorney, you can often position assets and income in a way that supports eligibility while still protecting your family’s long-term security.

A revocable living trust keeps your estate out of California’s probate court and keeps your financial life out of the public record. Probate in California often drags on and drains money, even when the estate looks modest on paper.

When you place assets in a trust, your successor trustee can follow the instructions you leave and transfer property directly to your chosen beneficiaries. No judge, no long wait, and far less stress.

Trusts also streamline incapacity planning. If illness or injury limits your ability to manage finances, your successor trustee can step in quickly and keep the lights on, the mortgage paid, and your benefits protected.

Every veteran needs a solid core set of documents:

• Will – You name your beneficiaries and appoint an executor to carry out your wishes.
• Durable Financial Power of Attorney – You authorize a trusted person to step in and handle money, bills, and legal matters if you cannot.
• Health Care Directive – You spell out treatment preferences and name a medical decision-maker who can speak for you with confidence.
• HIPAA Release – You give doctors permission to share medical information with the people who need it.

Many veterans also choose a revocable living trust. A trust adds privacy, more control, and a smoother transition for your family.

Estate planning lets you stay in charge of your life and your legacy. You decide who manages your money, who receives your property, and how your loved ones access support after you pass away.

Veterans often qualify for powerful benefits, but those benefits come with strict rules. When you combine smart legal planning with VA and Medi-Cal rules, you avoid benefit delays, disqualification, and costly mistakes.

A thoughtful plan also shields your spouse and dependents. They gain a clear roadmap to survivor programs instead of scrambling through court, red tape, and guesswork while grieving.

You never get a second chance to protect your child, sibling, or loved one with a disability. The choices you make today can either safeguard a lifetime of essential benefits—or unravel them.

An ABLE account gives individuals with qualifying disabilities a powerful, tax-advantaged way to save. Federal law caps yearly contributions and overall account balances, but within those limits an ABLE account can offer tremendous flexibility.

Your loved one can use ABLE funds to cover a wide range of qualified disability expenses, including housing, health care, transportation, education, and basic living costs. An ABLE account also gives the beneficiary more day-to-day control, which can feel empowering for adults who want greater financial independence.

A special needs trust and an ABLE account often work best together. The trust can hold larger, long-term assets, while the ABLE account can handle everyday spending. In some plans, the trustee regularly transfers modest amounts from the trust into the ABLE account so the beneficiary can manage routine expenses without crossing any benefit limits.

The answer depends on the type of special needs trust you set up.

In a first-party special needs trust, the beneficiary’s own assets fund the trust—for example, money from a lawsuit settlement, back benefits, or an inheritance that went directly to them. After the beneficiary passes away, federal and state law require repayment to Medi-Cal for benefits provided during that person’s lifetime.

In a third-party special needs trust, parents, grandparents, or other loved ones contribute their own assets. The beneficiary never owns those funds outright. Because of that, no Medi-Cal payback requirement applies. You, as the trust creator, decide who receives any remaining funds—often brothers, sisters, or other heirs you choose.

Families who plan early usually favor a third-party trust, because it protects the beneficiary and keeps you in control of the legacy you leave behind.

The trustee’s mission: protect benefits while elevating the beneficiary’s daily life.

The trustee uses trust funds to pay for therapies, medical and adaptive equipment, education and job training, recreation, transportation, and other expenses that enrich life without jeopardizing benefits.

The trustee must pay close attention to housing and food-related costs, which can reduce SSI under in-kind support rules. A thoughtful trustee coordinates with your attorney, tax advisor, and benefits specialists to follow the rules, document every decision, and still say “yes” as often as possible to opportunities that bring joy, dignity, and independence.

Your choice of trustee can make or break the plan.

Some families select a trusted relative who understands the beneficiary’s daily routines, medical needs, and personality. Other families prefer a professional fiduciary or a financial institution with deep experience in special needs planning, benefit rules, and recordkeeping.

Many families blend the best of both worlds: a co-trustee arrangement that pairs a family member’s insight with a professional’s technical expertise.

Whoever you choose needs strong organization skills, rock-solid integrity, and the humility to seek legal and financial guidance when questions arise. Because this role often lasts for decades, you want someone with long-term stability and a genuine commitment to your loved one’s future.

Most families choose a supplemental needs trust (also called a special needs trust) when they want to protect both their loved one and their benefits.

Instead of handing assets directly to your loved one, you place them in the trust. A trustee then manages those assets and uses them only for the beneficiary’s needs. Because the trust—not the beneficiary—owns the funds, your loved one can usually keep receiving SSI, Medi-Cal, and other public benefits while still enjoying extra support that dramatically improves quality of life.

Yes. When you leave money directly to a loved one with a disability, that gift can collide with crucial safety-net programs like SSI or Medi-Cal.

Programs such as SSI and Medi-Cal limit eligibility to people with very little income and few resources. Even a relatively modest inheritance can push your loved one over the threshold and trigger a reduction or suspension of benefits.

When that happens, families often face months of phone calls, forms, appeals, and anxiety while they fight to restore coverage. The right plan helps you avoid that crisis altogether.

An attorney can:

• Guide executors and trustees through their duties
• Assist with probate filings and court requirements
• Provide advice on fiduciary responsibilities
• Help families resolve disputes
• Ensure compliance with California estate laws

You can simplify administration by:

• Creating a revocable living trust to avoid probate
• Keeping documents organized and accessible
• Naming capable administrators and successors
• Preparing a letter of last instructions
• Consulting with an estate planning attorney to ensure compliance with California law

If the named executor or trustee is unable or unwilling to serve, a successor you designate in advance can step in. Wills and trusts should always name alternates to avoid delays. If no successor is named, the court may appoint one.

How long does estate administration take?

The timeline varies. Probate in California takes 9–18 months, depending on complexity. Trust administration can be faster but still requires careful management. Executors and trustees must balance speed with accuracy to ensure compliance with the law.

Probate is the court process of validating a will and overseeing distribution of assets. In California, probate can be lengthy and costly.

Assets held in a trust avoid probate, allowing for faster and more private administration. Planning ahead with trusts can simplify the process for your family.

What are the fiduciary duties of executors and trustees?

Executors and trustees must act with loyalty, prudence, and impartiality. This means:

• Avoiding conflicts of interest
• Managing assets responsibly
• Treating beneficiaries fairly
• Following the terms of the will or trust

Failure to meet fiduciary duties can result in legal liability.

A letter of last instructions is a non-legal document that provides guidance to your executor or trustee. It can include:

• Contact information for family, advisors, and institutions
• Location of important documents and accounts
• Funeral and burial preferences
• Passwords or digital account access instructions

While not legally binding, this letter helps administrators carry out your wishes more efficiently.

Yes. You can appoint co-executors or co-trustees. This can balance responsibilities but may also create delays if they disagree. If you choose multiple administrators, make sure they can work together effectively.

Selecting an estate administrator is one of the most important decisions in estate planning. Consider:

• Trustworthiness: The person must act honestly and responsibly.
• Financial competence: They should understand money management.
• Availability: Administration can take months or years, so the person must have time to serve.
• Neutrality: Choosing someone impartial can reduce family conflict.

You may also appoint a professional fiduciary or corporate trustee if family members are not suitable.

A trustee manages assets held in a trust. Unlike executors, trustees typically act without court oversight. Duties include:

• Managing trust property responsibly
• Following the terms of the trust document
• Distributing assets to beneficiaries as directed
• Keeping records and providing accountings

Trustees have a fiduciary duty, meaning they must act in the best interests of the beneficiaries.

An executor is named in a will to carry out the decedent’s instructions. Duties include:

• Filing the will with the probate court
• Collecting and safeguarding assets
• Paying debts, expenses, and taxes
• Distributing property to beneficiaries according to the will

Executors act under court supervision and must follow strict legal requirements.

Estate administration refers to the legal and financial steps taken to settle a person’s estate after death. It includes gathering assets, paying debts and taxes, and distributing property to beneficiaries.
Depending on the estate plan, administration may involve probate, trust management, or both.

Family-owned businesses combine legal, financial, and emotional factors. Estate planning attorneys coordinate these elements into a single strategy.

Professional guidance helps turn values and goals into enforceable plans. That coordination supports both business success and family continuity.

Family businesses evolve. Growth, leadership changes, and new family dynamics all affect earlier plans.

Regular reviews keep documents aligned with reality. Planning under Inglewood and broader California law also requires attention to legal updates. Periodic review supports long-term stability.

Incapacity can disrupt operations immediately. Without authority documents, banks and vendors may refuse to act.

Powers of attorney and trust-based ownership allow continuity. Someone you choose can manage affairs without court involvement. That preparation protects employees and customers during uncertainty.

Disagreements about the future are common. Some relatives may see opportunity in sale, while others see loss.

Planning allows you to set decision rules ahead of time. Buy-sell provisions, valuation methods, and voting thresholds provide a path forward even when opinions differ.

Unclear transitions often create sides. Disagreements about control or value can fracture relationships quickly.

Estate planning anticipates these pressure points. By addressing ownership, management, and exit options in advance, you reduce the likelihood that conflict escalates. Structure replaces speculation.

Assumed roles invite conflict. Family members may believe authority exists where it does not. Employees may receive mixed signals.

Defining roles in legal documents removes ambiguity. Clear authority structures support consistent decision making and reduce internal friction.

Verbal assurances often feel sufficient in close families. Over time, memories fade and expectations shift.

Without written documentation, those promises have no legal force. Estate planning replaces assumptions with enforceable instructions. That shift protects both the business and family harmony.

Respect does not always translate into readiness. Younger relatives may appreciate what the business represents while lacking interest in daily operations.

Estate planning prepares for that reality. You can authorize professional management, plan for eventual sale, or define transition milestones. These options keep the business from stalling due to hesitation or burnout.

Some heirs want financial benefit without management duties. That expectation can strain those who carry operational risk.

Planning allows you to separate ownership benefits from control. Trust structures and entity agreements can provide income while keeping decision making with qualified managers. This balance reduces resentment on both sides.

Pride can motivate growth, but it can also block hard decisions. You may want to preserve the business name or mission even when leadership needs change.

Estate planning creates a framework for objective decision making. Written standards for leadership, succession, and dispute resolution help separate emotion from operation. That clarity supports both legacy and sustainability.

Fairness and equality are not the same. Equal ownership can create deadlock when owners have different skill levels or commitment.

Planning gives you tools to define fairness on your terms. Voting rights, management authority, and distribution structures can reflect responsibility rather than headcount. That approach protects operations while respecting family relationships.

In many families, one or two people carried the workload while others pursued different paths. That imbalance matters when planning for the future.

Estate planning lets you recognize contribution without dismissing family ties. You can allocate control to those who earned it while still providing economic benefit to others. This structure supports continuity without rewriting history.

Family-owned businesses often carry emotional weight that goes beyond revenue. You may see the business as a symbol of perseverance, independence, or community presence. Other relatives may view it only as an asset.

Estate planning allows you to account for those differences without judgment. Clear ownership and control provisions keep meaning from turning into misunderstanding. By documenting intent, you reduce the risk that conflicting perspectives undermine the business.

The goal is clarity and continuity. Financial planning assistance helps ensure that your finances are managed according to your wishes, both during your lifetime and after death.

When legal and financial structures work together, your plan provides stability for you and guidance for those who may need to act on your behalf.

Reviews are appropriate after major life events such as marriage, divorce, the birth of a child, a significant asset change, or a health diagnosis. Even without major changes, periodic reviews confirm that your plan still reflects your current situation and priorities.

An estate planning attorney gathers information about your assets, family structure, and goals. They then apply the law to that information, identifying how assets should be owned, who should have authority, and how transfers should occur.

The attorney coordinates documents so the plan functions smoothly as circumstances change.

No. Financial planning assistance addresses structure and authority, not just wealth. Individuals with modest estates still benefit from coordinated planning, especially when addressing incapacity, blended families, or long-term care concerns.

The size of the estate is less important than how it is organized.

Financial planning is not static. Asset values change, accounts are opened and closed, and priorities evolve. Periodic review allows your legal plan to remain aligned with your current financial situation. Updates are often targeted and focused, rather than a complete redesign.

Trusts are legal tools used to manage assets under defined terms. They can address incapacity, provide structure for asset distribution, and establish controls that are not available through a will alone.

Financial planning assistance evaluates whether a trust fits your goals and how assets should be titled to support it.

Clear financial planning reduces ambiguity. When authority, access, and distribution instructions are documented, family members are less likely to disagree about what should happen.

While no plan can eliminate all conflict, clarity removes guesswork and minimizes misunderstandings during stressful times.

Incapacity planning is a core component of financial planning assistance. Powers of attorney and trust provisions determine who can manage your finances if you cannot.

Financial planning ensures that authority is clear, workable, and matched to the complexity of your assets, reducing the need for court involvement.

Yes, but in a legal sense. Estate planning attorneys consider how income taxes, capital gains, and transfer taxes interact with your plan. The focus is on avoiding unintended tax consequences and preserving flexibility, not on predicting markets or selecting investments.

Proper planning looks at the long-term tax impact of ownership and transfer decisions.

Beneficiary designations control many financial assets and often operate outside a will or trust. If those designations are outdated or inconsistent with your broader plan, assets may pass in unintended ways.

Financial planning assistance includes reviewing beneficiary designations to confirm they reflect your current intentions and align with your estate plan.

Estate planning typically involves reviewing bank accounts, investment accounts, retirement plans, life insurance policies, real estate, business interests, and valuable personal property.

Each asset type follows different legal rules. Understanding how those rules apply allows your plan to function as a coordinated system.

Estate plans operate on the assets you own. If financial accounts, real estate, or business interests are not structured correctly, even well-drafted documents can fail to work as intended.

Financial planning ensures that ownership and beneficiary designations support your estate plan rather than override it.

Traditional financial advisors focus on growing and managing assets. Legal financial planning focuses on how those assets are owned, accessed, and transferred.

An estate planning attorney looks at titling, beneficiary designations, fiduciary authority, tax exposure, and incapacity planning. These are legal issues that determine what happens to your finances when life events occur.

Financial planning assistance, in the estate planning setting, focuses on how your assets are structured, managed, and transferred under the law. It is not investment advice. Instead, it addresses ownership, control, decision-making authority, and long-term consequences.

The goal is to align your financial picture with your legal plan so your intentions can be carried out effectively.

A third party special needs trust can direct remaining assets to other beneficiaries, while a first party trust must reimburse Medi Cal before distributing anything else.
Your estate plan should specify how remaining assets are handled so the trust ends cleanly and according to your wishes.

Special needs planning must be integrated with your will, your trust, your powers of attorney, and your beneficiary designations. Each document plays a role.
Your estate plan should direct assets into the special needs trust, give your chosen decision makers the authority they need, and avoid any structure that places assets in the beneficiary’s name.
Coordination prevents gaps that could cause benefit loss or administrative problems.

Beneficiary designations override your will and trust. If your loved one is named directly, the inheritance will go to them outright and may disrupt benefits.
Updating your designations is essential. A third party special needs trust can be named instead, allowing the inheritance to pass safely without affecting eligibility.

Medi Cal and SSI have strict asset and income limits. A properly drafted special needs trust keeps trust assets out of the beneficiary’s countable resources.
The trustee must follow distribution rules carefully so that payments do not count as income. When the trust is administered correctly, the beneficiary can keep essential benefits while receiving supplemental support from the trust.

A special needs trust can pay for a wide range of expenses that improve the beneficiary’s quality of life. These may include therapies, medical equipment, education, transportation, personal care services, travel, recreation, and certain housing related costs.
The trust cannot provide cash directly to the beneficiary, and it must avoid payments that reduce SSI benefits. A trustee who understands these rules can prevent accidental benefit disruptions.

The trustee must be someone who can manage money, follow legal requirements, and make careful decisions. Some people choose a relative who understands the beneficiary’s needs.
Others prefer a professional trustee who can handle the administrative responsibilities. The trustee must follow the trust’s instructions and must avoid giving the beneficiary cash or direct payments that could jeopardize benefits.

A first party trust holds the beneficiary’s own assets, such as a personal injury settlement or an inheritance received without planning. These trusts must include a payback provision that reimburses Medi Cal upon the beneficiary’s death.
On the other side of the coin, a third party trust holds assets contributed by someone else. These trusts do not require a payback provision and can direct remaining assets to other beneficiaries after the primary beneficiary’s lifetime.

A direct inheritance counts as a resource for SSI and Medi Cal. Even a modest amount can push the beneficiary over the asset limit and cause a loss of benefits.
Reinstating those benefits can take months or longer. A special needs trust avoids that disruption by keeping the inheritance outside the beneficiary’s ownership while still allowing the funds to be used for their benefit.

A special needs trust holds assets for the benefit of a person with a disability while keeping those assets out of the beneficiary’s direct ownership. That separation protects eligibility for needs based programs.
The trustee manages the assets and uses them to supplement, not replace, public benefits. A special needs trust can pay for services, therapies, education, transportation, and other quality of life expenses that government programs do not cover.

Special needs planning creates a legal structure that supports a loved one with a disability without disrupting eligibility for needs based benefits.
The goal is to provide long term financial stability, preserve access to programs like SSI and Medi Cal, and give you a way to direct resources without placing assets in the beneficiary’s name.
A well designed plan coordinates your estate documents, your beneficiary designations, and any support you intend to provide during your lifetime.

Cryptocurrency is treated as property, not currency, by the Internal Revenue Service (IRS) and the California Franchise Tax Board. When your beneficiaries inherit your cryptocurrency upon your passing, they receive a valuable tax benefit known as a “step-up in basis.”

Your heirs’ tax basis in the inherited crypto resets to the fair market value of the coin on the exact date of your death. If you purchased Bitcoin years ago at $10,000, and it is worth $60,000 when you pass away, your heirs can sell it immediately for $60,000 and pay zero capital gains tax.

This saves your family significant money compared to gifting the crypto to them while you are still alive.

The best approach is a two-part system that separates the legal authority from the technical execution.

First, use your trust or will to give your successor trustee the legal right to manage your digital assets. Second, create a secure, off-line memorandum of instructions that outlines your technical inventory.

This inventory should list which exchanges you use, what hardware wallets you own, where those physical devices are hidden, and how to find your seed phrases. You can keep this sensitive guide in a home safe, a bank safe deposit box, or use a secure “dead man’s switch” protocol that releases information to your heirs only after a period of prolonged inactivity.

A revocable living trust is a powerful tool for managing digital assets because it completely avoids the public probate process. To hold cryptocurrency in a trust, your trust agreement must contain specific, detailed provisions granting the trustee the power to manage digital property, interact with blockchain protocols, and handle cryptographic keys.

Once the trust is drafted, you must “fund” it by transferring ownership of your crypto assets to the trust.

If your assets are stored on an exchange like Coinbase or Kraken, you must update your account ownership to the name of your trust.

And if you utilize cold storage hardware wallets, you must draft a formal declaration of trust ownership stating that you hold those specific cryptographic keys on behalf of the trust.

No, you should absolutely never write your private keys, PINs, passwords, or 24-word seed phrases directly into your last will and testament.

When you pass away, your will must be filed with the Los Angeles County Superior Court to begin the probate process. Once filed, a will becomes a matter of public record. Anyone can walk into the courthouse or log onto the court website and view the document.

If your private keys are written in your will, your entire crypto portfolio can be stolen instantly by anyone browsing the public records.

Under the California Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), fiduciaries—such as executors, trustees, and conservators—are granted the legal authority to manage your digital assets under specific conditions.

However, RUFADAA draws a very sharp line between standard digital accounts (like emails or online banking) and assets protected by private cryptography.

The law explicitly states that a fiduciary does not have an automatic right to access the actual content of your electronic communications or your private keys unless you explicitly grant that consent in your will, trust, or power of attorney.

Without explicit wording in your estate planning documents, your family may face a legal brick wall when trying to access your digital wallets.

Cryptocurrency estate planning is the process of setting up a legal and practical framework to ensure your digital wealth can be safely discovered, accessed, and managed by your heirs after you pass away or if you become incapacitated.

Traditional assets like bank accounts leave a paper trail, and a court can order a bank to release funds to an executor. Cryptocurrency does not work this way. If you hold your own private keys or seed phrases and pass away without a plan, those assets are functionally lost forever on the blockchain. No judge, lawyer, or tech company can recover them for your family.

If both parents die and no effective guardian nomination is in place, the court must determine who will care for the children. A parent can nominate a guardian in a will, but the court ultimately makes the appointment under California law.

• The court applies the child’s best interests. A judge—not the deceased parents—makes the final legal determination.
• Disputes are possible. If multiple relatives or other interested adults seek appointment, the family may face a contested guardianship proceeding.
• A child’s inheritance may require separate management. If a minor inherits property outright, the court may appoint a guardian of the estate to manage that property under court supervision. Without a trust or other planning structure, assets held for the child may ultimately become available to the child at age 18.

A spouse or family member does not automatically receive blanket authority to act as your financial agent simply because you become incapacitated. Authority can depend on how property is titled, whether it is community or separate property, whether an account is jointly owned, and whether you have signed a durable power of attorney or created a properly funded trust.
Without adequate planning, banks, title companies, and other institutions may require formal proof of legal authority before allowing someone to manage individually owned assets, sign documents, access accounts, or complete real-estate transactions. If no practical alternative is available, a family member or other interested person may need to ask the court to establish a conservatorship of the estate—a proceeding that can involve court oversight, professional evaluations, accountings, time, and expense.

An Advance Health Care Directive allows you to name the person you want to act for you and to document important treatment preferences. Without one, California law still provides a framework—but it may not put the person you would have chosen in control.

Under Probate Code section 4712, if you lack capacity and there is no already-recognized decision-maker, a health care provider or facility designee may select an appropriate surrogate. That person may be a spouse or domestic partner, adult child, parent, adult sibling, adult grandchild, another adult relative, or a close personal friend. The surrogate must be reasonably available, willing to serve, and familiar with your values and beliefs to the extent known

• Family disagreement. When relatives disagree, treatment decisions can become slower, more stressful, and more difficult to resolve.
• Your preferences may be unclear. Without written instructions, the people making decisions may have to reconstruct your wishes from prior conversations and what they know about your values.
• Court involvement can still become necessary. In some situations—particularly when authority is disputed or broader legal powers are needed—a conservatorship or other court proceeding may be required.

Not necessarily. Whether formal probate is required depends on how property is titled, the type and value of the assets, the date of death, and whether a simplified transfer procedure applies.

For deaths on or after April 1, 2025, California’s general small-estate threshold under Probate Code sections 13100–13101 is $208,850 for qualifying property. California also now provides a separate court procedure for succession to a decedent’s California primary residence with a gross value of up to $750,000 under Probate Code sections 13151–13154. Other exceptions and spouse-specific procedures may also apply.

If the estate does require formal probate, the process can create real burdens for a family:

• Public court process. Many probate petitions, inventories, orders, and other filings become part of the court record.
• Statutory compensation. California Probate Code sections 10800 and 10810 provide percentage-based ordinary compensation for the personal representative and the personal representative’s attorney, calculated from the value of the estate accounted for without deducting mortgages or other encumbrances.
• Time. California Courts states that a formal probate case typically takes about 9 to 18 months and can take longer, particularly when real estate, creditor issues, taxes, family disputes, or other complications are involved.

If you die without a valid will, you are generally considered to have died “intestate” as to assets that pass through your probate estate. California’s intestate succession statutes—not your unwritten wishes—then determine who inherits those probate assets. Assets that pass by beneficiary designation, survivorship rights, or a properly funded trust may follow different rules.
For married people, the result can be especially surprising. Under California Probate Code section 6401, a surviving spouse generally receives the decedent’s one-half interest in community property. But separate property is divided differently. For example, if the decedent leaves a spouse and one child—or descendants of one deceased child—the surviving spouse generally receives one-half of the decedent’s separate property and the child or descendants receive the other half.
That means California law may produce a distribution very different from the one you would have chosen for your spouse, children, partner, other relatives, friends, or charitable causes.

The sad reality is that there are predators who intentionally prey on society’s most vulnerable, including the elderly. Then there are those who commit opportunistic elder abuse. In fact, experts tell us that about 75 percent of the time it is a family who is the perpetrator of elder abuse, particularly when that abuse is financial abuse. Conservative estimates also indicate that more than 40 percent of nursing home residents have reported abuse, and more than 90 percent report that they or another resident of the facility have been neglected. Elder abuse is a crime; however, it can also form the basis of a civil lawsuit against the perpetrator and/or the facility that allowed the abuse to occur. If you suspect that an elderly loved one is the victim of abuse, an elder law attorney can discuss your legal options and help you remove your loved one from the abusive environment.

Neither Medicare nor most basic health insurance plans will cover the costs associated with long-term care. Unless you have the resources to cover the high cost of nursing home care out of pocket and indefinitely, you will likely find yourself turning to Medi-Cal (California’s Medicaid program) for help. To be eligible, however, you must contend with very low “countable resources” limits that can put your retirement nest egg at risk as well as a variety of other complex eligibility guidelines. An elder law attorney can help you incorporate Medi-Cal planning into your overall estate plan to make sure you are eligible for benefits if you need them while still protecting your retirement nest egg.

Date from 2015 indicates that approximately 43.5 million caregivers provided unpaid care to an adult or child that year. Lost income and benefits over a caregiver’s lifetime  is estimated to be, on average, over $300,000. Caregivers face emotional stress, financial hardship, and often legal struggles as a result of the care they provide. Sometimes, help is available if you know where to look and how to qualify. An experienced elder law attorney may be able to help with things such as getting a loved one approved for Medi-Cal benefits, pursuing a claim of elder abuse against a paid caregiver or family member, or analyzing eligibility for additional state and federal benefit programs.

Watching a parent succumb to the natural aging process is not easy. Making the decision to seek guardianship (referred to as conservatorship in California) over a parent is ever more difficult; however, it may become necessary to prevent serious injury and/or victimization by those who prey on the elderly. An elder law attorney can help you pursue conservatorship to ensure that you have the legal authority required by law to properly care for an protect your parent.

Because an elder law attorney focuses more on the client demographics than the area of the law, there are numerous different legal issues an elder law attorney might be able to help you with, such as:

• Denial of SSI, SSDI, or other benefits
• Guardianship – petitioning for, or objecting to
• Housing discrimination
• Long-term care planning
• Estate planning
• Elder abuse
• Health insurance issues
• Preparing advance directives
• Retirement planning
• Nursing home abuse
• Medicaid planning
• Veteran’s benefits

The National Academy of Elder Law Attorneys, or NAELA, was formed in the late 1980s as a way to better serve this growing segment of the population. Five years after the creation of NAELA, the National Elder Law Foundation was formed. The purpose of the non-profit NELF was to help improve the professional skills of attorneys who choose to focus on elder law. Toward that end, NELF then developed a national certification program for attorneys known as the Certified Elder Law Attorney, or CELA, certification program.  Attorneys who wish to gain certification in the area of elder law may do so through a rigorous and selective certification program recognized by the American Bar Association and administered by NELF.

As the elderly population began to grow several decades ago, it started to become clear that the legal issues that impact them needed to be addressed. Consequently, the relatively new area of the law known as “elder law” began to evolve. An elder law lawyer, therefore, is a lawyer who has chosen to focus much, or all, of his/her practice on legal issues that impact the elderly and those who care for them. Unlike other areas of specialty, however, an elder law lawyer does not focus on learning everything there is to know about a single area of the law. Instead, an elder law lawyer is more concerned with how the elderly, and their caregivers, are impacted by various legal issues and problems.

The probate process can be a lengthy, and complex, process that involves a number of legal and financial concepts with which the average person may not be familiar. For this reason alone, most Personal Representatives do retain an experienced estate planning attorney to help them during the probate process.

When the decedent’s Last Will and Testament is submitted to the court for probate, any interested party has the right to challenge the validity of the Will by filing a Will contest. Contrary to popular belief, a Will contest cannot be filed solely on the basis that the contestant is unhappy with his/her inheritance (or lack thereof). If a valid Will contest is filed, the Personal Representative of the estate must defend the Will throughout the ensuing litigation. Basically, the probate process comes to a halt while the contest is litigated. If the contest is successful, the Will is declared invalid and the court looks for another valid Will or the estate is probated as an intestate estate. If the contest is unsuccessful, probate resumes using the Will submitted to the court.

The amount of time it takes to get through the probate process can vary widely in California; however, it will take at least four months because creditors are given that long to file claims against the estate. As a general rule, the more valuable and/or complex the estate assets are, the longer it takes to probate an estate.

Although no two estates follow the exact same path through the probate process, there are some common steps, including:

• Identifying, locating, securing, and valuing estate assets
• Opening probate – usually in the county in which the decedent was a resident at the time of death.
• Notifying creditors that probate is underway.
• Reviewing creditor claims and approving or denying each claim.
• Calculating and paying any state and/or federal tax due.
• Transferring the remaining assets to the intended beneficiaries/heirs of the estate.

If the decedent left behind a Will, the individual named as the Executor in the Will is in charge of administering the estate during the probate process. If the decedent died intestate, any competent adult may volunteer to be the Personal Administrator if the estate. If no one volunteers, the court will appoint someone.

When someone dies without leaving behind a valid Last Will and Testament, the individual is said to have died “intestate.” Dying intestate does not avoid probate. Instead, the assets in an intestate estate are distributed according to the California intestate succession laws, meaning only close relatives will inherit from the estate in most cases.

No. One of the first things that must be done during the probate process is to determine which assets are probate assets and which assets are non-probate assets. Non-probate assets bypass the probate process and may be distributed to the intended beneficiary immediately. Common examples of non-probate assets include:

• Assets held in a trust
• Proceeds of a life insurance policy
• Certain types of jointly help property
• Assets held in an account with a “payable on death (POD)” or a “transfer on death (TOD)” designation
• Certain retirement, pension accounts

Formal probate is not always required. In the State of California, a simplified method of transferring estate assets may be available if the estate assets are valued at less than $150,000 and they do not include real property, such as a house. If you are legally entitled to inherit the property, and the estate qualified, you may be able to use an affidavit to transfer ownership of the assets to you.

When an individual dies, that person leaves behind an estate consisting of all assets owned by the decedent at the time of death. Probate is the legal process that ultimately leads to transferring those assets to the intended beneficiaries and/or heirs of the estate.

Medi-Cal planning utilizes legal tools and strategies within your larger estate plan to protect your assets and ensure that you qualify for Medi-Cal when the times comes that you need help paying for LTC. A common Medi-Cal strategy involves the use of an irrevocable Medicaid trust to shelter your assets. Your estate planning attorney can review your asset portfolio and help you decide the best tools and strategies for your situation.

Fortunately, the Medi-Cal spousal impoverishment rules prevent this from happening. If you need to enter a LTC facility, an allowance is made for your “community spouse” when calculating your eligibility to ensure that he/she is not left without any income and/or resources. Your spouse may be able to keep both resources and part of your monthly income, depending on your spouse’s income.

If your non-exempt assets exceed the program limit, Medi-Cal will impose a waiting period during which time you will be expected to “spend-down” your non-exempt assets. In simple terms, Medi-Cal wants you to sell your assets and use the proceeds to cover your LTC costs during the waiting period. The length of the waiting period is determined by taking the value of your assets that exceeds the limit and dividing by the average monthly cost of LTC in your area. For example, if you have $150,000 in non-exempt assets, the amount over the limit is $148,000. Assuming an average monthly cost for LTC of $9,500, you would divide $148,000/$9,500 = 15.6, resulting in a 16 month waiting period before Medi-Cal would consider you eligible for benefits.

Once upon a time this was possible; however, Medi-Cal closed that loophole by implementing a five-year “look-back” rule. The rule allows Medi-Cal to review an applicant’s finances for the five-year period leading up to application. Any asset transfers made for less than fair market value will be suspect and may be discounted, meaning the value of the asset will be imputed back into the applicant’s assets for purposes of determining eligibility.

When determining your eligibility, only non-exempt assets are considered. Examples of exempt assets include:

• Your primary residence
• Household goods and furnishings
• One vehicle
• Term life insurance
• Burial plot

Along with some basic requirements, such as U.S. citizenship (or legal status) and proof of California residency, you will need to meet Medi-Cal’s income and asset requirements to be eligible for Medi-Cal for the aged benefits. The income limit varies, depending on where you live, your household size, and the specific program within Medi-Cal for which you are applying. The asset limit is where most seniors run into problems if they failed to plan ahead. As a general rule, an applicant cannot have non-exempt, or “countable resources,” valued at more than $2000.

As you age, the likelihood that you will need long-term care (LTC) increases with each passing year. The cost of that care may cause you to turn to Medi-Cal for help. As of 2016, the average cost of a month of LTC in California was over $9,000 and the average length of stay about 2.5 years. Neither Medicare nor most basic health insurance plans will pay for LTC expenses. Unless you can afford to pay out of pocket, that leaves Medi-Cal as your only option because Medi-Cal does pay for LTC.

People often confuse the two or use the names interchangeably despite the fact that they are two very different programs. Both Medi-Cal and Medicare are federally funded healthcare programs; however, the similarities stop there. Medicare is an “entitlement” program, meaning that as long as you worked and paid into the program you are “entitled” to benefits when you turn 65 years old. You will automatically be enrolled in Medicare. Basic Medicare is free; however, there are four parts to Medicare and if you choose to participate in the additional parts you will pay a premium each month. Medi-Cal is a “needs” based program, meaning you must demonstrate a financial “need” for benefits to be eligible. If you qualify, participation in Medi-Cal is free.

Medi-Cal is the name for California’s Medicaid program. Medicaid is a healthcare program that provides coverage for low income individuals and families as well as the aged and disabled.

While you are alive, you can act as a trustee of your trust and you can manage your estate. You will need to designate a successor trustee, such as a trusted and responsible family member or a trusted friend, to administer your trust at your death. Your chosen successor trustee should have business sense, and be responsible with money management, because he or she will be responsible for carrying out the wishes and desires that you’ve set out in your trust agreement.

Another question that I get is, “Can out of state properties be put into my trust?”. The answer is yes. The Collins Law Group is a member of the American Academy of Estate Planning Attorneys, a national organization with attorney members coast to coast. So, if you have out of state properties, we do have a national network of attorneys who can assist us in making sure that your property is properly transferred into your trust.

My clients often ask me, “How long does it take to set up my living trust?”. Here at the Collins Law Group, we have a six-step planning process that generally involves three meetings taking place over the course of thirty days. Of course, we are sensitive to our clients needs, so if there’s a need to expedite the process, we can complete the trust work within the matter of days.

Here at the Collins Law Group, we are often asked, “Do I need an attorney to create my living trust?”. The answer is that it’s highly recommended that you get a licensed and qualified attorney who specializes in estate planning because estate planning is a complex area of the law. We do not recommend that you use any online resources to create your trust documents by yourself because what you want is a qualified and licensed attorney, or a law firm, to stand by your trust documents when you and you family need them the most.

I’ve also been asked, “What is a Conservatorship?”. Conservatorship is a court-supervised process that allows an individual to manage the affairs of an incapacitated person. I’d like to note again that any court-supervised process is a public process, a costly process and will most likely be a lengthy process.

My clients often ask me “Will my property taxes change if I create a trust?” In general in California the answer is no. When it comes to real property, like family homes or vacation homes, there is no change in who owns the property only how the property is owned, so this does not trigger a property tax change.

A trust can help achieve a wide range of estate planning goals, including:

• Avoiding probate
• Incapacity planning
• Asset protection
• Medicaid planning
• Planning for parents with minor children
• Special needs planning
• Pet planning

One of the most important decisions a Settlor must make when creating a trust is who to appoint as the Trustee. In fact, a common mistake people make is appointing a spouse or close friend as Trustee without taking the time to consider if that individual has the experienced and/or skills to successfully serve as the Trustee. Sometimes, appointing a professional Trustee is the better choice. The overall job of a Trustee is to manage and invest trust assets and to oversee the administration of the trust. Generally, the reason behind appointing the wrong person as Trustee is a lack of understanding of the numerous and varied duties and responsibilities of a Trustee, such as:

• Following all trust terms unless they are illegal or unconscionable.
• Communicating with beneficiaries.
• Resolving disputes among beneficiaries.
• Investing trust assets using the “prudent investor” standard.
• Managing trust assets.
• Distributing trust assets.
• Keeping trust records.
• Preparing and filing trust taxes.
• Defending the trust against legal challenges.

Trusts are broadly divided into two categories — living trusts and testamentary trusts with the former activating during the lifetime of the Settlor and the latter typically being activated at the time of the Settlor’s death by a provision in the Settlor’s Will. Living trusts can be further sub-divided into revocable and irrevocable living trusts while a testamentary trust is always revocable because a Will is always revocable. As the names imply, a revocable trust is one that can be modified or revoked by the Settlor at any time and for any reason whereas an irrevocable trust cannot be modified or revoked, once activated, by the Settlor.

A trust is formally created using a written legal document called a “trust agreement.” The trust agreement reflects the terms of the trust as created by the Settlor. Though you probably do not ever think about it, you likely enter into oral trust agreements all the time. For example, if you asked a co-worker to hold a package for you while you are on vacation and give it to your niece when she arrives from out of town, you have created a trust wherein you are the Settlor, your co-worker is the Trustee and your niece is the beneficiary of the trust.

Once upon a time, trusts were predominantly used by wealthy families to control the family fortune and to pass it down through the generations without incurring taxes. Those days are long gone. In fact, trusts are now found in the average estate plan given how user-friendly they are and how versatile they are. While high net worth individuals do still utilize trusts with great frequency, individual’s with a modest estate can also now benefit from incorporating a trust into their estate plan as well.

At its most basic, a trust is a relationship whereby property is held by one party for the benefit of another.  A trust is created by a Settlor, also referred to as a Grantor or Maker, who transfers property to a Trustee. The Trustee holds that property for the trust’s beneficiaries. The beneficiaries may be current and/or future beneficiaries and may be an individual, a charity or organization, or even the family pet.

I’ve also been asked, “What if I create a joint tenancy with my child?”. This is a very problematic option for estate planning. The problem is, you will avoid probate, but if your child has any personal drama, debts, lawsuits, or judgements against them, predators on the court will be able to reach the joint tenancy property. Also, making your child a joint tenant will give your child the ability to take out loans on the property or refinance.

Over half of all seniors in long-term care (LTC) rely on Medicaid (Medi-Cal in California) to cover the high cost of that care. Again, because you are statistically more likely to outlive your spouse, you need to plan ahead for the possibility that you will one day need LTC. Conversely, Medi-Cal planning is also important to ensure that your spouse does not deplete your entire nest egg with his LTC expenses, leaving you with nothing

This is often overlooked by couples. The way in which you title assets can determine whether the asset is required to go through the probate process or is automatically transferred to the surviving spouse upon the death of one spouse. Titling assets as joint owners with rights of survivorship means that the asset will bypass probate upon the death of one owner and that owner’s interest in the asset will transfer directly to the surviving owner (spouse).

The odds are good that you will outlive your spouse. This makes retirement planning even more important for you as a woman. You need to be certain that you will have sufficient assets and income to live comfortably if your spouse is the first to go. Because retirement planning and estate planning are so closely related, and a change in one plan almost always affects the other plan, it is always best to combine your retirement and estate planning into one cohesive plan.

Incapacity planning should be part of your estate plan from the beginning because incapacity can strike at any time and to anybody. Without an incapacity plan in place, you have no way of knowing who will make health care decisions for you, who will take over control of your assets, or who will make personal decisions if you cannot make them yourself.

Ultimately, this is a decision you must make after consulting with your estate planning attorney; however, as a general rule, it is usually better for spouses to create plans that work in harmony with one another but that remain separate. Because there is no way to know, with certainty, what the future will bring, you do not want to create an estate plan that is completely dependent on your spouse’s plan to function properly.

The most well-known benefit of executing a Will is knowing that you will not die intestate. If you fail to execute at least a basic Will prior to your death, the California intestate succession laws will decide how your estate assets are distributed. Typically, this means that only a spouse and/or very close relatives will inherit from your estate. Close friends, charities, and more distant relatives will receive nothing from your estate. In addition, executing a Will allows you the only official opportunity you will have to nominate a Guardian for your minor children in the event one is ever needed.

Statistically, women are more likely to outlive their spouse, ultimately leaving them to be the one to pass down the marital assets to children and other beneficiaries. Women also tend to me the caretakers of the family, making them more likely to be concerned with issues such as guardians for minor children and even plans for again parents. Finally, more and more women are becoming entrepreneurs, adding in another important estate planning consideration into an already lengthy list of estate planning components. For these reasons, and more, estate planning for women is important.

If you are single, only your Conservator would have that authority.

Again, if you haven’t planned, nobody can act for you until the court appoints a Guardian and/or Conservator for you. If bills, such as your son’s tuition, need to be paid in the interim, a friend or family member would have to use their savings or borrow to pay the bill.

A court would have to appoint a Conservator. Nobody but the Conservator would be able to act for you.

Your family or friends must go to your local court and have someone appointed your Conservator. Again, this judge probably does not know you and may not appoint the same person you would choose. In the appointment process, people must testify in open court that you do not have the ability to care for yourself. It can be draining financially and emotionally. Your Conservator would have to report to the court for as long as you are disabled.

Unless you have planned properly, you probably will be kept on life support. In most states, you will be kept on life support unless there is clear evidence you expressed wishes to the contrary; usually this requires something in writing.

Depending on the state, if your family members agree, they can make that decision. However, if family members disagree, you could be back with the local judge getting a Guardian appointed.

A local judge would have to appoint a Guardian who would make that decision. Of course, the judge may not choose the same person you would have chosen.

Yes. If you’re part of the Lesbian, Gay, Bisexual, and Transgender community, a Living Trust offers protection for your estate, as well. It will completely eliminate a living probate, a death probate, and you can minimize or eliminate estate taxes. Further, it allows you to override the laws that may fail to recognize the importance of your relationship.

Yes. The default in state law, called “intestacy,” is designed with married couples in mind. If a married couple dies without any estate plan, the survivor will get a good portion of the assets left behind. However, if you are unmarried, unless you are in a state that legally recognizes domestic partnerships or civil unions and you have registered as such, the survivor would get nothing. Instead, the family of origin of the unmarried partner who died would get anything in that partner’s name, including bank accounts, real estate, etc.

Only your Will is a matter of public record. Your Revocable Living Trust and your Powers of Attorney are not public. Therefore, by using a Revocable Living Trust you can maintain the privacy of your wishes. Prying eyes of co-workers and neighbors will not have access to the details of your estate plan.

Maybe. Federal law allows married couples to give each other an unlimited amount of property without gift tax during life or estate tax at death. Federal law does not recognize non-marriage relationships. However, each person gets to give up to his or her tax exclusion during their lifetime to anyone they want. But, any use during lifetime reduces the amount available for transfers at death. In addition, anyone can make a gift to any other person, called the Annual Gift Tax Exclusion, without gift tax and without reducing his or her estate tax exclusion.

Unless your spouse or partner has adopted your minor children, a court would decide what would be in the child’s best interest. Typically, your family of origin and that of the child’s other biological parent are given preference by the court. However, in your last Will, you can nominate your spouse or partner to be the guardian for your minor child. The court will then give weight to your suggestion while weighing what is in the child’s best interest.

Yes, if you are married or in a registered relationship and in a state which recognizes that relationship. However, if you’re unmarried and either, 1) not in such a registered relationship, or 2) you are in a state which does not recognize that relationship, then default state law allows your partner’s family of origin rather than you to make those decisions. However, if your spouse or partner designates you as agent under their Health Care Power of Attorney, then you would be able to make such decisions.

If you are married or in a state that recognizes civil unions or domestic partnerships and you register as such, proof of such marriage or registration would be sufficient. Otherwise, you would need to have your spouse or partner designate you as agent under their Health Care Power of Attorney. The agent also can limit other visitors.

If you are in a marriage, registered domestic partnership, or civil union, your spouse or partner can make those decisions for you. If you are not in a registered relationship, then state law would recognize your family of origin to make those decisions. However, you can override state law and give your partner the authority to make such decisions by signing a Health Care Power of Attorney. With such a document, when you are unable to make your own medical decisions, your partner can step in and speak for you. Further, this document will designate your partner as your choice to be guardian for you if one needs to be appointed. Without such a designation, your family of origin would have priority for such an appointment.

No, you have to do estate planning in order to allow your spouse or partner to have that authority. Specifically, by designating your spouse or partner as agent under a General Durable (Financial) Power of Attorney, he or she can make decisions on your behalf regarding financial matters.

You will be treated as “legal strangers” for purposes of state and federal laws. As a result, if you do not have an estate plan, your partner would not have the right to inherit from you, have preference to be appointed your guardian, or many other rights you would assume a spouse would have.

There are still many places and people who are reluctant to recognize your marital rights. Additionally, there are many other important reasons to create an estate plan, such as avoiding probate, minimizing taxes and providing creditor and divorce protection for beneficiaries.

No. These various relationships affect state law rights and responsibilities only in the states which recognize them. Only marriage is respected by the federal government. As a result, unmarried same-sex couples will not get federal benefits, such as social security survivorship benefits.

I’m also asked, “How do I fund my trust?”. Well funding a trust occurs when the assets that you own as an individual, are transferred into your trust. For example, at the Collins Law Group, we provide our clients with funding letters which they present, in person, to their financial institutions, to ensure that their bank accounts are properly transferred into trust. When it comes to real estate, we prepare quick-claim deeds for our clients to ensure that their real estate is properly transferred into trust.

I often get asked, “What will happen to my property if I die without a will or a trust?”. Well if you die without a will or a trust, the state determines who will be your ultimate heirs, through a court supervised process called probate. Probate is a public process, it’s a costly process, and worst of all, it can be a lengthy process. It typically takes anywhere between six months to a year, but if you have family drama, it’ll take much longer than that.

I’m often asked, “Can I revoke my trust, or can I make changes to my trust?” And the answer is yes. Making minor changes is generally called an amendment and making multiple, major changes at one time, is called a restatement. And you can always revoke your trust at any time while you are alive.

Social Security will continue to send out benefit checks until they are notified of an individual’s death. The executor/spouse/trustee should contact the local Social Security Administration office and notify them of the death, or if a benefit check is received, send it back with a letter notifying them. This is important. If checks continue to be deposited, the recipient can incur liability later when Social Security learns of the recipient’s death.

If you are a relative of the deceased, this is simple in most states. To transfer the title of vehicles owned by the deceased, simply take the death certificate to the DMV, and perform the transfer, paying whatever fees they require. If not a relative, bringing along the will and or any trust documents indicating your status should be sufficient.

The answer depends upon the language of the trust document. Certain trusts include “pick and choose” language that allows trustees to selectively place assets into the “B” trust.

While having a living trust can significantly reduce costs compared to probate, there is still a considerable amount of work to be done in properly administering even a simple living trust. The services of an attorney are required, and that person or firm should be compensated fairly for their services. It is important to remember that the fees allowed for trust administration are usually much lower than those for probate, and there is generally less work involved, as there is less involvement of the courts and state bureaucracy.

To summarize the process, trust administration can be broken into five basic steps:

1. Inventory assets
2. Determine estate tax
3. Division of trust assets
4. File the Federal and State tax forms
5. Distributions to beneficiaries

Although the trust administration process seems relatively straightforward, there are several reasons it can sometimes be drawn out over several months or even years. The first step, the inventory of assets, must be completed before the trust administration can begin, and this can be difficult to complete depending upon the prior organization and the size and complexity of the decedent’s assets. Next, the 706 estate tax return must be filed within 9 months, or 15 months if an extension is filed. Often, it is prudent to wait until the last minute to file this form. If the spouse of the decedent is in failing health and may pass away before the deadline, then both 706 forms can be used to maximize tax advantages to the estate. The final step, asset distribution, cannot take place until the 706 has been filed, and even then should not take place until the “Closing Letter” is received from the IRS certifying acceptance of the 706 return. This closing letter will take a minimum of 6 to 8 months, and as long as 3 years, to arrive after the 706 is filed. In addition, there may be a state estate or inheritance tax return required, even if a federal return is not required.

Probate begins and ends with the special Probate Court set up in each state to handle estate issues. (Sometimes known as the Orphan’s or Chancery Court in certain states.) All actions taken regarding the estate are accountable to this court, and must be noted and reported regularly. This court is staffed by special judges qualified to oversee estate resolution issues.

Depending on the complexity of the estate and the thoroughness with which accounting has been carried out before death, probate can either be a relatively simple task or a daunting one. Be aware that no matter the situation, probate may be a lengthy process often taking months or possibly years to play out, and one which may take a considerable amount of an executor’s time.

To summarize the process, probate can be broken into six basic steps:

1. Validation of the Will
2. Appoint executor
3. Inventory estate
4. Pay claims against the estate
5. Pay estate taxes
6. Distribute remaining assets

Each of these steps involve legal documentation and validation, and more importantly, proper accounting each step of the way.

Probate is designed to create a “final accounting” upon death. It is the legal process of “proving up” a Will, or verifying that a Will is valid, takes place in one of two instances. First, if a person dies leaving behind a Will, or second, if the deceased has died intestate, that is, has not left behind a Will or estate plan of any type or the Will cannot be found.

The best approach is to meet with an attorney who understands the Legacy Wealth Planning process. This will ensure you address the financial and non-financial assets of your family. The right attorney will help you, first, set up a Family Wealth Trust to preserve your financial legacy. Then, you will be educated about completing the My Legacy workbook, to share in your own words about your life story, family history, memories, and life lessons. And finally, writing a Legacy Planning Letter to distribute your cherished possessions with sentimental value.

YES, but you would be better off choosing an attorney whose practice is focused on estate planning. Members of the American Academy of Estate Planning Attorneys receive continuing legal education on the latest changes in any law affecting estate planning, allowing them to provide you with the highest quality estate planning service anywhere.

No. A Family Wealth Trust can help anyone who wants to protect his or her family from unnecessary probate fees, attorney’s fees, court costs and federal estate taxes. In fact, the Family Wealth Trust offers substantial protection for your family, regardless of your total estate. In addition to savings at death, especially if your estate is over $100,000, the Family Wealth Trust also provides savings and peace of mind during life, because it avoids the expense and emotional nightmare of an incapacity or “living probate” proceeding. Also, a Family Wealth Trust protects spouses in the event of remarriage after one spouse dies and affords greater protection for children.

You can certainly go back to the attorney you worked with before, however, few attorneys offer Legacy Wealth Planning. If you want Legacy Wealth Planning, contact a member of the American Academy of Estate Planning Attorneys.

Very few estate planning attorneys offer Legacy Wealth Planning. A “bare bones” living trust covers probate avoidance and usually ignores important issues to protect you, your spouse (if married) and your children. Bring your existing trust to your free one-hour consultation and we can review it for you.

NO. The Family Wealth Trust has been authorized by the law for centuries. The government really has no interest in making you or your family suffer a probate that will only further clog up the legal system. A Family Wealth Trust avoids probate so that your estate is settled exactly according to your wishes.

YES. In fact, all real estate should be transferred into your Family Wealth Trust. Otherwise, upon your death, depending on how you hold the title, there will be a death probate in every state in which you hold real property. When your real property is owned by your Family Wealth Trust, there is no probate anywhere.

NO. The purpose of creating a Family Wealth Trust is to avoid living probate, death probate, and reduce or even eliminate federal estate taxes. It’s not a vehicle for reducing income taxes. In fact, if you’re the trustee of your Family Wealth Trust, you will file your income tax returns exactly as you filed them before the trust existed. There are no new returns to file and no new liabilities are created.

YES. In fact, most people who create a Family Wealth Trust act as their own trustees. If you are married, you and your spouse can act as co-trustees. And you will have absolute and complete control over all of the assets in your trust. In the event of a mentally disabling condition, your hand-picked successor trustee assumes control over your affairs, not the court’s appointee.

Not only does a Family Wealth Trust provide for the disposition of your property (like a Will), but it also offers the following benefits:

1. Provides for the immediate transfer or trust management and distribution in the future of assets after death;
2. Allows for a smooth transition of management upon incapacity or death;
3. Avoids the expense and hassle of probate proceedings;
4. Minimizes estate taxes and defers payment of estate taxes for married couples;
5. Allows for continued control over assets after death or incapacity;
6. Provides security to you and your loved ones;
7. Protects your children’s inheritance from their own potential divorce;
8. Safeguards your estate for your kids if your surviving spouse remarries;
9. Offers flexibility.

Unfortunately, you would be subject to “living probate,” also known as a conservatorship or guardianship proceeding. If you become mentally disabled before you die, the probate court will appoint someone to take control of your assets and personal affairs. These “court-appointed agents” must file a strict accounting of your finances with the court. The process is often expensive, time-consuming and humiliating.

Most Revocable Living Trusts are primarily concerned with avoiding probate and estate taxes. A Family Wealth Trust offers lifetime benefits, and protects wealth for current and future generations.

A Will is a legal document that describes how your assets should be distributed in the event of death. The actual distribution, however, is controlled by a legal process called probate, which is Latin for “prove the Will.” Upon your death, the Will becomes a public document available for inspection by all comers. And, once your Will enters the probate process, it’s no longer controlled by your family, but by the court and probate attorneys. Probate can be cumbersome, time-consuming, expensive, and emotionally traumatic during a family’s time of grief and vulnerability. Con artists and others with less-than-pure financial motives have been known to use their knowledge about the contents of a will to prey on survivors. A Living Trust avoids probate because your property is owned by the trust, so technically there’s nothing for the probate courts to administer. Whomever you name as your “successor trustee” gains control of your assets and distributes them exactly according to your instructions. There is one other crucial difference: A Will doesn’t take effect until your death, and is therefore no help to you during lifetime planning, an increasingly important consideration since Americans are now living longer. A Family Wealth Trust can help you preserve and increase your estate while you’re alive, and offers protection should you become mentally disabled.

A Family Wealth Trust is the main component of a Legacy Wealth Plan and covers important issues other than avoiding probate.

YES. But your family may not like it. The government’s estate plan is called “Intestate Probate” and guarantees government interference in the disposition of your estate. Documents must be filed and approval must be received from a court to pay your bills, pay your spouse an allowance, and account for your property–and it all takes place in the public’s view. If you fail to plan your estate, you lose the opportunity to protect your family from an impersonal, complex governmental process that can become a nightmare. Then there is the matter of the federal government’s death taxes. There is much you can do in planning your estate that will reduce and even eliminate death taxes, but you don’t suppose the government’s estate plan is designed to save your estate from taxes, do you? While some estate planners favor Wills and others prefer a Family Wealth Trust as the Estate Plan of Choice, all estate planners agree that dying without an estate plan should be avoided at all costs.

Traditional estate planning is focused on financial assets and is concerned with avoiding probate and estate taxes. On the other hand, Legacy Wealth Planning is concerned with financial and non-financial assets of a family and creating a family’s personal legacy plan. Legacy Wealth Planning addresses how to capture and transfer family traditions and values, as well as protecting financial wealth for current and future generations.

Most of us spend a considerable amount of time and energy in our lives accumulating wealth. With this, there comes a time to preserve wealth both for enjoyment and future generations. A solid, effective estate plan ensures that your hard-earned wealth will remain intact as it passes to your beneficiaries, instead of being siphoned off to government processes and bureaucrats.

Traditional estate planning (Wills and Trusts) focuses on the accumulation, the preservation, and the distribution of only your financial assets and worldly possessions. It protects material wealth from probate and minimizes taxes.

Legacy Wealth Planning is the creation of a definitive plan for managing your total wealth while you’re alive, distributing your estate how you choose after your death, and a clear plan to pass on your legacy. Your estate includes all assets of any value that you own. This includes non-financial assets as well as financial assets, including real property, business interests, investments, insurance proceeds, retirement accounts and personal property. Your legacy incorporates important decisions ensuring your family core values, responsible behaviors and community involvement are passed on to future generations. Keep in mind, your legacy also includes personal effects, such as family heirlooms, stories, and accumulated wisdom and life lessons of your family.

Yes. If you’re part of the LGBTQ community, a Living Trust offers protection for your estate, as well. It will completely eliminate a living probate, a death probate, and you can minimize or eliminate estate taxes. Further, it provides privacy from prying eyes.

Yes. The default in state law, called “intestacy,” is designed with married couples in mind. If a married person dies without any estate plan, the survivor will get a good portion of the assets left behind. However, if you’ve not married, or you are in a state that does not recognize domestic partnership or civil union, your survivor would get nothing. Instead, the family of origin of the partner who died would get anything in that partner’s name, including bank accounts, real estate, etc.

Only your Will is a matter of public record. Your Revocable Living Trust and your Powers of Attorney are not public. Therefore, by using a Revocable Living Trust you can maintain the privacy of your wishes. Prying eyes of co-workers and neighbors will not have access to the details of your estate plan.

Maybe. Federal law allows married couples to give each other an unlimited amount of property without gift tax during life or estate tax at death. Federal law does not recognize non-marriage relationships. However, each person gets to give up to his or her tax exclusion during their lifetime to anyone they want. But, any use during lifetime reduces the amount available for transfers at death. In addition, anyone can make a gift to any other person, called the Annual Gift Tax Exclusion, without gift tax and without reducing his or her estate tax exclusion.

Unless your spouse or partner has adopted your minor children, a court would decide what would be in the child’s best interest. Typically, your family of origin and that of the child’s other biological parent are given preference by the court. However, in your last Will, you can nominate your spouse or partner to be the guardian for your minor child. The court will then give weight to your suggestion while weighing what is in the child’s best interest.

Yes, if you are married or in a registered relationship and in a state which recognizes that relationship. However, if you’re either, i) not married or in a registered relationship, or ii) you are in a state which does not recognize that registered relationship, then default state law allows your partner’s family of origin rather than you to make those decisions. However, if your spouse or partner designates you as agent under their Health Care Power of Attorney, then you would be able to make such decisions.

If you are married or in a state that recognizes civil unions or domestic partnerships and you register as such, proof of such registration would be sufficient. Otherwise, you would need to have your spouse or partner designate you as agent under their Health Care Power of Attorney. The agent also can limit other visitors.

If you are married, or in a registered domestic partnership or civil union recognized by your state, your spouse or partner can make those decisions for you. If you are not in a registered relationship, or that relationship is not recognized by your state, then state law would recognize your family of origin to make those decisions. However, you can override state law and give your spouse or partner the authority to make such decisions by signing a Health Care Power of Attorney. With such a document, when you are unable to make your own medical decisions, your spouse or partner can step in and speak for you. Further, this document will designate your spouse or partner as your choice to be guardian for you if one needs to be appointed. Without such a designation, your family of origin may have priority for such an appointment.

No, you have to do estate planning in order to allow your spouse or partner to have that authority. Specifically, by designating your spouse or partner as agent under a General Durable (Financial) Power of Attorney, he or she can make decisions on your behalf regarding financial matters.

There are many important reasons to create an estate plan, such as avoiding probate, minimizing taxes and providing creditor and divorce protection for beneficiaries.

No. These various relationships affect state law rights and responsibilities only in the states which recognize them. Only marriage is respected by the federal government.

I often get asked, “What is a power of attorney?” A power of attorney is a document that authorizes your chosen individual to act on your behalf when you cannot act for yourself. Generally, it’s affective at the time of your incapacity, or at a specific event of your choice. Your power of attorney can be revoked by you at any time, or it is automatically revoked at your death. Most importantly, you should select a power of attorney agent with great care and you must have a tremendous amount of confidence in that individual.

Yes. Portability must be elected on a timely-filed federal estate tax return. This is the case even though a federal estate tax return would not otherwise be required, such as if the estate of the deceased spouse is below the threshold for federal estate taxation.

Portability is where the surviving spouse can use the amount of federal estate tax exclusion that their deceased spouse left unused at their death. Portability has been part of the law since 2011, though it was temporary until 2013.

A state estate tax is a tax levied by a state government upon the estate of a deceased person. It is levied in much the same way as the federal estate tax. A state inheritance tax is a tax levied by a state government that varies depending upon the relationship of the inheritor to the deceased person. Many states have a separate state estate or inheritance tax which kicks in at a lower level than that of the federal government.

The federal estate tax is a tax levied by the federal government upon the estate of a deceased person. The federal government gives certain exclusions and deductions and then taxes everything above a set level.

YES, but you would be better off choosing an attorney whose practice is focused on estate planning. Members of the American Academy of Estate Planning Attorneys receive continuing legal education on the latest changes in laws affecting estate planning, allowing them to stay on top of the latest laws and techniques to help you meet your needs.

I’m often asked, “Is a revocable living trust only for the rich?”. The answer is no. Revocable living trusts are for anyone who wants to protect his or her family from probate court, probate fees, and estate taxes. If you own a home, or several pieces of property, you absolutely need a trust. More importantly, a trust protects your assets from Medi-Cal recovery. It also protects your children and your other beneficiaries from creditors and possibly divorced judgements.

NO. The Living Trust has been authorized by the law for centuries. The government really has no interest in making you or your family suffer a probate that will only further clog up the legal system. A Living Trust avoids probate so that your estate is settled exactly according to your wishes.

YES. In fact, all real estate should be transferred into your Living Trust. Otherwise, upon your death, depending on how you hold the title, there will be a death probate in every state in which you hold real property. When your real property is owned by your Living Trust, there is no probate anywhere.

NO. The purpose of creating a Living Trust is to avoid living probate, death probate, and reduce or even eliminate state and federal estate taxes. It’s not a vehicle for reducing income taxes. In fact, if you’re the trustee of your Living Trust, you will file your income tax returns exactly as you filed them before the trust existed. There are no new returns to file and no new liabilities are created.

YES. In fact, people who create most Living Trusts act as their own trustees. If you are married, you and your spouse can act as co-trustees. And you will have absolute and complete control over all of the assets in your Trust. In the event of a mentally disabling condition, your hand-picked successor trustee, not the court’s appointee, assumes control over your affairs.

Unfortunately, you would be subject to “living probate,” also known as a conservatorship or guardianship proceeding. If you become mentally disabled before you die, the probate court will appoint someone to take control of your assets and personal affairs. These “court-appointed agents” must file a strict accounting of your finances with the court. The process is often expensive, time-consuming and humiliating.

A Will is a legal document that describes how your assets should be distributed in the event of death. The actual distribution, however, is controlled by a legal process called probate, which is Latin for “prove the Will.” Upon your death, the Will becomes a public document available for inspection by all comers. And, once your Will enters the probate process, it’s no longer controlled by your family, but by the court and probate attorneys. Probate can be cumbersome, time-consuming, expensive, and emotionally traumatic during a family’s time of grief and vulnerability. Con artists and others with less-than-pure financial motives have been known to use their knowledge about the contents of a Will to prey on survivors. A Living Trust avoids probate because your property is owned by the Trust, so technically there’s nothing for the probate courts to administer. Whomever you name as your “successor trustee” gains control of your assets and distributes them exactly according to your instructions. There is one other crucial difference: A Will doesn’t take effect until your death, and is therefore no help to you during lifetime planning, an increasingly important consideration since Americans are now living longer. A Living Trust can help you preserve and increase your estate while you’re alive, and offers protection should you become mentally disabled.

YES. But your family may not like it. The government’s estate plan is called “Intestate Probate” and guarantees government interference in the disposition of your estate. Documents must be filed and approval must be received from a court to pay your bills, pay your spouse an allowance, and account for your property–and it all takes place in the public’s view. If you fail to plan your estate, you lose the opportunity to protect your family from an impersonal, complex, governmental process that can become a nightmare. Then there is the matter of the state and federal government’s death taxes. There is much you can do in planning your estate that will reduce and even eliminate death taxes, but you don’t suppose the government’s estate plan is designed to save your estate from taxes, do you? While some estate planners favor Wills and others prefer a Living Trust as the estate plan of choice, all estate planners agree that dying without an estate plan should be avoided at all costs.

Most of us spend a considerable amount of time and energy in our lives accumulating wealth. With this, there comes a time to preserve wealth both for enjoyment and future generations. A solid, effective estate plan ensures that your hard-earned wealth will remain intact as it passes to your beneficiaries, instead of being siphoned off to government processes and bureaucrats.

Watching a parent’s mental and/or physical deterioration is heart-wrenching. If you have a parent who has become incapacitated, as a result of Alzheimer’s or simply the natural aging process, seeking conservatorship may be your only option if you wish to keep your parent and his/her assets safe. A conservatorship is a relationship established by a court of law between the person who needs help, referred to as the “ward,” and the person or entity named by the court to help the ward, known as the “conservator.” Considered the option of last resort, court’s don’t like to order a conservatorship unless it is absolutely necessary because it is the most restrictive option.  To prevent putting your kids in the position where they have to consider petitioning for conservatorship over you when you get older, you should incorporate an incapacity planning component into your estate plan now.

One of the most commonly used incapacity planning tools is a revocable living trust. When used to plan for the possibility of incapacity it works by allowing you to appoint yourself as the Trustee of the trust and appoint someone of your choosing as the successor Trustee. Your estate assets are then transferred into the trust. Because you are the Trustee, you continue to control those assets just as before; however, if you become incapacitated the successor Trustee (chosen by you) takes over as Trustee, thereby shifting control of your assets to the person of your choice without the need for court intervention. Moreover, when you recover you can resume your position as Trustee as if nothing happened. Finally, because the trust is revocable, you can move assets in and out of the trust with ease and even replace the successor Trustee if you wish to do so at any time.

An advance directive is a legal document that allows you to plan ahead and make your own end-of life wishes known in the event that you are unable to communicate those wishes at some later time and/or appoint someone to make decisions for you.  State law dictates what types of advance directives are recognized in the state. California recognizes two types of advanced directives, including:

• Power of Attorney for Health Care which allows you to appoint someone to make health care decisions for you if your primary doctor determines that you lack the ability to understand the nature and consequences of your health care decisions or the ability to make and communicate your health care decisions.
• Individual Instructions which is California’s version of a Living Will. In this you can state your wishes with regard to health care in the event you can no longer speak for yourself.

A Power of Attorney is a legal agreement that allows you (the “Principal”) to grant another person (your “Agent”) the legal authority to act in your place in legal matters. That authority can be general, allowing your Agent almost unfettered power to act on your behalf, or limited, only granting your Agent the authority to act on your behalf in specific situations or for a designated period of time. While a Power of Attorney can be a helpful incapacity planning tool, it has some drawbacks, including the risk that third parties won’t accept your Agent’s authority. It also has some limitations because even a general POA won’t usually cover all situations. Most states, for example, require you to execute a specific type of document to give someone the legal authority to make healthcare decisions for you.

By incorporating an incapacity plan into your comprehensive estate plan you are able to use legal strategies and tools that collectively determine who will control your assets and make important decisions for you in the event you are ever incapacitated. It allows you to make crucial decisions now instead of a judge making them for you later or deciding who will make them for you.

The same problem could occur when it comes to control over your assets during a period of incapacity. In the absence of a plan that gives someone the legal right to control your assets, a court will likely be forced to appoint someone. That person may – or may not – be someone you would want taking over control of your assets.

This common misconception is precisely why many people fail to plan for incapacity. The reality is that even if you are married there is no guarantee that it will be your spouse making serious, even life or death, healthcare decisions for you if you are unable to make them because of incapacity. All too often more than one family member believes that he/she should be the one making those decisions and the right to make them ends up in a court battle – a battle that could result in a family feud that leaves lasting scars.

The short answer is “yes.” In fact, if you are relatively young and healthy you probably need to be more worried about a period of incapacity than you do death. Up to about age 40 you are three times more likely to become incapacitated than you are to die. One in four of today’s 20-year-olds can expect to be out of work for at least a year because of a disabling condition before they reach retirement age. Because you undoubtedly care what happens to you and your assets if incapacity does strike, it is imperative that you plan for that possibility.

The best way to protect your pet and ensure that he/she is provided for in your absence is through the creation of a pet trust. A pet trust is a specialized type of revocable living trust. Like any trust, you will appoint someone as the Trustee of the trust and you will fund the trust with sufficient assets to care for your pet in your absence. The Trustee of your trust is legally obligated to use the utmost care when managing the trust assets and to follow the trust terms just as you wrote them. Those terms can be used to dictate how you wish your pet to be care for in as much, or as little, detail as you wish. A pet trust provides the legal oversight you need to ensure that the funds you leave behind will be used exclusively for your pet and that your pet’s care will be continued in the manner to which your pet is accustomed. Finally, a pet trust can also address a situation wherein you are incapacitated. The Trustee can take over the care of your pet until you recover, or forever if your incapacity eventually leads to your death.

Gifting your pet to a designated caregiver in your Will does resolve the issue of the legal transfer of ownership; however, it does not solve all of the issues found in a verbal agreement. It does not legally obligate your caregiver to take over the care and maintenance of your pet nor does it provide a satisfactory funding method. You can also gift funds that are intended to be used to care for your pet; however, once gifted in a Will, the funds become the property of the beneficiary to do with as he/she pleases which provides no guarantees that your pet will be cared for as you wished. In addition, gifting a pet in a Will does not address the possibility of your incapacity because the terms of a Will only apply in the event of the Testator’s death, not incapacity.

You may not think of your pet as property; however, the law considers an animal to be property. Therefore, ownership of that “property” needs to be legally transferred to a new owner after your death. In the event of your incapacity, someone needs the legal authority to take control of that “property” during your incapacity. In addition, by making it clear who you wish to be your pet’s new “owner” you can help prevent disputes that could arise if more than one friend or family member wants to take over your pet’s care.

People frequently make the mistake of relying on nothing more than a verbal agreement with a family member or friend to care for their pet in the event of their death or disability. There are numerous problems with this option. First, your intended caregiver could be unable or unwilling to fulfill the agreement when the time comes and there is no legal way to enforce the agreement. Second, although you may not view your pet as your property, the law does, and a verbal agreement does not legally transfer ownership. Finally, a verbal agreement does not provide a funding method for the continued care and maintenance of your pet.

Unfortunately, over half a million dogs and cats end up in shelters each year in the U.S. as a result of the death or incapacity of their owner. When a pet owner dies or becomes incapacitated, a beloved family pet can easily be overlooked, or be viewed as a burden, if plans were not made ahead of time to care for the animal in the event something happened to his/her human “owner.” Your loved ones may be so focused on their worry or grief over your death or health problems that your pet simply gets lost. Even if they do remember your pet, they may be unwilling to take on the practical and financial responsibilities associated with caring for your pet. Including a pet planning component in your estate plan is the only way to ensure that this doesn’t happen to your pet.

Despite the fact that they feel their pet is part of the family, most people do not think to include Fluffy or Fido in their estate plan either because they are not aware it is possible, don’t think it’s necessary, or are unsure how to do so. If you consider your pet to be part of the family, why wouldn’t you include him/her in your estate plan? Including your family pet in your estate plan allows you the peace of mind that comes with knowing your pet will be well cared for if you are unable to provide that care one day.

One of the most common mistakes people make is to under-estimate, or overlook entirely, the potential impact long-term care costs will have on their finances. With an average annual cost of over $100,000 for 2020, and an average length of stay of three years, a LTC bill can quickly deplete a retirement nest egg given the fact that Medicare will not pay for LTC. Medicaid will cover LTC costs, but you must first qualify, a process that could put your assets at risk if you failed to plan ahead.

When a participant in a retirement plan dies, benefits the participant would have been entitled to are usually paid to the participant’s designated beneficiary in a form provided by the terms of the plan (lump-sum distribution or an annuity). Many retirement plans require the account owner to name a spouse as the beneficiary unless he/she signs a form allowing the owner to name someone else as the beneficiary. The Employee Retirement Income Security Act (ERISA) protects surviving spouses of deceased participants who had earned a vested pension benefit before their death. The nature of the protection depends on the type of plan and whether the participant dies before or after payment of the pension benefit is scheduled to begin, otherwise known as the annuity starting date.  It is also important to remember that because they are non-probate assets, the assets held in a retirement account can be paid out to the beneficiary shortly after the owner’s death.

An IRA is a tax–advantaged retirement account that you own and control. Earnings generated can compound on a tax–deferred basis until withdrawal. In essence, an IRA is like having your own personal pension that you and/or your employer may contribute to for your retirement years.  There are numerous different types of IRAs, the most common of which include a traditional IRA and a Roth IRA. Because each has different rules regarding taxation and withdrawals it is important to understand those rules before establishing an IRA.

The federal gift and estate tax is effectively a tax on the transfer of wealth. A gross estate includes anything a decedent owned at the time of death that has value.  Without any deductions or adjustments to your estate, it could lose 40 percent of its value to federal gift and estate taxes. Both your financial planning and estate planning goals should consider the impact taxes will have throughout your life and at the time of your death.

Yes. Asset Protection planning should be part of any well thought out estate plan. Creating a financial plan that helps you amass a respectable estate and an estate plan that ensures your estate assets will be distributed accordingly to your wishes when you are gone only takes care of two-thirds of the bigger plan. You also need to protect the assets you acquire so that you will still have some left to pass down to loved ones after you are gone.

Financial planning focuses on acquiring assets and building up your estate. A comprehensive estate plan will include numerous goals, including things such as ensuring that your assets are available to provide for loved ones when you are gone and making sure your wishes are honored at the end of your life.  At some point, the goals of your financial plan with become entwined with the goals of your estate plan. For example, your financial plan will likely include retirement accounts. Those accounts could impact your eligibility for Medicaid if you need long-term care at some point. To ensure that everything works together well it is imperative that you incorporate financial planning into your estate plan.

For small business owners that do not plan to pass the business down to the next generation, it is a good idea to plan ahead for the sale of the business in the event of your death or capacity. One option is to enter into a Buy-Sell agreement. A Buy-Sell agreement guarantees that you (or your loved ones) will receive the fair market value of your interest in the business in the event you, or your surviving loved ones, must sell it later. In essence, a Buy-Sell agreement is a binding agreement between you and someone who agrees to purchase your interest in the business in the future for a pre-determined price or using a fixed method of determining the fair market value at the time of the sale.

One popular method used to transfer ownership of your business from one generation to the next is to create a Family Limited Partnership (FLP). An FLP allows you to transfer your legal interest in the business to the next generation slowly, over time, while maintaining control over the day-to-day management of the operation until such time as you are ready to retire. In addition, you may be able to gain tax advantages by using an FLP to transfer interest in your business to future generations.

At some point, you will no longer be at the helm of your business, either because you retire, sell your interest, or because of your death. Planning for that eventuality is imperative to ensure that you, or your loved ones, do not lose the value of all your hard work up to that point. Precisely when you should start thinking about transitioning ownership of the business depends, to a great extent, on whether you plan to pass it down to the next generation, sell your interest to a partner, or sell to a third party. If you plan to pass the business down to the next generation it is never too soon to get started. On the other hand, if the business is to be sold upon your death or incapacity, you should be planning for that now to ensure that your loved ones receive the fair market value of your interest in the business when the time comes to sell it, but you will not actually start transitioning ownership now.

Liquidity refers to cash assets or assets that can be readily converted to cash. A small business often lacks sufficient liquidity, particularly when they are relatively young businesses or when they are farm/ranch operations. All too often, the business’s assets are tied up in things such as equipment, supplies, merchandise, or livestock that cannot easily be converted to cash. In the event of your death, however, your entire estate could be subject to federal gift and estate taxes which are calculated based on the value of your estate, without regard to whether your estate assets are liquid or non-liquid assets. If your business lacks sufficient liquid assets to pay any tax due, critical assets might have to be sold to pay the tax, putting the entire business at risk.

Management continuity focuses on what happens in your absence. Who will take over the day-to-day management of your business? Never assume that someone is willing and able to do so, even if that person is an adult child or even a trusted senior employee. Even if they are, does he/she have the legal authority and practical capacity to step into your shoes? If not, the business could falter rapidly. Both customers and suppliers can become reluctant to do business with an operation when they are unsure who is running the show. You need a designated successor who is ready and able to step up and take over as smoothly as possible should the need arise.

Because every business is unique, no two business succession plans are the same. Nevertheless, there are some common goals and objectives that most business owners try to achieve with their plan, including:

• Designating someone to take over the immediate day to day control of your business if you are incapacitated tomorrow because of a catastrophic accident or debilitating illness.
• Ensuring that everyone impacted, including employees, business associates, and family, is prepared to accept your designated replacement.
• Preparing the necessary legal documents to ensure that your designated replacement will have the legal authority required to step in and take over.
• Making sure that your family will continue to benefit financially from the success of the business in the event of your incapacity.
• Putting a plan in place for someone to take over permanently, or to sell the business, in the event of your death.
• Keeping the business out of probate if possible.
• Devising a plan to value your interest in the business at the time of your death.
• Preparing the next generation to take over the business if you plan to keep it in the family.
• Creating the most advantageous legal structure for the business.
• Anticipating the tax implications for the business in the event of your death.
• Making sure sufficient liquid assets are available to cover any tax debt that might be owed when you die.

You understand the importance of protecting your business from common threats such as natural disasters, theft, and fire. In fact, you likely purchased insurance to compensate you in the event of a loss caused by a covered event. Have you considered though what would happen to the business if something happened to you? Not only could your business suffer considerable economic losses in your absence, but the entire business could go under without you at the helm. Incorporating business succession planning into your overall estate plan helps to ensure that your business continues to successfully operate in the wake of your sudden death or incapacitation.

Not to worry – you can delegate the authority to make health care decisions for you to a chosen loved one; however, you must execute a different type of document known as an “advance directive.”  State law also governs which advanced directives are recognized within the state. In California, an advance directive known as a Medical Power of Attorney gives the person you name as your Agent the authority to make any and all health care decisions for you in accordance with your wishes, including your religious and moral beliefs, when you are no longer capable of making them yourself. Similar to a general POA, you can give your Agent as much authority as allowable under the law or you can limit that authority.

Yes. Even a general Power of Attorney has limits. Exactly what those limits are will depend on the state; however, most states prohibit an Agent from self-dealing, making gifts in the Principal’s name, and making health care decisions for the Principal.

Although the authority granted in a Power of Attorney is well established by law, it is not uncommon for a third party to refuse to honor that authority nonetheless. A common reason for refusing to honor an Agent’s authority is claiming that the POA was executed too long ago. A third party may also question the authenticity of the document or refuse to honor a POA unless it is created using their form. Enacted in 2017, the California Durable Power of Attorney Law dictates that when a POA is presented to a third-party that third-party now has three choices – to accept it, to request that the agent sign a certificate, or to request the agent provide an opinion of counsel. The new law also imposes time periods within a third part must act and sets forth 11 reasons why a third-party can refuse to honor an Agent’s authority. If the third party does refuse using one of those 11 reasons, it is required to give the Agent a written Private Reason Affidavit, which is signed under penalty of perjury.

Both a general and a limited POA can be a springing POA. A springing POA has special language in it that causes the Agent’s authority to “spring” into action at a specific time or upon the occurrence of a specific event. For example, you might create a general POA that does not actually go into effect unless you have been missing for more than 48 hours or until you have been declared incapacitated by a physician. If the event occurs, your Agent’s authority “springs” into action.

Historically, the authority granted to an Agent in a POA automatically terminated upon the death or incapacity of the Principal. The problem with that was that the possibility of becoming incapacitated has always been a common motivation for executing a POA in the first place. If your goal is to ensure that the person you name as your Agent has the authority to act on your behalf if you suffer a period of incapacity, but that authority automatically terminates when you become incapacitated, there’s a problem. To resolve that problem, the concept of a “durable” POA evolved. When a POA is made durable it simply means that the Agent’s authority survives the incapacity of the Principal.

A limited POA only grants to your Agent the limited, and specific, authority outlines in the POA. For example, you might grant an Agent the specific power of attorney to act on your behalf during the closing for the sale of your home because you have to be out of town on business.  A limited POA is also frequently used by the parents of a minor child as a way to grant a caregiver the authority to consent to medical care for a child should an emergency arise while the parents are away.

A POA can be either general or limited. A general POA grants your Agent almost unlimited power to act on your behalf. This means that your Agent may be able to do things such as withdraw funds from your financial accounts, sell property and assets owned by you, and even enter into contracts in your name. Most states enforce some statutory restraints on an Agent even under a general Power of Attorney; however, if you execute a general POA you should assume that your Agent will have virtually unfettered control over your assets. With that in mind, you should only execute a general POA if you have complete trust in the person you name as your Agent.

At its most basic, a Power of Attorney (POA) is a legal document that allows you (the “Principal”) to grant another person (the “Agent”) the authority to act on your behalf in legal matters and transactions.  The type and extent of the legal authority you grant to an Agent in a POA depends on the type of Power of Attorney you execute.

Although you are not legally required to retain an attorney, doing so will help you avoid costly mistakes. Moreover, the estate will cover the cost of legal counsel.

The Executor must request several certified copies of the decedent’s death certificate. A copy will likely need to be submitted to the court to open probate. One will also be needed for the funeral home, and copies will likely be needed for third parties when acting as Executor.

No which is why the Executor must categorize estate assets. Some assets are classified as “non-probate” assets because they bypass probate altogether. Determining which assets are probate assets and which are non-probate assets is necessary to determine if the estate may qualify for a small estate alternative to formal probate. Common examples of non-probate assets include:

• Assets held in a trust
• Proceeds of a life insurance policy
• Accounts designated as POD or TOD
• Certain types of jointly held property
• Certain retirement accounts

Examples of steps to take include:

• Take possession of vehicles.
• Close financial accounts.
• Lock up real estate and arrange for upkeep.
• Speak to employees at a business and arrange for continued operations.

The Executor must locate and review all estate planning documents. Because estate planning documents may interact, it is crucial to locate all of them as soon as possible. Documents to look for may include a Will, trust agreement, life insurance policies, and/or Letter of Instruction among others. An original copy of the Will must be located to initiate the probate process which will officially grant you the authority you need to act as the Executor of the estate. An Executor must also ensure that assets are identified, located, and secured because he/she is ultimately responsible for them throughout the probate process.

If this is the first time you have been directly involved in the probate of an estate, it helps to get a general idea if what your role is during the process. The overall purpose of probate is to ensure that a decedent’s estate assets are identified, valued, and eventually transferred to the new owners. Before assets can be distributed, however, creditors must be given the opportunity to file claims and any federal and/or state gift and estate taxes must be paid. The Executor of an estate is appointed by the decedent in his/her Last Will and Testament and is charged with overseeing the probate of the estate.

Creating a family foundation is yet another way to include charitable gifting in your estate plan. This option, however, if best used when you have considerable assets to gift and the time to run the foundation once it is established. The benefits of using a foundation as your charitable gifting vehicle are numerous though, starting with the amount of control you will retain over how your gifts are used. In addition, creating a charitable foundation makes it much easier to involve your children and/or grandchildren in your philanthropic endeavors.  Running a foundation requires a considerable amount of your time and attention while you are alive though, particularly if you plan to grow the foundation by soliciting gifts from other donors as well. If you do create a family foundation, it can be an amazing gift to pass down to future generations.

A donor advised fund or annuity may also work for your gifting. It works by transferring gifted assets into the fund. Although you will no longer own the assets, you will be able to direct how the funds are used. If you gift to an annuity, you will also be able to choose the beneficiary who will receive the benefits from the annuity.

As the Settlor of your trust, you can appoint anyone you choose to be the Trustee; however, given the complex nature of a charitable lead or remainder trust you may wish to consider appointing a professional Trustee. One of the most common mistakes settlor’s make is appointing a family member or close friend as their Trustee without considering whether the individual is well suited for the position. Given the duties and responsibilities of a Trustee, you should appoint someone who has more than a rudimentary understanding of financial and legal concepts, which is why a professional Trustee is often the best choice.

A charitable remainder trust works just like a charitable lead trust, but in reverse. Trust assets are first distributed to at least one non-charitable beneficiary for a specified period with the remainder assets being distributed to at least one charitable beneficiary at the end of the time period. Using that same $1 million, in a charitable remainder trust you might create terms that direct distributions of $20,000 to each of your four children for ten years. After ten years, the assets remaining in the trust would be distributed to your named charitable beneficiary (or beneficiaries). Keep in mind that the trust should be earning interest during the ten-year period of initial distributions as well.

A charitable lead trust is structured so that assets from the trust are distributed to at least one charitable beneficiary for a specified period first. At the end of that time, the assets remaining in the trust are distributed to at least one non-charitable beneficiary. For example, imagine that you established a charitable lead trust and transferred $1 million into the trust. The terms might direct distributions in the amount of $50,000 to be made to your chosen charity each year for ten years. The terms might further dictate that at the end of that 10-year period the assets remaining in the trust are to be distributed to your four adult children

For many people, a trust does offer several advantages that a Will cannot when it comes to charitable gifting. For instance, you can retain a significant amount of control over how your designated charity uses the assets you gift through the trust terms you create as the Settlor of the trust. In addition, when you create a trust, you choose a Trustee who is responsible for managing the trust and protecting the trust assets, offering additional reassurance that the assets you gift will continue to grow and further your philanthropical goals.

Yes. Making gifts in your Will is certainly the simplest way to make a charitable gift; however, there are several drawbacks to using this method. First and foremost, gifts made using a Will do not allow you to retain any control over how the gift is used by the beneficiary. Once a gift is made in your Will the funds or assets gifted become the property of the recipient with no strings attached. If it matters to you how your assets are used by the charity, gifting in your Will is not an ideal option. In addition, if you wish to make any changes to the gifts you make in your Will it is usually necessary to revoke your Will and execute a new one. Adding a charitable gift, therefore, would require you to execute a new Will which is rather cumbersome. Finally, by waiting to make your charitable gift in your Will you miss out on any potential tax benefits you might get from those gifts and, instead, your estate may incur and estate tax debt because the assets remained in your estate until after your death.

If philanthropy is part of life right now, why not make it part of the legacy you leave behind when you are gone? Philanthropy can take many forms and can be directed at a wide number of diverse beneficiaries. It can also be handled in several different ways in your estate plan, depending on the type of beneficiary, size and complexity of the gift, and the amount of control you want to maintain over that gift. To help you better understand your charitable gifting options, the estate planning attorneys at Collins Law Group have put together some frequently asked questions and answers relating to charitable gifting. If you have additional questions or concerns, please feel free to contact our office to schedule a consultation.

Nursing home care is expensive. Most basic health insurance plans will not cover the costs associated with long-term care nor will Medicare. Unless you have the resources to cover the cost of nursing home care out of pocket and indefinitely, you will likely find yourself turning to Medicaid for help, like over half of all seniors in nursing home facilities. Medicaid Will help with your nursing home expenses if you are eligible for benefits. To be eligible, you must contend with exceptionally low “countable resources” limits that could put your retirement nest egg at risk if you failed to plan ahead – hence the need for Medicaid planning.

Medicaid is a healthcare program that is primarily funded by the U.S. federal government; however, it is administered by the individual states. Consequently, the eligibility guidelines and benefits offered can vary somewhat from one state to the next. Most states offer different categories of Medicaid, such as Medicaid for children, for pregnant women, and for the aged and disabled.

Doing your homework when searching for a nursing home is crucial to ensuring that the care you, or a loved one, receive is the best possible care. In California, there are several excellent resources available, including the California Department of Public Health and gov (the federal government’s official site for Medicare).

One of the most important reasons to include nursing home planning in your comprehensive estate plan is the cost of that care. As of 2021, the average cost of a year in long-term care is over $100,000 – and Californians can expect to pay considerably more than the national average. Experts tell us that in 20 years the cost will likely double. With an average length of stay of three years, paying out of pocket for the cost of nursing home care can deplete a retirement nest egg.

The average life expectancy in the U.S. has almost doubled in the last century. Living longer is certainly good news; however, the longer you live, the greater your odds of needing long-term care. Someone entering their retirement years today stands over a 50 percent chance of eventually needing long-term care (LTC) and those odds only increase the longer you live.  Given the importance of the care you receive and the cost of that care, planning for the possibility that you will need nursing home care should be part of your overall estate plan.

For seniors who need assistance with the daily tasks of living or who require less extensive medical care, there are alternatives to nursing home care, including home health care, adult day health care, and assisted living facilities.

The U.S. Senate Special Committee on Aging explained the difference as follows: “It [long-term care] differs from other types of health care in that the goal of long-term care is not to cure an illness, but to allow an individual to attain and maintain an optimal level of functioning….Long-term care encompasses a wide array of medical, social, personal, and supportive and specialized housing services needed by individuals who have lost some capacity for self-care because of a chronic illness or disabling condition.”

The annual exclusion is an extremely beneficial tax avoidance tool that allows each taxpayer to gift up to $15,000 in assets to an unlimited number of beneficiaries each year tax-free. Couples can gift-split and gift assets valued at up to $30,000. By way of illustration, a married couple with two children and four grandchildren could transfer $180,000 in assets each year without using any of their lifetime exemption.

Portability refers to a surviving spouse’s ability to use any unused portion of a deceased spouse’s lifetime exemption. For example, imagine that you are married, and your spouse passes away leaving behind an estate (including lifetime gifts) valued at $9 million which is less than the current lifetime exemption limit. Because your spouse did not use all his/her lifetime exemption, the remainder would “port” over to you. You could then use that remainder, along with your own lifetime exemption, when your estate is probated.

Each taxpayer is entitled to make use of the lifetime exemption to reduce the amount of gift and estate taxes owed by their estate. ATRA set the lifetime exemption amount at $5 million, to be adjusted for inflation each year; however, President Trump signed tax legislation into law that significantly increased the lifetime exemption amount for 2018 and for several years to come. These exemption amounts are scheduled to increase with inflation each year until 2025. On January 1, 2026, the exemption amounts are scheduled to revert to the 2017 levels, adjusted for inflation.

An estate tax is a tax imposed on the estate while an inheritance tax is a tax imposed on an individual when they inherit assets. As such, estate taxes must be calculated and paid by the estate using estate assets prior to any assets being passed down to beneficiaries or heirs. An inheritance tax, on the other hand, is paid by the beneficiary or heir after those estate assets have been passed down. As of 2021, California does not collect an inheritance tax on inherited assets.

While every taxpayer’s estate is subject to federal gift and estate taxes, a handful of states also impose an estate tax. California does not impose a state level estate tax as of 2021. If you own property in another state, however, you would be wise to find out if that state imposes a state level estate tax because your property in that state could be subject to the tax. In addition, the existence of a state level tax on estates is something that can change so be sure to consult with an estate planning attorney before assuming no tax will be levied on your estate.

The federal gift and estate tax operates as a tax on the transfer of wealth. Every estate is potentially subject to the federal gift and estate tax; however, every taxpayer is also entitled to an exemption before taxes are levied. Federal gift and estate taxes apply to the combined total of the value of all gifts made during a taxpayer’s lifetime and the value of all assets owned by the taxpayer at the time of death. Although the federal gift and estate tax rate fluctuated historically, the American Taxpayer Relief Act of 2012 (ATRA) permanently set the rate at 40 percent.