Newman Law Group

Tustin Estate Planning Law Blog

Health care planning helps achieve future goals

It's as old as the fable of the ant and the grasshopper. By now, most people know that planning for the future early can be a huge help later on in life. One way that individuals plan for future goals is through health care planning. California residents may choose to take certain steps toward end-of-life care now to ensure that needs are met further down the line. 

Assigning a power of attorney can allow an aging or incapacitated person to have their affairs managed by a responsible party while they are not able to. A power of attorney can manage finances and access medical information for the individual. Some people choose to use a revocable trust to allow a successor trustee to handle affairs easily when necessary. 

Trust preparation includes funding the trust

For many people, preparing for the future means making an estate plan. Instead of a will, some people choose to use a trust as a way to protect assets for heirs. One common trust preparation mistake is forgetting to transfer the title of assets into it. A trust is like a storage tote -- it only protects your valuables if you put them in it. California residents looking to offer the most benefit to their successors may find this reminder quite useful. 

In a revocable living trust, an individual and his or her spouse will transfer the title of all assets into it and serve as co-trustees. This won't change the trustee's ability to control the assets, but it will help the assets avoid probate in the event of the death of the trustee. After the trustee's death, the successor trustee can step in and begin to manage the assets. A successor trustee can also take charge if the original trustee becomes incapacitated. 

Naming, updating beneficiaries in wills could prove useful

It is not unusual for individuals to have different views on estate planning. Some parties may immediately consider it beneficial, and others may think it unnecessary or at least a low priority. Of course, even California residents who have created wills and other estate planning documents may not use their plans to full advantage if they make mistakes when naming beneficiaries.

One major issue that could lead to probate issues relates to not naming any beneficiaries at all. Some individuals may feel comfortable letting the court and state law dictate which surviving relatives receive what. However, not making designations could lead to drawn-out legal proceedings, and surviving loved ones could face conflict and contention over assets. Additionally, even if a person did have specific individuals in mind for bequests, if those ideas are not documented, they cannot be known in court.

Power of attorney can be useful part of aging plan

A person will sign a number of legal documents throughout his or her life. It has been argued that the power of attorney document is among the most important. However, many individuals never have one. In California, individuals who wish to prepare for a time when they are no longer able to make decisions for themselves may wish to learn more about this type of legal designation. 

One should never assume that all powers of attorney are the same, or depend on rote, simple forms to designate such. Since a person chosen to be one's personal representative will have the ability to make binding decisions. An individual should strive to make the responsibilities and limitations clear, as well as specific preferences. Finding a trustworthy person who has the personality and time to devote to the task can be extremely important as well. 

Estate administration today includes access to digital accounts

As a society, individuals are creating and using digital data more than ever before. It has been said that between the years of 2012 and 2014, humans produce more data than human civilization has ever produced in the history of time before that. In California, after a person passes away, the executor may need to have access to a person's various digital accounts. Estate administration can possibly be eased if a person specifies instructions for handling these accounts in the will. 

Since the phenomenon is relatively new, the law is still catching up with technology. Recently, a group of lawyers recommended a draft uniform document stating that a person should be able to specify in a will what happens with the digital assets after death. At least 39 states have adopted the uniform document, and several more are considering laws on this matter in the upcoming year. 

Dynasty trusts can aid in reducing estate taxes

A person with a significant amount of wealth may wish to maximize the benefit of passing along the wealth to heirs, or they could also wish to have some control over what happens to the assets after he or she dies. Certain types of trusts, such as a dynasty trust, may be more helpful for this than the typical will. Another benefit of a trust over a will is that it aids in reducing estate taxes. For some California individuals, a dynasty trust can help them achieve their estate planning goals. 

A trust prevents a single person from owning a particular asset. When the item is placed in the trust, it is owned by the trust. Then, the trustee can also set guidelines about who controls the asset and how the asset will be managed. The trust will then operate by those rules. 

Wills could require an update in 2018

The new year brings new tax laws, and new policies may give reason to adjust estate planning documents. The major change is the raising of the threshold for the estate tax, and those individuals who will be affected by the change will likely want to review estate documents. For most people in California, wills and trusts benefit from frequent review, with updates whenever there is a major life change. 

For married couples, federal estate taxes apply only to those with accumulated assets in excess of $22 million. This doesn't mean that most individuals wouldn't benefit from an estate plan, however. An important aspect of estate planning has to do with financial health while one is still alive, and how one chooses to pass along any assets after death. Each state sets its own procedures as to how property and funds are routed after a person passes away, and unless the person designates another way to do so, state law will determine the outcome. 

Many reasons for a plan to protect estate assets

This time of year, many people resolve to get financial affairs in order so they are better prepared for the future. The reasons for a plan to protect the estate assets are many. Recently, a news article covered some of the most common reasons for estate planning, and also gave some insight into the types of estate planning tools, which may be of interest to California residents. 

Estate panning can protect the family, prevent unnecessary costs and support important goals. Less often, it is used to protect people from tax implications, but recent changes have made the estate tax a concern only for those who have an estate valued at $11 million, or $22 million for couples. Family benefits include financially protecting an inheritance for the heirs and a surviving spouse, providing for minor children or disabled individuals, and naming guardians for any minor children. Cost reducing benefits include minimizing income taxes, preserving the family business and preventing the loss of assets to creditors. A person can choose to support important goals by making a gift to charity via the estate plan.

A trust can transfer assets to specified trustees

When it is time to plan for the passing of funds and property to others, many people wonder about their options for doing so. Some choose a will, but another option to transfer assets is the trust. Trusts are documents that can help a person determine how and to whom certain assets are disbursed, and they also have specific benefits for those California residents who choose to create one. 

A trust comes with several benefits, the main one being that it allows a person to choose where assets go and when the beneficiaries can access them. A trust can also pass those benefits quickly and privately, as opposed to the public probate process that a will must undergo. The trust can even possibly save court fees and estate taxes for the heirs.  

Trust preparation: Don't make these mistakes

Those people who are looking toward the end of their lives are already one step ahead of the game. By laying down plans for an estate, a person is able to ensure that specific wishes for the distribution of assets are honored after death. Unfortunately, a person who makes certain estate planning mistakes may not get the desired outcome. Careful trust preparation can help one achieve one's goals. Luckily, informed California residents can be better prepared to make certain estate planning choices. 

When planning a trust, one should ensure first that documents are kept up-to-date, accessible and that the relevant individuals such as successors are aware of the documents. Also important is funding the trust. A trust is only as good as the assets contained within it, so a person who has created such a document should ensure that the assets are transferred into the structure. Some individuals choose a pour-over clause, which says that any of the trustee's assets not held within the trust are transferred into it upon death.