Newman Law Group

Tustin Estate Planning Law Blog

Is having a will enough to protect estate assets?

The new year has begun and it is a time that people often take a measure of their lives and make goals for the coming year. Estate planning can figure into some of these goals. Life changes such as getting married, the birth of a child or starting a new job can inspire a person to write a will in California. But is having a will in place enough to protect one's estate assets?

A will is a good first step in protecting one's heirs and determining how one's affairs are to be handled after one's death. But it is just a first step. A more detailed estate plan can help to avoid family squabbles, clarify health care directives and clarify the what, why and who of one's final wishes.

Estate planning documents should be revised following a divorce

People in California marry for love, begin families and build futures together. Estate planning is frequently part of that process. While divorce is not the anticipated outcome when a couple marries, a significant percentage of marriages do end in divorce. In that event, an estate plan will need to be revised.

After a divorce, certain aspects of the plan need to be addressed and probably changed. If a spouse is the beneficiary or representative in the will, that may be a change one wishes to make. In addition, if the previous partner's family is included in the will that may need to be looked at. One may not want an ex-spouse's relative named as a guardian for minor children, for example.

Where to begin to protect estate assets

Another year is coming ever closer to its end. As people review the past and anticipate the future, resolutions and plans for the New Year are made. Among those plans may be a plan to protect one's estate assets. A comprehensive estate plan can go a long way towards achieving that goal, but how does one begin in California?

Every adult can benefit from having an estate plan. Even if one believes that his or her net worth is not sufficient to merit a will, most everyone has possessions that are dear to them. In addition, a trust or living will can provide for medical decisions that may need to be made in the event of one's incapacitation and inability to make those decisions.

Estate planning can be a gift to the next generation

Tis the season of giving in California and asking the perennial question of what gifts to get one's family for the holidays. As the baby boomer generation enters their 60s and 70s, they are seeing their own children become adults. Baby boomers have begun to share their wealth with their children and grandchildren. In so doing, they are concerned that the Millennial and GenX generations are not focused on estate planning.

This concern has inspired the idea of gifting an estate plan by offering to pay to have one created. The younger generation may not be as concerned with the future of their finances as they are with the present concerns regarding student debt, growing families and so on. There are steps that parents can take to broach the subject with their adult children and to steer them in the right direction.

Wills can lessen family anguish in the event of a tragedy

Mortality is a fact of life, and no one in California will live forever. While this is an accepted fact, younger people tend to focus less on their mortality than those who may be middle aged or older. There is a certain feeling of perpetual immortality among the young. Sadly, this feeling has been dealt a mortal blow in the recent shootings at a concert in Las Vegas and a night club and high school in Florida, to name just a few of the mass shootings that have taken too many young lives. Many of those who lost their lives likely had no wills or other estate documents in place.

It is a sad fact that today's young people, also known as millennials, may benefit from having a will, health care directive or other estate planning documents in place. Families who face the ultimate tragedy, having to bury a child, may have had to do so without knowing their young adult children's wishes regarding end of life care, organ donation and other final wishes. In addition, most may not have access to bank accounts, social media passwords and other important pieces of information regarding their loved one's everyday life.

Estate administration is a key component to any plan

As one year ends and another begins it is a time to review the past and look to and plan for the future in California. Future plans may include setting up an estate plan or revising an existing plan. If a trust is involved, an important decision must be made that will significantly impact estate administration. Who will be the trustee?

There are many factors that need to be considered when designating a trustee. Many people will choose a spouse or a child as a trustee. A person who is designated as trustee of a trust assumes certain rights and responsibilities. The responsibilities include remaining impartial, making prudent investment decisions and properly accounting for these decisions to the beneficiaries.

Distribution of estate assets need not cause family squabbling

People in California are becoming aware of the importance of estate planning due in part to the number of prominent people who have recently passed away without having one. The lack of a plan can cause chaos and tie up an estate in probate for years. Simply having an estate plan may not resolve all of the possible issues that could arise, regarding distribution of estate assets.

One area that is sometimes overlooked is the bequeathing of individual items. A will or a trust designates the beneficiaries for one's belongings, especially large ones. For items such as real estate and financial assets, the beneficiaries will likely be clearly identified. However, the document will most likely not contain a complete inventory of all of one's belongings.

Reducing estate taxes in 2019

Another year is coming to an end. With the beginning of 2019, aspects of the new tax law will come into play in California. Among these are new limits and parameters on estate and gift amounts. Both provide important tools for reducing estate taxes.

The exempt amount on estate and gift taxes will again increase in 2019. The 2018 limit was $11.18 million, and it is increasing to $11.4 million in 2019. These are the individual amounts. A couple's exemption will be $22.8 million in 2019. The implication of this is that a couple can leave up to $22.8 million in their will, and the recipients will not owe an estate tax on that amount.

Health care directives can ease the process of dying

People are living longer in California and in many cases they are remaining healthy well into their later years. Eventually, age will catch up with a person and one's health can begin to fail. Health care directives can specify to one's family exactly what one's desires and directives are regarding end-of-life care or care if one becomes incapacitated.

While no one wants to dwell on the subject of aging and dying, making plans to deal with the eventuality can make the hard decisions easier for loved ones to bear. Rather than having to make the decisions in a hospital room after a sudden accident or ailment, a health care directive informs all concerned of the patient's wishes. Having a document that stipulates a person's wishes regarding feeding tubes, life support and other life saving measures allows a family to focus on the well-being of the patient without the stress of how to proceed with the patient's care.

Wills may need revision to ensure proper asset distribution

Baby boomers are retiring at an astonishing rate in California. Now in their 50s and 60s, many baby boomers are stepping back from careers to enjoy grandchildren, golf and other retirement pursuits. One issue they may need to pay attention to is their estate plans. Many estate plans are created when families are young, and one of the chief concerns is care for children if parents die prematurely. Once the children are grown, wills and other estate plan documents may need to be revised to reflect changes in a family's financial situation and their desires for asset distribution.

Rather than focusing on a young child's well-being, estate plans involving adult children may be more focused on an equal distribution of assets, charitable giving and tax considerations. Making these decisions can be very emotional as facing one's own death is never an easy prospect. However, if an estate plan is not in place and current, a judge may make decisions regarding a person's assets that may not reflect one's ultimate wishes.