Newman Law Group

Tustin Estate Planning Law Blog

Including frequent flyer miles in estate planning

Estate planning can be a complex undertaking in California. In creating an estate plan, a person is determining who will inherit his or her accumulated assets after the person's death. Assets can include personal belongings, financial assets and real property, to name a few. Assets included in estate planning can also include frequent flier miles and loyalty rewards from credit cards.

When Anthony Bourdain recently passed away, some people were surprised at the relatively modest size of his estate. The bulk of the estate was left to his young daughter. His frequent flyer miles he left to his estranged wife to use as she feels he would have wished. Considering the number of miles he flew, this was probably not an insubstantial bequest.

Trust preparation for the care of a specific loved one

Estate planning can be a complex process, especially when considering the care and support of a loved one well into the future. California families seeking to provide for loved ones who are unable to care for themselves may consider taking specific steps, particularly drafting a special needs trust. Trust preparation requires thoughtful consideration of future needs and appropriate guidance.

Some people may think it is best to leave money to a sibling or another family member for the care of a special needs loved one, but that is not always the best option. In fact, if that person dies or is unable to speak for him or herself, that money may end up being used for something else. Leaving money and assets for the special needs person directly, however, could lead to the loss of certain benefits.

Advice to seniors: Transfer assets to a trust to protect them

Thanks to healthier living and better medicine, people are living longer in California. However, the mind does not necessarily stay sharp into old age. A loss of mental capacity can leave a person financially vulnerable. This is particularly true if the individual has a significant amount of money and does not have a trust in place. A decision to transfer assets into a trust could ensure that a person's estate is handled according to his or her wishes should one become incapacitated.

The estate of Stan Lee, the creator of Marvel Comics superheroes such as Iron Man, Black Panther and Spiderman is said to be the target of financial predators. Mr. Lee, who is 95, is said to be suffering from vision loss, hearing loss and mental impairment and family members and colleagues are reportedly trying to gain control of his considerable assets. With people living longer, estate planners are concerned that such situations will become more common.

Wills are drafted to inform others

Proper estate planning can be a gift to one's loved ones. By outlining a plan for the distribution of assets, an individual may reduce the amount of time and money spent to settle one's estate after a death. Wills are an important tool for individuals in the estate planning process. Individuals in California may wish to know more about the function of a will and how it is implemented. 

A will can be drafted by hand, typed or written with the aid of an attorney. In the will, the person writing it should name an executor, or the person who will take responsibility for settling the estate. The will should contain instructions for paying one's final debts and also tell who should receive any remaining assets. 

Revocable living trust a good choice to transfer assets

Many people wish to make the distribution of their estate assets as easy as possible for their family and friends. There are options to ensure that loved ones receive their fair share after one passes away. To transfer assets quickly, privately and to avoid probate, many individuals in California select a revocable living trust

By choosing to place assets in trust versus granting them to heirs in the will, the person's family and friends will likely face fewer challenges when the time comes to administer the estate. The revocable living trust is a legal document like a will, but it allows the estate to avoid probate when correctly used. A living trust also prevents the family from having to work with a lawyer after the individual's death while they are grieving.

Trust preparation includes funding the trust

Some individuals have questions about what assets should be included in their trusts. Certain financial accounts such as CDs and money market accounts can be placed into the trust or left separate. While, sometimes, there may be a good reason for leaving certain accounts out of the trust, it is usually good practice to fund the trust with all of one's financial accounts. In California, doing so can be a part of trust preparation. 

A trust can only control the assets that have been titled in its name. However, most people include a pour-over provision in their wills that will funnel any probate assets into the trust eventually. However, usually an individual's goal in creating a trust is to avoid probate and also to allow another person to have administrative abilities if they become incapacitated as well. 

A medical power of attorney can help you in times of need

Most people think of estate planning and wills, but there are other elements that can assist the individual during times of need while still living. A medical power of attorney is one such element of a complete estate plan that an individual in California can utilize to assist him or her while alive and in need of extra support. The medical POA enables the individual to assign a person to make medical decisions on his or her behalf if he or she is incapacitated. 

A medical power of attorney differs from a living will in that the medical POA may act on the person's behalf any time the person is incapacitated instead of just at the end of life. By appointing a medical POA, the individual can prevent family members from having to make difficult decisions and disagreeing about treatments. The individual will tell the designated person about his or her wishes, and then the POA will take action when the right time arrives. 

Estate administration can be eased with planning

After a death in the family, someone will likely be chosen to handle the bulk of the person's estate. When the individual has a comprehensive estate plan with an allocated executor, estate administration can be less stressful for the person doing the work, especially in the area of resolving finances. Some experts have gathered other information that can be helpful to California residents during the estate administration process. 

First of all, a person should not try to make major decisions while emotions are high. Don't feel rushed, because that is when a person is likely to overlook important details. Secondly, a person should not feel that he or she has to go it alone. Probate attorneys and financial adviser can provide guidance to the person settling the estate. 

Protecting assets easier with generation-skipping trust

Changes in the estate and gift tax have made transferring wealth easier than before. New but temporary higher exemptions allow individuals and couples to gift, bequeath or give to the next generation greater sums of money than ever before. In California, there is less worry about estate taxes, but the concern still exists for some, and certain strategies can help those who worry about protecting assets

From now until 2025, the new tax law allows an individual to gift $11.2 million tax-free. The amount is doubled for couples. Any gifts surpassing that number are subject to a 40 percent estate tax. A generation-skipping transfer is also subject to an additional 40 percent tax, per current tax law. 

How does probate affect an estate plan?

Hopefully, when a person dies he or she has left behind a set of instructions for the survivors to disburse and distribute the assets. Unfortunately, some individuals die intestate, or without a will, and those assets are distributed according to California state law and not according to the individual's wishes. The estates of those who take the step to create a last will and testament will go into probate, a process designed to establish that the will is true and accurate. Others use methods to try to avoid probate. By keeping in mind the fact that wills can enter into a lengthy and challenging court process, individuals planning their estates can take steps to make the process easier. 

Probate is the official proving of a will -- certifying in a court of law that the will of the decedent is the true last testament of that person. Experts recommend that everyone have a will, even if he or she intends to pass assets along using methods that can help one avoid the court process. A will can help set guidelines for property that was overlooked or acquired after the will was drafted.