Find Answers to Your Questions from Our Orange County Trust and Will Lawyers

We believe in client service. That means that we field questions daily! Our Villa Park and Placentia estate lawyers compiled a list of the most frequently asked questions about California trust issues, California wills, and California estate planning. We hope you find the answers you need.

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  • Can a non-family member serve as the conservator of my loved one’s estate?

    When your loved one is no longer capable of managing his own affairs, it may be time to seek a conservatorship. A conservator is a person who is put in charge of handling your loved ones affairs, including managing and protecting the assets of his estate. A family member typically petitions the court to serve in this role. In some cases, however, a family member may not be the best option for serving as conservator. When this happens, a non-family member may be appointed.

    4 Situations When a Family Member May Not Be the Ideal Choice for Conservator

    When is a non-family member a better choice for serving as conservator of your loved one’s estate? The following are four examples:

    1. A family member is unavailable to serve in the role of conservator.
    2. A family member is incapable of serving in the role of conservator.
    3. The person who needs a conservator does not want a family member to serve in this role.
    4. The person who needs a conservator appointed someone to serve in the role and cited him in the estate plan.

    When these situations arise, a non-family member can serve in the role of conservator. There are specific agencies and individuals who have the authority to serve when appointed by the court. For example, The Public Guardian is an agency that may be appointed as a non-family conservator. In addition, there are many non-profit organizations willing to serve in the role. Another option is to hire a private individual who is available to serve. These people are known as private professional conservators, and they are required to be licensed in the State of California to serve in this capacity. To maintain their license, these people must meet ongoing educational requirements.

     

  • What should I do with my estate plan now that I’ve been diagnosed with early stage dementia?

    As health care improves and people begin to live longer, the number of people who will eventually face a dementia diagnosis during their lifetime is increasing. Unless medical breakthroughs begin to better treat this condition, these numbers will only continue to grow over time. People suffering from dementia typically lose their memory, cognitive ability, and language skills. As a result, it is crucial for people receiving or concerned about a dementia diagnosis to update their estate plan while they still have legal capacity to do so.

    5 Steps for Updating an Estate Plan After a Dementia Diagnosis

    What should you do to update your estate plan after a diagnosis of dementia? We recommend that you take the following steps:

    1. Make sure that your durable power of attorney is up to date.
    2. Review the provisions of your advance health care directive to ensure they are current and reflect your wishes.
    3. Review and update your will to ensure that it reflects your current goals and needs and appoints someone who is available to serve as the personal representative of your estate.
    4. Review the beneficiary designations on your various assets. Typically, assets such as life insurance policies, retirement accounts, and certain types of bank accounts allow you to name a beneficiary to receive the asset when you die. This avoids the need for the asset to pass through the probate administration process if you are to die.
    5. Consider adding a living trust to your estate plan or updating your existing trust. Your trust can include specific provisions that address what should happen with your assets in the event you become incapacitated. You can include guidelines for your trustees that state your needs and wishes during any period of incapacity. The trustee will have authority to manage the assets in your trust without court involvement. You can also include a provision that dictates exactly how and when you should be deemed to be incapacitated.

    Modifying an estate plan requires the guidance of an experienced attorney. To learn more, we encourage you to contact us today at (714) 459-5481.

     

  • Do I need to update my power of attorney if it does not contain a HIPAA provision?

     Most people should have an attorney review their estate plan every few years to determine whether updates are needed. Some clients may require more frequent updates. It is important that during these reviews, all of the documents that make up the overall estate plan be assessed. This includes a durable power of attorney. The power of attorney names an agent, or an attorney-in-fact, to make financial decisions on behalf of the person creating the document. There are several reasons why a power of attorney may need updating, including if the document is missing a crucial provision relating to the HIPAA Privacy Act.

    4 Facts About HIPAA and Necessary Updates to a Power of Attorney

    Why does a power of attorney need to be rewritten if it lacks reference to the HIPAA Privacy Act? The following is an overview:

    1. The Health Insurance Portability and Accountability Act was enacted by Congress in 1996.
    2. The HIPAA Act requires that privacy rights and responsibilities be addressed in a power of attorney.
    3. In order to receive protected health information about a person, the power of attorney must include important HIPAA language authorizing the release of the information to the attorney-in-fact. Additionally, the ACT must be specifically referenced.
    4. If a power of attorney does not contain the necessary references to the Act, it should be revoked, and a new power of attorney should be signed.

    To update the power of attorney with this missing information, the old power of attorney must first be revoked, and a new power of attorney should then be executed. We can help to ensure that this is handled properly. To learn more, contact us today at (714) 459-5481.

     

  • Can I have multiple transfer-on-death beneficiaries for my stock or mutual funds?

    Creating an estate plan designed to help your loved ones avoid probate administration upon your death is an important goal for many people. This plan may need to be updated when new assets are acquired. This includes ownership in stocks or mutual funds. Fortunately, many stocks and mutual funds can take advantage of transfer-on-death registration under the Uniform Transfer-On-Death Securities Registration Act. This right may even apply when you want to name multiple beneficiaries rather than just one.

    4 Tips for Leaving Stock or Mutual Funds to Multiple Beneficiaries

    Changing ownership of your stock or mutual fund accounts to beneficiary form is a wise idea because the asset will transfer automatically to your beneficiary upon your death. If you wish to name multiple beneficiaries, consider the following:

    1. Name all of the intended beneficiaries on the form provided by the broker or transfer agent for the stock, or provide the names in a letter if instructed to do so as part of the change of ownership process.
    2. Decide if you want to leave the beneficiaries equal or unequal shares in the asset. If you do not specify one way or the other, the beneficiaries will each acquire an equal share after you die.
    3. Make your determination in advance. Some stockbrokers or transfer agents may have a policy that does not allow for unequal ownership, however, so it’s important to make this determination in advance. If you do not want the two beneficiaries to receive equal shares, you may need to consider different forms of ownership.
    4. Consider if naming multiple beneficiaries is the best option. If the securities are not easily divisible, such as with a single bond and three intended beneficiaries, this may not be the best option for this particular asset.

    An experienced legal professional can help you with your overall estate plan when circumstances or assets change. We are here to help. Check out our client testimonials page today to learn more.

     

  • How do I make gifts in order to reduce my potential estate tax liability?

    People with estates worth more than $5.43 million in 2015 may want to consider updating their estate plan in order to reduce potential estate tax liability when they die. One strategy people use for this purpose is to make annual gifts as part of their estate plan. While doing so is not complicated on its own, there are many considerations that should be made before proceeding.

    6 Steps for Adding a Gifting Strategy to Your Estate Plan

    If you’re ready to add a gifting strategy to your estate plan, consider taking the following steps:

    1. Calculate the size of your estate and determine your potential estate tax liability.
    2. Determine what impact a gifting strategy might have on this potential estate tax.
    3. Discuss with your attorney the various types of gifts that can be made without incurring gift tax.
    4. Determine what types of gifts you would like to make and in what amounts. For example, you may wish to make gifts by paying tuition directly to a school, paying medical expenses, or making gifts to a charity. You may also give up to $14,000 annually to any number of different recipients without incurring tax. This amount applies to 2015 and is set to increase over time.
    5. Consider the benefits of various types of gifts and the nature of assets used to make these gifts. An attorney or tax advisor can help you develop the strategy that most benefits your situation.
    6. Determine if a federal gift tax return needs to be filed, even if no tax is due at that time.

    With potential tax liability at stake, it’s important to seek guidance before entering into any type of gifting strategy. We are here to help. Check out our client testimonials page today to learn more about how we have helped previous clients.

     

  • Do I need to update my power of attorney after moving to a new state?

    Moving to a new state brings about many changes in various areas of life. This includes your estate plan and financial affairs. While your power of attorney may still be valid after a move, it is important to consult with an attorney to determine whether an update is advisable.

    3 Tips for Updating Your Power of Attorney When Moving to a New State

    Why should you consider an update to your power of attorney after a move? The following are three reasons:

    1. If you move to a different state, consult with a local estate planning attorney to determine whether your power of attorney is effective in the way that you intended it to be when you created it.
    2. If your new home state has certain and specific requirements, your durable power of attorney may need to be recorded at the registry of deeds or filed with local government.
    3. Even if your durable power of attorney is legally valid in your new home state, there may be practical issues that arise with its continued use. For example, a bank or a lending institution may reject the power of attorney out of concern for its own liability. The bank or lending institution may have no legal basis for doing so, but if you have to haggle with the bank in order to be able to use it, the power of attorney is certainly less effective than what you likely intended.

    To learn more about updating your estate plan and power of attorney, contact us today at (714) 459-5481 for more information.

     

  • How can I incorporate my stepchildren into my estate plan?

    When you created your estate plan, you may not have made accommodations for your stepchildren. Perhaps they were not in your life at that time, or your relationship has grown over the years. Regardless of the motivation, if you want to ensure that your stepchildren receive an inheritance after you die, it is important to update your estate plan. There are many options available to help you accomplish your goals.

    4 Options to Make Stepchildren Beneficiaries of Your Estate

    If you are considering an estate plan update to incorporate your stepchildren, the following are four options that should be weighed:

    1. Consider using life insurance policies to make gifts of specific dollar amounts to your stepchildren. You do not have to give your stepchildren the entire value of the policy. Instead, you can have them receive a percentage of the death benefit. This allows you to provide for your stepchildren without necessarily having to amend your will or trust. The drawback to this method is that it could result in your stepchildren receiving a greater percentage of your overall estate than you originally intended if the remainder of your estate shrinks significantly before your death.
    2. Consider making gifts to your stepchildren during your lifetime. If you can afford to do so and if your attorney and tax advisor recommend it, making gifts to your stepchildren while you are still alive can help you provide for these family members without needing to amend your will or trust. A negative aspect of using this method is that it is difficult to predict your financial situation many years down the road. You may give away assets now that you need later.
    3. Consider amending your trust to incorporate your stepchildren. In order for this method to work effectively, it is important to fund the trust during your lifetime or through the use of a pour over will at your death. If the assets are never moved into the trust, your stepchildren will receive nothing.
    4. Consider executing a codicil to your will or creating a new one entirely. Doing so can help ensure that your stepchildren are treated as if they were your biological children when you die. However, if all of your assets are held in trust, owned jointly with a right of survivorship, or have a named beneficiary, the terms of the will may not guarantee that your stepchildren ultimately receive anything.

    Fortunately, an experienced attorney can help you determine which option is best for your needs. Contact us today at (714) 459-5481 for more information.

     

  • I want to modify my estate plan to put my home in trust. How do I do that?

    As part of updating your estate plan, you may decide it is time to move your real estate into a revocable trust. This may be the case when you update a plan to involve a trust, or when you determine that your current form of property ownership does not accomplish your estate planning goals. For example, if you own the property in your individual name, the property will have to go through the probate administration process if you die. Similarly, if you previously held the property as a joint tenant with your child, you may decide that this is too risky since the property technically belongs to both of you. Regardless of the motivation, documenting the move of the property into the trust is the next step in the process.

    8 Steps for Transferring Real Estate Into Trust

    The following is an overview of how to move your real estate into trust:

    1. Verify the ownership on the current title to your property. Your attorney will likely order a title report or conduct research to determine the current record owner. The report will also reveal how the current property is held, such as through joint tenancy or as tenants in common if there are multiple owners.
    2. Obtain the legal description for the property.
    3. Prepare a deed transferring the property from yourself individually to yourself as trustee of your living trust. An attorney should always be used for this process because deeds must meet certain strict criteria in order to be recordable or valid.
    4. Contact your lender and title insurance company to notify them of the change in title. Typically, there should be no objection as long as the transfer is going to you as trustee of a revocable trust, you are the initial beneficiary, and you maintain the right to amend or revoke the trust.
    5. Sign the deed in the presence of a notary.
    6. Have the deed recorded. To do so, you must deliver the deed and a Preliminary Change of Ownership Report to the County Recorder. You will also be required to pay a recorder’s fee. Recording the deed can also be accomplished through the mail.
    7. Keep the deed in a safe place. After the deed is recorded, you will receive the original back in the mail. It is important to keep this deed in a safe place, or give it to your attorney for safekeeping.
    8. Make appropriate updates. If your trust contains a schedule of property that has been moved into the trust, ensure that it has been updated appropriately.

    Are you interested in learning more about amending your estate plan? We encourage you to get started by checking out our free pamphlet, The Ten Things You Must Know Before Creating (or Amending) Your Will or Trust.

     

  • Should I consider using a Grantor Retained Annuity Trust to hold title to my S-Corporation stock?

    If you have a sizeable estate and one of your assets consists of shares in an S-Corporation, it is important to consider an update to your estate plan. S-Corp stock requires careful estate planning in order to preserve the company’s status as an S-Corp. People with large estates that could be subject to estate tax after they die may consider using a special trust known as a Grantor Retained Annuity Trust (GRAT) to deal with their S-Corp shares. Updating an estate plan to add a GRAT could potentially reduce the estate’s tax burden while allowing for an efficient transfer of this important asset.

    Using a GRAT to Hold S-Corporation Stock

    While the rules and techniques surrounding GRATs and shares of S-Corporation stock are complex, the following is a general overview of how the GRAT can be used to handle the stock:

    1. A GRAT is a specialized trust used to transfer assets, including stock, to family members in trust.
    2. If the GRAT is drafted properly, it can be a qualified S-Corporation shareholder under the IRS rules.
    3. When using a GRAT, you retain a qualified annuity interest in the stock.
    4. As a result, the value of the gift of stock to the trust is greatly reduced.
    5. When the trust term ends, the stock passes to the beneficiaries of your trust.
    6. The value of the gift at that time is the fair market value of the property reduced by the present value of the retained interest. Your attorney will help you calculate this value.
    7. A GRAT is beneficial if you expect that the asset will appreciate quickly. A successful GRAT will remove the value of the appreciation of the S-Corporation stock from your estate.

    It is important to note, however, that a GRAT will not work if you do not outlive the term outlined in the trust. If that happens, the fair market value of the stock reverts back to your estate. Careful consideration under the guidance of a knowledgeable attorney should be given to your current needs and goals before updating your estate plan to add a GRAT.

     

  • Should I consider adding an informational letter to my existing estate plan?

    Some people may not realize that estate planning is more than a one-time endeavor. Instead, it should be viewed as an ongoing process throughout your life. Estate plans need to be updated as time goes on and circumstances change. One easy update you can consider is adding a letter or memorandum to your estate plan to address certain items that may not be handled through your other estate planning documents.

    Types of Information to Add to Your Estate Plan

    Why types of information should you consider including in the letter? The following is an overview:

    • Funeral arrangements. In this section of your letter, consider adding important information about your burial wishes that are not otherwise addressed as part of your estate plan. For example, you might want to include a list of people you want notified about your death and their contact information. You may also want to express your wishes about the burial or funeral ceremony, such as specific music you want played. If you have already paid for your funeral or burial in advance, be sure to list the relevant information, such as the location of the burial plot, the name of the funeral home, and the plot deed. If you prefer to be cremated, state where you would like your ashes distributed.
    • Financial and personal affairs. In order to ease the administration process, make a list of relevant individuals and organizations your loved ones should contact. This may include your attorney, accountant, and organizations such as the Social Security Administration. Also include current financial information such as account names and numbers, the name of your employer, and contact information for your insurance agent and financial advisor. It is also a good idea to provide the location of important paperwork such as the title to your car and location of your estate planning documents. Finally, consider making a list of your online accounts and their relevant passwords.
    • Tangible personal property. If your will or trust does not detail who should receive specific personal property items, consider including this information in your letter. Specify who should receive such items as photo albums, jewelry, and clothing.

    While this side letter may not be considered a legal document or legally binding, it can provide valuable information to your loved ones about your wishes. It may also help to ease the administration process. However, it is important to consult with your attorney before making this addition to your plan. He or she can help ensure that you address all important areas of information in the best possible way.