Newman Law Group

Tustin Estate Planning Law Blog

Estate assets belonging to the elderly may require protection

The sandwich generation is becoming a very popular term in the 21st century in California and elsewhere in the country. It refers to baby-boomers who are attempting to tend to the needs of adult children, aging parents and their own impending retirement years all at the same time. Needless to say, this generation is spread very thin across these three tasks. One area that may require extra attention is protecting the estate assets of their aging parents.

Financial abuse of the elderly is a real and growing issue. Many people faced with caring for parents and children are hiring caretakers for their elderly parents, which, sadly, can end in one's parents estate being exploited to benefit the caregiver. One such case occurred recently in Alameda.

Protecting assets for a special needs child

Estate planning in California can be complex and tricky in the best of situations but it takes on added gravity when a child with special needs is involved. A couple of different variables come into play when one is protecting assets in the interest of long-term care for a special needs child. There are options that can simplify the situation.

Planning for the future of a special needs child may find parents wishing they could have the gift of seeing what the future holds, even if only briefly. Not knowing what the future holds and not being fully able to predict a child's needs can make financial planning for the future a challenge. It becomes necessary to put together an estate plan with as much built-in flexibility as possible.

Estate planning and families can be a difficult mix

Families can be complicated, particularly extended families and new families. Divorce, re-marriage and children with a second spouse can all serve to complicate family dynamics, which can, in turn, complicate estate planning. Indeed, family conflict was recently cited as one of the three main threats to the success of estate planning in California and the rest of the country. According to the recent survey, the other two are market volatility and tax reform.

Nearly half of the estate planning professionals consulted for the survey cited family conflict as the biggest threat. Contributing to this belief is the difficulty that can surround designating beneficiaries, and another factor that contributed was a general lack of communication within the family. Estate planning usually involves goals for what the plan is expected to accomplish in retirement for the principals and following their deaths for their descendants.

Failure to do estate planning can lead to undesired outcomes

Estate planning can be a stressful process. It may be difficult to know where to begin. In addition to facing one's own mortality, creating an estate plan in California can be an emotional experience in deciding who gets what and when. Circumstances that can further complicate all of this include needing to provide for family members with special needs or family members from previous marriages. But deciding to let the task of estate planning wait until a later date may result in the state deciding how your estate is settled.

A plan should be set up to allow for changes as the circumstances of one's life change. Frequently, an initial plan will be created after the birth of a child. Such things as guardianship may be central at such a time. A couple in their 50s reviewed a will they had created when their three children were small. Two of the three children are now adults and the size of their estate had also grown.

Power of attorney vital in establishing end-of-life care

People frequently know the expiration dates on food in the refrigerator, a driver's license, medication and even a passport. One expiration date no one can know, in California or anywhere, is one's own. Coy Luther Perry III, better known as Luke Perry, the actor, died March 9 after suffering two strokes. He was just 52 years old. He had had a cancer scare in 2015 and established an estate plan at that time, most likely including a medical power of attorney.

The first stroke was severe and left the actor surviving by means of life support. Five days following the first stroke the family decided to terminate life support as it had become apparent he had probably suffered a second stroke and would not recover. The fact that the family was able to make the decision and have that decision respected indicates a medical power of attorney probably existed. Without it, especially if the family had not been able to agree, the decision would have been left to a probate court and a possibly a long, drawn out and public process.

Trust administration critical to the plan's success

In creating an estate plan for a sizable estate that will eventually be left to one's children, people frequently make use of trusts that enable them to control the distribution of the estate after one's death. This is frequently done to ensure that children are old enough and responsible enough to manage the assets received. For a trust to be carried out successfully in California, close attention should be paid to the trust administration.

Questions posed by the trust beneficiaries frequently involve what assets are being distributed and when they will be distributed. The plan may specify that a portion of an heir's trust is to be distributed at the age of 30 with the balance coming at the age of 40. In the case of multiple children, the value of the estate may be equally split but not dispersed at the same time as the children are of different ages.

Wills can protect both heirs and assets

Few things in life are certain. An old adage states that there are only two things in life one can be sure of, death and taxes. That statement is certainly true and one more that can be added is that one's wealth and property cannot accompany one to whatever an afterlife brings in California. Having a will or a trust can protect one's wealth and property left behind from undue taxes and ensure that one's heirs receive bequests as stipulated.

Wills can serve to protect both property and people. When property is bequeathed to a person or entity in a will, probate allows the property to be transferred as intended by the deceased. In some instances, particularly where children are concerned, assets and property may be held in a trust until a child is older. These trusts are put in the charge of a trustee until the child reaches the age specified in the trust at which point he or she receives the proceeds.

A trust can be used to transfer assets

Wills and trusts are common terms when discussing estate planning in California. The differences are not always clearly understood. Where a will can transfer assets only after one's passing, a trust can do more.

A will allows one to designate the disbursement of assets in one's own name after one passes. A trust goes further and can allow for control of one's affairs while one is still living in the event of physical or mental incapacity. Having a trust can eliminate the need for a will as instructions in a trust can be very detailed as to one's final wishes where property and asset distribution are concerned. A trust can also eliminate the need for probate, which can be very expensive. Avoiding probate can also keep the proceedings private as probate is a public process.

Estate planning vs. estate documents

It's almost mid-February, and perhaps one is sitting back and reflecting on a year that he or she believes is off to a good start in California. The often delayed task of estate planning has been completed. But has it? Has an estate plan actually been created or are there now estate documents where before there were none? And what is the difference?

Some people have a will, maybe a health care directive and even a medical power of attorney. These are estate documents, but they do not comprise a comprehensive estate plan. While many contingencies may be provided for in the existing documents, others may not be.

Wills are beneficial even if a couple has no children

So the New Year has passed, the parties are over and planning for all of those resolutions are well under way. One resolution many people make in California is to review their wills or to create one if it does not already exist. Life changes, such as the birth of a child, can cause a person to create a will. But what about the couple without children? Is a will really needed in that instance?

Regardless of whether or not a couple has children, they should have a will. Without a will, if a spouse dies, the surviving spouse may inherit some of the deceased's assets. Accounts that are not set up as survivorship accounts might not be payable to a surviving spouse without estate documents in place.