Newman Law Group

Tustin Estate Planning Law Blog

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.

Health care directives can ease stress in later years

As people are living longer lives in California, their health does not always keep up with the elapsed time. Dementia is a term that is being heard more and more often. Sadly, it can negatively impact the care and well-being of those suffering from the malady. There have been many names in the news of elderly celebrities who are embroiled in legal battles over their care and finances. Such names as Tim Conway, Casey Kasem and Nichelle Nichols are all subjects of legal disputes with their families over such things as health care directives.

When a person becomes incapacitated and unable to make medical or financial decisions on his or her own, these decisions can fall to family members who may not agree on the best way to proceed. When this happens, a legal battle can ensue. Such a battle seldom benefits the person who is suffering from dementia.

A will should still be written down in the electronics age

Today, more and more of one's life is taken up by or expressed on digital devices in California. Television is available on any device and reading an actual hard copy book is becoming less common. People send e-mails and e-cards in lieu of actual cards or letters. In this age of electronics, there is still one document that is best if crafted on actual paper; that is a last will and testament.

Stephanie Clifford, also known as Stormy Daniels, disclosed in her recent memoir that she had filmed a last will and testament out of fear for her life following threats that she received against herself and her young daughter. The video document was thorough and detailed in the instructions for the dispensation of her estate and the care of her daughter. There is one significant problem -- the document may not hold up in court.

Solid preparation of wills can reduce contests

It is possible that few in California realize how much contention they create with their estate plans. Leaving behind wills that are poorly considered or do not clearly define the writers' intentions is a recipe for disputes and battles. This may be the opposite of the goals of one's estate plan. However, there are some steps one can take to reduce the possibility that the heirs of the estate will contest the contents of the will.

If someone waits until he or she is elderly and unwell, there is a greater chance that the heirs will protest that the will was not drafted while their loved one was of sound mind. Communication is the key to limiting the chances of a dispute. Sharing one's intentions early in the estate planning process may allow heirs to obtain clarification of any confusing or upsetting terms in the will. Waiting too long or keeping the will top secret - especially if it contains surprises - may be just enough of a shock to motivate legal action.

Probate explained

Estate planning in California can seem like a large, complicated process that is filled with unfamiliar terms. Words like power of attorney, wills, executors, trusts and probate can sound intimidating if one doesn't understand what they mean. Perhaps one of the less understood terms is probate.

Probate is the process by which a will is proven to be legitimate and valid. The steps needed and the process taken to make that determination depend to a large extent on the size and complexity of the estate of the deceased. Typically, a person, often a family member, will be named as executor of the deceased's will. If one is not familiar with the role or its responsibilities, one may have many questions.

An FLP's impact on reducing estate taxes

A wealthy family in California may be considering moves that can be taken to preserve family wealth from taxes with the advent of the new tax laws. There are mechanisms that can be used when reducing estate taxes. The current exemption of $11.18 million went into effect in 2018. This means that an estate valued at less than that is not subject to the federal estate tax.

One mechanism that wealthy families employ to reduce estate taxes is called a Family Limited Partnership, (FLP). An FLP allows a family to establish a partnership with family members and then gift to them shares in the partnership. For example, if someone invests in a real estate venture valued at $4 million and gives the FLP 90 percent of the value, it reduces the principal's share by 90 percent, with the principal retaining a 10 percent interest. This also allows wealth to be transferred to another generation without incurring estate tax expenses.

Trust preparation can facilitate estate planning

Estate planning is seldom a happy topic. It's not pleasant to contemplate ones' death in California, or any other state for that matter, and it's good to keep in mind that one can't foresee becoming incapacitated. Planning for such an eventuality can make life easier for family and loved ones, and trust preparation can clarify one's wishes for such an eventuality.

A trust enables a person to designate who will govern one's affairs and make decisions should the author of the trust become incapacitated and unable to do so. Life is unpredictable, but knowing that a person has provided for such eventualities as an accident or illness can bring peace of mind. A trust can also help ensure that a person's final wishes are carried out and can facilitate that process.

Estate planning review for a surviving spouse

The death of a spouse is perhaps one of the most difficult and trying times in a person's life in California. After the funeral, much of the focus may be on settling the late spouse's estate. While this is certainly very important and must be taken care of, an estate planning review on the part of the surviving spouse is also very important.

Documents that were drawn up previously may have designated each spouse as the other's beneficiary. This may be true of insurance policies, retirement accounts, bank accounts, and other accounts or assets. Powers of attorney may need to be revisited. Spouses will frequently name each other as powers of attorney in the event that one is unable to make financial or other decisions. The surviving spouse may also wish to review his or her existing will and trust documents to verify that final wishes will still be carried out as intended.

Power of attorney: What is it?

Estate planning is something that's been in the news in California a lot lately, especially with so many celebrities with sizable estates having recently passed away without having a will or trust in place. It may cause others to think they should establish a plan but the number of documents and the process itself can seem a little daunting. One term that is heard a lot but may not be understood is power of attorney.

A power of attorney document grants one person, sometimes identified as the attorney-in-fact, the authority to act on another's behalf. The person who grants the POA is sometimes identified as the principal. There are different types of POA documents.

Power of attorney should be carefully considered

Estate planning is not just for the rich and famous. However, the rich and famous are not immune to estate planning mistakes. From failing to have an estate plan to being exploited by the people to whom they granted power of attorney, they have taken missteps that others can learn from in California.

Granting a power of attorney is very important, but even more important may be the matter of to whom a power of attorney is given. People frequently choose family members, and while this often works out just fine, it can also lead to abuse in certain circumstances. One of the earliest and worst examples of this was the case of Brooke Astor. In her later years she suffered from Alzheimer's. She had granted power of attorney to her son and suffered financial abuse because of it.