Newman Law Group

Tustin Estate Planning Law Blog

Ease tension between heirs with discussion and formal planning

Though most people hope that they have a family that gets along without a hitch, that is not the case for a considerable number of families. In fact, siblings and other relatives can often find themselves at odds. As a result, some people may have concerns that their heirs will fight over their remaining estate.

Unfortunately, it is not unheard of for siblings and others to face conflict over an estate. Because most California residents do not want their children fighting after their passing, they may want to take the time to discuss their estate plans and wishes with their children. Though family discussions about eventual death and after-death matters can seem uncomfortable, it can be immensely useful in deterring family disputes later. When everyone knows what to expect, it may lessen the chances of tension.

Is a durable or springing power of attorney right for you?

In many cases, it is a good idea for California residents to have someone who can make decisions for them and act on their behalf when they are not available. Fortunately, power of attorney documents can help interested individuals appoint a trusted person to such a role. However, different types and powers exist, so it is wise to understand available options.

One power of attorney option is to make a durable POA. A durable document means that the agent gains legal authority immediately after the document is signed. Some people may not have a problem with such a fast-acting document, but others may feel uncomfortable with someone having that power when it is not strictly necessary. Luckily, other options exist that could be more appropriate.

Estate planning in a turbulent market

Having an estate plan is an excellent step toward establishing one's legacy in California. But like so many things in life, estate planning is meant to be an ongoing process. The plan should be reviewed and revised as needed every few years. The current fluctuations in the market can be viewed as a time to perhaps review one's plan.

While the market downturn can cause a person to have indigestion it can also present certain opportunities. One option a person may wish to consider regards converting a traditional IRA to a Roth IRA. This may be particularly true if one has a large IRA that is intended for one's children or grandchildren. Converting an IRA to a Roth IRA requires that the taxes be paid on the converted amount as if it were income for the tax year. With the value down the taxes due will be less and the proceeds from Roth IRA will not be taxable as the taxes have already been paid.

Careful planning yields successful distribution of estate assets

There's a line often repeated about a wealthy man who passes away. One friend asks the other friend "how much did he leave?" to which the response is "everything he had." No matter the vast wealth one possesses in California, it remains behind when a person dies. Realizing this fact and planning for how one's estate assets will be distributed after one's passing can be one of the best bequests a person leaves behind in California.

How a person structures an estate can have direct bearing on the resolution of the estate, both in terms of how long full resolution may take and the costs that may be incurred. Many people believe that having a current will is all that is needed. While a will may be a good starting point, there are other items to consider.

Well-planned estate administration can be a gift to loved ones

People make plans and set goals in order to achieve success in life. Plans and goals can also be established in order to effect a smooth transition that will simplify matters after death for the person's loved ones. Successful planning can reduce costs of estate administration in California, particularly if one does not have the appropriate estate plan documents in place.

A will can be an effective tool but one should make sure it is up to date and appropriately signed and witnessed. When a person passes away and leaves behind a will, the will must go through the probate process. This involves authenticating the will in probate court and securing formal appointment of the executor named in the will. During this period, creditors may make claims against the estate and potential heirs may also challenge the validity or contents of the will. While some people may be reluctant to consult a professional regarding writing a will out of concern over costs, failure to have a will could be even more costly to one's heirs -- in money and time.

Asset protection provides peace of mind

The new year is still young and many people are still working on resolutions to get more exercise, eat better and in general take better care of themselves in order to help ensure a long and healthy life. Yet no matter what people may do, unthinkable tragedies can still occur. A helicopter crash in California recently took the life of the basketball star Kobe Bryant, his 13-year-old daughter and the lives of seven others who were traveling with them. Kobe Bryant was only 41. In addition to working to protect one's health, one should also formulate an estate plan for asset protection that will in turn protect one's heirs.

In addition to resolving to take better care of oneself, one may also wish to consider taking steps to take care of loved ones in the event of an unthinkable tragedy. Some people may feel they don't have enough assets worth protecting, but nearly everyone has something they wish to pass on and without a will or estate plan in place that decision may be made by a court who is not familiar with a person's final wishes. Where a family is concerned, care of minor children in the event of a tragedy may be a major concern.

Outdated wills, missing documents could cause estate issues

Figuring out how individuals want their worldly affairs handled after their deaths can be daunting. For this reason, many people in California and across the country create their wills and think they are finished with the difficult process of estate planning. However, nearly everything in life is constantly changing, and an outdated estate plan could cause problems.

If it has been a while since looking at an existing estate plan, it is wise to dust off the documents and give them a review. Some people may find that they still have guardians named for their children who have long since grown and started families of their own since the plan was created. While this bit of outdated information may not cause much issue when the time comes to execute the will, other outdated information could set surviving loved ones up for delays and complications.

Probate and how to manage it

Estate planning is a term that most people are familiar with but there are aspects that people may not be familiar with in California. One of these is probate and how it can impact an estate one wishes to leave for loved ones. Probate is the process that a will must go through, via the courts, to establish that it is legitimate.

This process can take anywhere from a few months to a few years, but there are steps that can be taken to streamline matters or to even protect an estate from it altogether. Jointly owned assets can sometimes avoid becoming subject to this process. There are paid on death or transfer on death forms that can be filled out for brokerage and bank accounts respectively that may protect those accounts.

Protecting assets in light of the new SECURE act

The advent of a new year often means new tax laws that will have an impact on estate planning strategies. January of 2020 was no exception with the enactment of the Setting Every Community Up for Retirement Act, known as the SECURE Act of 2019. The act has implications for the disbursement of funds from certain retirement accounts and may impact plans for protecting assets in California.

Under the prior law, non-spousal beneficiaries of a 401(k) or IRA account could hold on to the account until the beneficiary reached the age when required minimum distributions (RMD) would begin. Under the old law, the RMD age was 70½, and the SECURE Act raises the age to 72. In addition to waiting until only age 70½, a recipient could stretch out disbursements over his or her lifetime under the old law.

Your estate plan needs a power of attorney -- here's why

Most people in California know that estate planning is useful for leaving inheritances for heirs, but this is only a small part of a much larger picture. A well-rounded estate plan should also include a living will and power of attorney. These two documents allow an individual to address things like end-of-life issues, including preferences for medical care and who will make those decisions if necessary.

Making decisions about medical care and treatment is usually very personal, and people want to be sure that their wishes and preferences are being respected. If a person is suffering from a severe injury, in a coma or otherwise unable to make those decisions, his or her living will should provide a blueprint for care. Living wills cannot address every possible medical situation, but they frequently address life-prolonging care, pain management and do-not-resuscitate directives.